PRODUCT SUPPLEMENT NO. 50-I                REGISTRATION STATEMENT NO. 333-134553
To prospectus dated May 30, 2006 and                     DATED DECEMBER 15, 2006
prospectus supplement dated May 30, 2006                          RULE 424(b)(2)

LEHMAN BROTHERS HOLDINGS INC.

PRINCIPAL PROTECTED NOTES LINKED TO AN INDEX

GENERAL

o   Lehman Brothers Holdings Inc. may offer and sell principal protected notes
    linked to an index from time to time. This product supplement no. 50-I
    describes terms that will apply generally to the principal protected notes,
    and supplements the terms described in the accompanying base prospectus and
    MTN prospectus supplement. A separate underlying supplement and term sheet
    or pricing supplement, as the case may be, will describe the index and the
    terms that apply specifically to the notes, including any changes to the
    terms specified below. We refer to the term sheets and pricing supplements
    generally as terms supplements. If the terms described in the relevant terms
    supplement are inconsistent with those described herein or in the
    accompanying base prospectus and MTN prospectus supplement, the terms
    described in the relevant terms supplement shall control.

o   The notes are the senior unsecured obligations of Lehman Brothers Holdings
    Inc.

o   Payment is linked to an index as described below.

o   Investing in the notes is not equivalent to investing in the index to which
    the notes are linked or any of its stocks or futures contracts or
    commodities, as applicable, underlying the index.

o   Unless otherwise specified in the relevant terms supplement, full principal
    protection if the notes are held to maturity.

o   Unless otherwise specified in the relevant terms supplement, cash payment at
    maturity of the principal amount plus the Additional Amount, which amount
    may be zero unless a Minimum Return applies.

o   The Additional Amount will depend on the Index Return and the specific terms
    of the notes as set forth in the relevant terms supplement. Unless otherwise
    specified, the Additional Amount per $1,000 principal amount note will
    equal:

          -   $1,000 x the Index Return x the Upside Participation Rate, but
              will not be less than zero (or the Minimum Return, if applicable)
              or greater than the Maximum Return, if applicable, or

          -   an amount calculated according to the formula above, unless the
              Index closing level is above a specified level (which we refer to
              as the Knock-Out Level) on one of the trading days specified in
              the relevant terms supplement, in which case the Additional Amount
              will equal $1,000 x the Knock-Out Rate, or

          -   if the Ending Index Level is above or equal to the Initial Index
              Level, a fixed amount specified in the relevant terms supplement
              (which amount we refer to as the Fixed Payment); otherwise, zero
              (or the Minimum Return, if applicable).

o   In addition to a cash payment at maturity of the principal amount plus the
    Additional Amount, if any, the notes may pay interest prior to maturity, as
    specified in the relevant terms supplement.

o   For important information about tax consequences, see "Certain U.S. Federal
    Income Tax Consequences" beginning on page SS-18.

o   Minimum denominations of $1,000 and integral multiples thereof, unless
    otherwise specified in the relevant terms supplement.

o   The minimum initial investment will be specified in the relevant terms
    supplement.

o   The notes will not be listed on any securities exchange, unless otherwise
    specified in the relevant terms supplement.

KEY TERMS

Index:                    The index to which the notes are linked (the "Index"),
                          as specified in the relevant terms supplement.

Payment at Maturity:      Unless otherwise specified in the relevant terms
                          supplement, at maturity you will receive a cash
                          payment per $1,000 principal amount note of $1,000
                          plus the Additional Amount, which may be zero (or may
                          equal the Minimum Return, if applicable).

                                                        (continued on next page)

INVESTING IN THE PRINCIPAL PROTECTED NOTES LINKED TO THE INDEX INVOLVES A NUMBER
OF RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE SS-1 IN THIS PRODUCT SUPPLEMENT
NO. 50-I AND "RISK FACTORS" BEGINNING ON PAGE US-1 IN THE RELEVANT UNDERLYING
SUPPLEMENT.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the notes or passed upon the accuracy
or the adequacy of this product supplement no. 50-I, the accompanying base
prospectus, MTN prospectus supplement, the relevant underlying supplement, the
relevant terms supplement and any other related prospectus supplements. Any
representation to the contrary is a criminal offense.

                                 LEHMAN BROTHERS

December 15, 2006




KEY TERMS (CONTINUED)

Additional Amount         For notes with neither a Knock-Out Level nor a Fixed
(Notes with neither a     Payment, the Additional Amount per $1,000 principal
Knock-Out Level nor a     amount note paid at maturity will equal, unless
Fixed Payment):           otherwise specified in the relevant terms supplement,
                          $1,000 x the Index Return x the Upside Participation
                          Rate; provided that the Additional Amount will not be
                          less than zero (or the Minimum Return, if applicable)
                          or greater than the Maximum Return, if applicable.

Additional Amount (Notes  For notes with a Knock-Out Level, the Additional
with a Knock-Out Level):  Amount per $1,000 principal amount note paid at
                          maturity will equal, unless otherwise specified in the
                          relevant terms supplement:

                          (1)   If the Index closing level is below the
                                Knock-Out Level on each of the trading days
                                specified in the relevant terms supplement,
                                $1,000 x the Index Return x the Upside
                                Participation Rate; provided that the Additional
                                Amount will not be less than zero (or the
                                Minimum Return, if applicable) or greater than
                                the Maximum Return, if applicable; or

                          (2)   If the Index closing level is above or equal to
                                the Knock-Out Level on any of the trading days
                                specified in the relevant terms supplement
                                (which we refer to as a Knock-Out Event), $1,000
                                x the Knock-Out Rate.

Additional Amount (Notes  For notes with a Fixed Payment, the Additional Amount
with a Fixed Payment):    per $1,000 principal amount note paid at maturity will
                          equal, unless otherwise specified in the relevant
                          terms supplement:

                          (1)   If the Ending Index Level is above or equal to
                                the Initial Index Level, an amount specified in
                                the relevant terms supplement; or

                          (2)   If the Ending Index Level is below the Initial
                                Index Level, zero (or the Minimum Return, if
                                applicable).

Minimum Return:           If applicable, the Additional Amount will equal at
                          least the amount specified as the Minimum Return in
                          the relevant terms supplement.

Maximum Return:           If applicable, the Additional Amount will equal no
                          more than the amount specified as the Maximum Return
                          in the relevant terms supplement.

Other Terms:              In each case if applicable, the Upside Participation
                          Rate, Knock-Out Level, Knock-Out Rate, Fixed Payment,
                          Interest Rate, Partial Principal Protection
                          Percentage, Interest Period, Interest Determination
                          Dates and/or Interest Payment Date(s) will be set
                          forth in the relevant terms supplement.

Index Return:             Unless otherwise specified in the relevant terms
                          supplement:

                               Ending Index Level - Initial Index Level
                               ---------------------------------------
                                         Initial Index Level

Initial Index Level:      The Index closing level on the pricing date, or such
                          other date or dates as specified in the relevant terms
                          supplement.

Ending Index Level:       The Index closing level on the Observation Date, or
                          the arithmetic average of the Index closing levels on
                          each of the Averaging Dates, or such other date or
                          dates as specified in the relevant terms supplement.

Index Valuation Date(s):  The Index closing level will be calculated on a single
                          date, which we refer to as the Observation Date, or on
                          several dates, each of which we refer to as an
                          Averaging Date, as specified in the relevant terms
                          supplement. We refer to such dates generally as Index
                          Valuation Dates in this product supplement. Any Index
                          Valuation Date is subject to postponement in the event
                          of certain market disruption events and as described
                          under "Description of Notes - Payment at Maturity."

Knock-Out Event:          For notes with a Knock-Out Level, the relevant terms
                          supplement may specify any trading day(s) during the
                          term of the notes as the day(s) on which a Knock-Out
                          Event can occur.

Maturity Date:            As specified in the relevant terms supplement. The
                          maturity date of the notes is subject to postponement
                          in the event of certain market disruption events and
                          as described under "Description of Notes - Payment at
                          Maturity."




                                TABLE OF CONTENTS

                                PRODUCT SUPPLEMENT

                                                                            PAGE
                                                                            ----

Risk Factors................................................................SS-1
Use of Proceeds.............................................................SS-9
Description of Notes.......................................................SS-10
Certain U.S. Federal Income Tax Consequences...............................SS-19
Underwriting...............................................................SS-24
Benefit Plan Investor Considerations.......................................SS-28

                            MTN PROSPECTUS SUPPLEMENT

Risk Factors.................................................................S-4
Description of the Notes....................................................S-13
Supplemental United States Federal Income Tax Consequences..................S-37
Certain ERISA Considerations................................................S-44
Plan of Distribution........................................................S-45
Appendix A..................................................................S-48

                                 BASE PROSPECTUS

Prospectus Summary.............................................................1
General Information............................................................6
Cautionary Statement Regarding Forward-Looking Statements......................6
Use of Proceeds................................................................7
Ratios of Earnings to Fixed Charges and of Earnings to Combined
      Fixed Charges and Preferred Stock Dividends..............................7
Description of Debt Securities.................................................8
Description of Warrants.......................................................19
Description of Purchase Contracts.............................................23
Description of Preferred Stock................................................27
Description of Depositary Shares..............................................30
Description of Common Stock...................................................32
Description of Units..........................................................34
Form, Exchange and Transfer...................................................37
Book-Entry Procedures and Settlement..........................................38
United States Federal Income Tax Consequences.................................40
Plan of Distribution..........................................................54
Certain ERISA Considerations..................................................58
Where You Can Find More Information...........................................58
Legal Matters.................................................................59
Experts.......................................................................59

      In making your investment decision, you should rely only on the
information contained or incorporated by reference in the relevant terms
supplements and the relevant underlying supplement, this product supplement no.
50-I and the accompanying base prospectus and MTN prospectus supplement with
respect to the notes offered and with respect to Lehman Brothers Holdings Inc.
The relevant terms supplements and the relevant underlying supplement, this
product supplement no. 50-I and the accompanying base prospectus and MTN
prospectus supplement contain the terms of the notes and supersede all prior or
contemporaneous oral statements as well as any other written materials including
preliminary pricing terms, correspondence, trade ideas, structures for
implementation, sample structures, fact sheets, brochures or other educational
materials of ours. We have not authorized anyone to give you


                                      SS-i



any additional or different information. The information in the relevant terms
supplements and the relevant underlying supplement, this product supplement no.
50-I and the accompanying base prospectus and MTN prospectus supplement may only
be accurate as of the dates of each of these documents, respectively.

      The notes described in the relevant terms supplements, the relevant
underlying supplement and this product supplement no. 50-I are not appropriate
for all investors, and involve important legal and tax consequences and
investment risks, which should be discussed with your professional advisers. You
should be aware that the regulations of the National Association of Securities
Dealers, Inc. and the laws of certain jurisdictions (including regulations and
laws that require brokers to ensure that investments are suitable for their
customers) may limit the availability of the notes. The relevant terms
supplements, the relevant underlying supplement, this product supplement no.
50-I and the accompanying base prospectus and MTN prospectus supplement do not
constitute an offer to sell or a solicitation of an offer to buy the notes in
any circumstances in which such offer or solicitation is unlawful.

      In this product supplement no. 50-I, the relevant underlying supplement,
the relevant terms supplements and the accompanying base prospectus and MTN
prospectus supplement, "we," "us" and "our" refer to Lehman Brothers Holdings
Inc., unless the context requires otherwise.

      WE ARE OFFERING TO SELL, AND ARE SEEKING OFFERS TO BUY, THE NOTES ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. NEITHER THIS PRODUCT
SUPPLEMENT NO. 50-I NOR THE ACCOMPANYING BASE PROSPECTUS, MTN PROSPECTUS
SUPPLEMENT, UNDERLYING SUPPLEMENT OR TERMS SUPPLEMENT CONSTITUTES AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY NOTES BY ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PRODUCT SUPPLEMENT NO. 50-I NOR THE
ACCOMPANYING BASE PROSPECTUS, MTN PROSPECTUS SUPPLEMENT, UNDERLYING SUPPLEMENT
OR TERMS SUPPLEMENT NOR ANY SALE MADE HEREUNDER IMPLIES THAT THERE HAS BEEN NO
CHANGE IN OUR AFFAIRS OR THAT THE INFORMATION IN THIS PRODUCT SUPPLEMENT NO.
50-I AND ACCOMPANYING BASE PROSPECTUS, MTN PROSPECTUS SUPPLEMENT, UNDERLYING
SUPPLEMENT OR TERMS SUPPLEMENT IS CORRECT AS OF ANY DATE AFTER THE DATE HEREOF.

      YOU MUST (I) COMPLY WITH ALL APPLICABLE LAWS AND REGULATIONS IN FORCE IN
ANY JURISDICTION IN CONNECTION WITH THE POSSESSION OR DISTRIBUTION OF THIS
PRODUCT SUPPLEMENT NO. 50-I AND THE ACCOMPANYING BASE PROSPECTUS, MTN PROSPECTUS
SUPPLEMENT, UNDERLYING SUPPLEMENT OR TERMS SUPPLEMENT, AND THE PURCHASE, OFFER
OR SALE OF THE NOTES AND (II) OBTAIN ANY CONSENT, APPROVAL OR PERMISSION
REQUIRED TO BE OBTAINED BY YOU FOR THE PURCHASE, OFFER OR SALE BY YOU OF THE
NOTES UNDER THE LAWS AND REGULATIONS APPLICABLE TO YOU IN FORCE IN ANY
JURISDICTION TO WHICH YOU ARE SUBJECT OR IN WHICH YOU MAKE SUCH PURCHASES,
OFFERS OR SALES; NEITHER WE NOR THE AGENTS SHALL HAVE ANY RESPONSIBILITY
THEREFOR.


                                      SS-ii



                                  RISK FACTORS

      Your investment in the notes will involve certain risks. The notes may not
pay interest or guarantee any return of principal prior to maturity unless
otherwise specified in the relevant terms supplement. Investing in the notes is
not equivalent to investing directly in the Index or any of the stocks or
futures contracts or commodities, as applicable, underlying the Index. In
addition, your investment in the notes entails other risks not associated with
an investment in conventional debt securities. YOU SHOULD CONSIDER CAREFULLY THE
FOLLOWING DISCUSSION OF RISKS AS WELL AS THE OTHER INFORMATION CONTAINED IN THIS
PRODUCT SUPPLEMENT, THE ACCOMPANYING MTN PROSPECTUS SUPPLEMENT AND BASE
PROSPECTUS AND THE DOCUMENTS INCORPORATED IN THE BASE PROSPECTUS BY REFERENCE
BEFORE YOU DECIDE THAT AN INVESTMENT IN THE NOTES IS SUITABLE FOR YOU. IN
ADDITION, YOU SHOULD CONSIDER CAREFULLY THE DISCUSSION OF RISKS SET FORTH IN THE
RELEVANT UNDERLYING SUPPLEMENT BEFORE YOU DECIDE THAT AN INVESTMENT IN THE NOTES
LINKED TO THE INDEX IS SUITABLE FOR YOU. You should reach an investment decision
only after you have carefully considered with your advisors the suitability of
an investment in the notes in light of your particular circumstances.

THE NOTES DIFFER FROM CONVENTIONAL DEBT SECURITIES.

      The terms of the notes differ from those of conventional debt securities
in that we may not pay interest on the notes or, if we do pay interest, a
significant portion of your total payment at maturity may be based on the
performance of the Index rather than the interest rate we will pay you. Where
the relevant terms supplement does not provide for interest payments, if the
Ending Index Level is not above, or in certain cases, equal to, the Initial
Index Level, and if the Index closing level is below the Knock-Out Level, if
any, on each of the trading days specified in the relevant terms supplement, at
maturity you will receive only $1,000 (plus the Minimum Return, if any) for each
$1,000 principal amount note, unless otherwise specified in the relevant terms
supplement. Therefore, the return on your investment in the notes may be less
than the amount that would be paid on an ordinary debt security. The return at
maturity of only the $1,000 principal amount of each note (plus the Minimum
Return, if any) may not compensate you for any loss in value due to inflation
and other factors relating to the value of money over time.

THE NOTES MAY NOT PAY MORE THAN THE PRINCIPAL AMOUNT, AND ACCRUED AND UNPAID
INTEREST, IF APPLICABLE, AT MATURITY.

      If the Ending Index Level is below, or, in certain cases, equal to the
Initial Index Level, and the Index closing level is below the Knock-Out Level,
if any, on each of the trading days specified in the relevant terms supplement,
you will receive only the applicable interest payments, if any, set forth in the
terms supplement and, unless otherwise specified in the relevant terms
supplement, $1,000 (plus the Minimum Return, if any) for each $1,000 principal
amount note you hold at maturity. This will be true even if the level of the
Index was above the Initial Index Level at some time during the life of the
notes but later falls below or, in certain cases, equal to the Initial Index
Level. Because the notes may accrue interest at an interest rate lower than that
payable for other debt securities issued by us with a comparable maturity, the
return on your investment in the notes may be less than the amount that would be
paid on a conventional debt security issued by us with a comparable maturity.
This return may not compensate you for any loss in value due to inflation and
other factors relating to the value of money over time.

THE ENDING INDEX LEVEL MAY BE BELOW THE INDEX LEVEL AT OTHER TIMES DURING THE
TERM OF THE NOTES.

      Because the Ending Index Level is calculated based on the Index closing
level on one or more Index Valuation Dates during the term of the notes, the
level of the Index at various other times during the term of the notes could be
above the Ending Index Level. This difference could be particularly large if
there is a significant increase in the level of the Index before and/or after
the Index Valuation Date(s) or if there is a significant decrease in the level
of the Index around the time of the Index Valuation Date(s) or if there is
significant volatility in the Index level during the term of the notes
(especially on dates near the Index Valuation Date(s)). For example, when the
Index Valuation Date of the notes is near the end of the


                                      SS-1



term of the notes, then if the Index levels increase or remain relatively
constant during the initial term of the notes and then decrease below the
Initial Index Level, the Ending Index Level may be significantly lower than if
it were calculated on a date earlier than the Index Valuation Date. Under these
circumstances, you may receive a lower payment at maturity than you would have
received if you had invested in the Index, the stocks or futures contracts or
commodities, as applicable, underlying the Index or contracts relating to the
Index for which there is an active secondary market.

THE APPRECIATION POTENTIAL OF THE NOTES WILL BE LIMITED BY THE KNOCK-OUT LEVEL,
IF APPLICABLE.

      If the notes have a Knock-Out Level, the appreciation potential of the
notes is limited by the Knock-Out Level and the corresponding Knock-Out Rate.
For example, if the Knock-Out Level equals 125% of the Initial Index Level, the
appreciation potential of the notes is limited to 24.99%. Once the Index closing
level is equal to or above the Knock-Out Level, the appreciation potential of
the notes is limited to the Knock-Out Rate, which may be zero, even if the Index
Return is greater than the Knock-Out Rate. For notes with a Knock-Out Level, if
the Index closing level is above or equal to the Knock-Out Level on any trading
day specified in the relevant terms supplement, the return on the notes will
equal the Knock-Out Rate multiplied by the principal amount of the notes and
will not be determined by reference to the Index Return. This return may not
compensate you for any loss in value due to inflation and other factors relating
to the value of money over time. Therefore your return may be less than the
return you would have otherwise received if you had invested directly in the
Index, the stocks or futures contracts or commodities, as applicable, underlying
the Index or contracts relating to the Index for which there is an active
secondary market. Under these circumstances, your return will not reflect any
potential increase in the Ending Index Level, as compared to the Initial Index
Level, of greater than the Knock-Out Rate.

THE APPRECIATION POTENTIAL OF THE NOTES WILL BE LIMITED BY THE FIXED PAYMENT, IF
APPLICABLE.

      If the notes have a Fixed Payment, the appreciation potential of the notes
is limited to the appreciation represented by such Fixed Payment, even if the
appreciation in the Index would, but for the Fixed Payment, result in the
payment of a greater Additional Amount at maturity. If the Ending Index Level is
above or equal to the Initial Index Level, the return on the notes will equal
the Fixed Payment and will not be determined by reference to the Index Return.
This return will be limited regardless of the appreciation of the Index, which
may be significant. Therefore, under certain circumstances, your return may be
less than the return you would have otherwise received if you had invested
directly in the Index, the stocks or futures contracts or commodities, as
applicable, underlying the Index or contracts relating to the Index for which
there is an active secondary market.

THE APPRECIATION POTENTIAL OF THE NOTES WILL BE LIMITED BY THE MAXIMUM RETURN,
IF APPLICABLE.

      If the notes have a Maximum Return, the appreciation potential of the
notes is limited to the fixed dollar amount per $1,000 principal amount note
specified in the applicable terms supplement as the Maximum Return. The
Additional Amount will equal no more than the Maximum Return. Accordingly, the
appreciation potential of the notes will be limited to the Maximum Return even
if the Additional Amount calculated with reference to the Index Return and
Participation Rate would be greater than the Maximum Return. Therefore, under
certain circumstances, your return may be less than the return you would have
otherwise received if you had invested directly in the Index, the stocks or
futures contracts or commodities, as applicable, underlying the Index or
contracts relating to the Index for which there is an active secondary market.

IF THE UPSIDE PARTICIPATION RATE IS LESS THAN 100%, THE ADDITIONAL AMOUNT WILL
BE LIMITED BY THE UPSIDE PARTICIPATION RATE.

      If the Upside Participation Rate is less than 100% and the Ending Index
Level is above the Initial Index Level, the Additional Amount you receive at
maturity will equal only a percentage, as specified in the relevant terms
supplement, of the Index performance above the Initial Index Level. Under these
circumstances, the Additional Amount you receive at maturity will not fully
reflect the performance of the Index.


                                      SS-2



YOU SHOULD BE WILLING TO HOLD YOUR NOTES TO MATURITY.

      The notes are not designed to be short-term trading instruments. The price
at which you will be able to sell your notes prior to maturity, if at all, may
be at a substantial discount from the principal amount of the notes, even in
cases where the Index has appreciated since the pricing date. The potential
returns described in any terms supplement assume that your notes are held to
maturity.

OUR AFFILIATES' COMPENSATION MAY SERVE AS AN INCENTIVE TO SELL YOU THESE NOTES.

      We and our affiliates act in various capacities with respect to the notes.
Lehman Brothers Inc. and other of our affiliates may act as a principal, agent
or dealer in connection with the notes. Such affiliates, including the sales
representatives, may derive compensation from the distribution of the notes and
such compensation may serve as an incentive to sell these notes instead of other
investments.

THE INCLUSION IN THE ORIGINAL ISSUE PRICE OF EACH AGENT'S COMMISSION AND THE
COST OF HEDGING OUR OBLIGATIONS UNDER THE NOTES THROUGH ONE OR MORE OF OUR
AFFILIATES IS LIKELY TO ADVERSELY AFFECT THE VALUE OF THE NOTES PRIOR TO
MATURITY.

      While the payment at maturity will be based on the full principal amount
of your notes as described in the relevant terms supplement, the original issue
price of the notes includes each agent's commission and the cost of hedging our
obligations under the notes through one or more of our affiliates. Such cost
includes our affiliates' expected cost of providing such hedge, as well as the
profit our affiliates expect to realize in consideration for assuming the risks
inherent in providing such hedge. As a result, assuming no change in market
conditions or any other relevant factors, the price, if any, at which Lehman
Brothers Inc. will be willing to purchase notes from you in secondary market
transactions, if at all, will likely be lower than the original issue price. In
addition, any such prices may differ from values determined by pricing models
used by Lehman Brothers Inc., as a result of dealer discounts, mark-ups and
other transaction costs.

SECONDARY TRADING MAY BE LIMITED.

      Unless otherwise specified in the relevant terms supplement, the notes
will not be listed on a securities exchange. There may be little or no secondary
market for the notes. Even if there is a secondary market for the notes, it may
not provide enough liquidity to allow you to trade or sell the notes easily.

      Lehman Brothers Inc. may act as a market maker for the notes, but is not
required to do so. Because we do not expect that other market makers will
participate significantly in the secondary market for the notes, the price at
which you may be able to trade your notes is likely to depend on the price, if
any, at which Lehman Brothers Inc. is willing to buy the notes. If at any time
Lehman Brothers Inc. or another agent does not act as a market maker, it is
likely that there would be little or no secondary market for the notes.

PRIOR TO MATURITY, THE VALUE OF THE NOTES WILL BE INFLUENCED BY MANY
UNPREDICTABLE FACTORS.

      Many economic and market factors will influence the value of the notes. We
expect that, generally, the level of the Index on any day will affect the value
of the notes more than any other single factor. However, you should not expect
the value of the notes in the secondary market to vary in proportion to changes
in the level of the Index. The value of the notes will be affected by a number
of other factors that may either offset or magnify each other, including:

      o   the volatility or expected volatility in the Index;

      o   the time to maturity of the notes;


                                      SS-3



      o   in the case of notes linked to a stock index, the dividend rate on the
          stocks underlying the Index;

      o   in the case of notes linked to a commodity index, the market price of
          the physical commodities upon which the futures contracts underlying
          the Index are based ("Index Commodities") or the exchange-traded
          futures contracts on the Index Commodities;

      o   interest and yield rates in the market generally as well as, in the
          case of notes linked to a stock index, in the markets of the stocks
          underlying the Index;

      o   economic, financial, political, geographical, agricultural,
          meteorological, regulatory or judicial events that affect the stocks
          or futures contracts or commodities, as applicable, underlying the
          Index or markets generally and which may affect the Index closing
          level on any Index Valuation Date; and

      o   our creditworthiness, including actual or anticipated downgrades in
          our credit ratings.

      You cannot predict the future performance of the Index based on its
historical performance. The Ending Index Level may be equal to or below the
Initial Index Level, in which event you will only receive the principal amount
of your notes at maturity unless the relevant terms supplement provides for
interest payments, a Minimum Return or includes a Knock-Out feature.

MARKET DISRUPTIONS MAY ADVERSELY AFFECT YOUR RETURN.

      The calculation agent may, in its sole discretion, determine that the
markets have been affected in a manner that prevents it from properly valuing
the Index closing level on any trading day or the Index Return on any Index
Valuation Date and calculating the payment at maturity that we are required to
pay you. These events may include disruptions or suspensions of trading in the
markets as a whole. If the calculation agent, in its sole discretion, determines
that such an event has occurred, it is possible that one or more of the Index
Valuation Dates and the maturity date will be postponed and your return will be
adversely affected. See "Description of Notes-Market Disruption Events" in this
product supplement.

IF A MARKET DISRUPTION EVENT OCCURS ON A DAY THAT WOULD OTHERWISE BE AN
AVERAGING DATE, THERE WILL BE A DELAY IN SETTLEMENT OF THE NOTES.

      If a market disruption event occurs on a day that would otherwise be an
averaging date, settlement of the notes will be delayed, depending on the
circumstances surrounding the market disruption event, for a number of trading
days (up to a maximum delay of [eight multiplied by the number of averaging
dates as specified in the relevant terms supplement]) following the maturity
date.

IF THE TERM OF THE NOTES IS MORE THAN ONE YEAR, THE NOTES WILL BE CONTINGENT
PAYMENT DEBT INSTRUMENTS FOR U.S. FEDERAL INCOME TAX PURPOSES.

      For United States federal income tax purposes, if the term of the notes is
more than one year, the notes will be classified as contingent payment debt
instruments. As a result, they will be considered to be issued with original
issue discount. You will be required to include in income the amount of original
issue discount in excess of the stated interest payments actually made to you,
if any, during your ownership of such notes, subject to some adjustments, based
on the "comparable yield" of the notes, which will generally be the rate at
which Lehman Brothers Holdings could issue a fixed rate debt instrument with
terms and conditions similar to the notes. Additionally, you will generally be
required to recognize ordinary income on the gain, if any, realized on a sale,
upon maturity, or other disposition of such notes. See "Certain U.S. Federal
Income Tax Consequences" in this product supplement.


                                      SS-4



IF THE TERM OF THE NOTES IS NOT MORE THAN ONE YEAR, THE NOTES WILL BE TREATED AS
SHORT-TERM DEBT INSTRUMENTS FOR U.S. FEDERAL INCOME TAX PURPOSES.

      If the term of the notes is not more than one year (including the last
possible date that the notes could be outstanding), the notes will be treated as
"short-term" debt instruments for U.S. federal income tax purposes. No
statutory, judicial or administrative authority directly addresses the treatment
of notes or instruments similar to the notes for U.S. federal income tax
purposes, and no ruling is being requested from the Internal Revenue Service
with respect to the notes. As a result, certain aspects of the tax treatment of
an investment in the notes are uncertain. You are urged to review carefully the
section entitled "Certain U.S. Federal Income Tax Consequences" in this product
supplement and consult your tax adviser regarding your particular circumstances.

LEHMAN BROTHERS HOLDINGS INC. EMPLOYEES HOLDING THE NOTES MUST COMPLY WITH
POLICIES THAT LIMIT THEIR ABILITY TO TRADE THE NOTES AND MAY AFFECT THE VALUE OF
THEIR NOTES.

      If you are an employee of Lehman Brothers Holdings Inc. or one of its
affiliates, you may only acquire the notes in compliance with all of our
internal policies and procedures. Because these policies and procedures limit
the dates and times that you may transact in the notes, you may not be able to
purchase any notes described in the relevant terms supplement from us and your
ability to trade or sell any such notes in the secondary market may be limited.

IN THE CASE OF NOTES LINKED TO A STOCK INDEX:

YOUR RETURN ON THE NOTES WILL NOT REFLECT DIVIDENDS ON THE COMMON STOCKS OR
OTHER EQUITY SECURITIES OF THE COMPANIES INCLUDED IN THE INDEX.

      Your return on the notes will not reflect the return you would realize if
you actually owned the stocks of the companies included in the Index and
received the dividends paid on those stocks. This is because the calculation
agent will calculate the amount payable to you at maturity of the notes by
reference to the Ending Index Level. The Ending Index Level reflects the prices
of the stocks as calculated in the Index without taking into consideration the
value of dividends paid on those stocks.

CERTAIN OF OUR, OR OUR AFFILIATES', ACTIVITIES MAY ADVERSELY AFFECT THE VALUE OF
YOUR NOTES.

      Lehman Brothers Inc. and other affiliates of ours trade the stocks
underlying the Index and other financial instruments related to the Index and
its component stocks on a regular basis, for their accounts and for other
accounts under their management. Lehman Brothers Inc. and these affiliates may
also issue or underwrite or assist unaffiliated entities in the issuance or
underwriting of other securities or financial instruments linked to the Index.
To the extent that we or one of our affiliates serves as issuer, agent or
underwriter for such securities or financial instruments, our or their interests
with respect to such products may be adverse to those of the holders of the
notes. Any of these trading activities could potentially affect the level of the
Index and, accordingly, could affect the value of the notes and the amount, if
any, payable to you at maturity.

      In addition, we or one of our affiliates may serve as issuer, agent or
underwriter for additional issuances of notes with returns linked or related to
changes in the level of the Index or the stocks that compose the Index. By
introducing competing products into the marketplace in this manner, we or one or
more of our affiliates could adversely affect the value of the notes.

      On or prior to the date of the relevant terms supplement, we, through our
affiliates or others, may hedge some or all of our anticipated exposure in
connection with the notes by taking positions in the Index or the stocks
underlying the Index, or instruments whose value is derived from the Index or
its underlying stocks. While we cannot predict an outcome, such hedging activity
or other hedging or investment activity of ours could potentially increase the
level of the Index as well as the Initial Index Level, and, therefore,
effectively establish a higher level that the Index must achieve for you to
obtain a


                                      SS-5



return on your investment or avoid a loss of principal at maturity. From time to
time, prior to maturity of the notes, we may pursue a dynamic hedging strategy
which may involve taking long or short positions in the Index or the stocks
underlying the Index, or instruments whose value is derived from the Index or
its underlying stocks. We cannot assure you that any of these activities will
not have a material impact on the level of the Index or the value of the notes.

AN AFFILIATE OF OURS MAY ACT AS A CALCULATION AGENT ON THE NOTES, CREATING A
POTENTIAL CONFLICT OF INTEREST BETWEEN YOU AND US.

      Lehman Brothers Inc., one of our affiliates, will act as the calculation
agent. The calculation agent will determine, among other things, the Initial
Index Level, the Ending Index Level, the Index Return and the amount that we
will pay you at maturity. The calculation agent will also be responsible for
determining whether a market disruption event has occurred, whether the Index
has been discontinued and whether there has been a material change in the method
of calculation of the Index. In performing these duties, Lehman Brothers Inc.
may have interests adverse to the interests of the holders of the notes, which
may affect your return on the notes, particularly where Lehman Brothers Inc., as
the calculation agent, is entitled to exercise discretion.

IN THE CASE OF NOTES LINKED TO A COMMODITY INDEX:

SUSPENSION OR DISRUPTIONS OF MARKET TRADING IN THE COMMODITY AND RELATED FUTURES
MARKETS MAY ADVERSELY AFFECT THE VALUE OF YOUR NOTES.

      The commodity markets are subject to temporary distortions or other
disruptions due to various factors, including the lack of liquidity in the
markets, the participation of speculators and government regulation and
intervention. In addition, U.S. futures exchanges and some foreign exchanges
have regulations that limit the amount of fluctuation in futures contract prices
that may occur during a single business day. These limits are generally referred
to as "daily price fluctuation limits" and the maximum or minimum price of a
contract on any given day as a result of these limits is referred to as a "limit
price." Once the limit price has been reached in a particular contract, no
trades may be made at a different price. Limit prices have the effect of
precluding trading in a particular contract or forcing the liquidation of
contracts at disadvantageous times or prices. These circumstances could
adversely affect the level of the Index and, therefore, the value of your notes.

COMMODITY PRICES MAY CHANGE UNPREDICTABLY, AFFECTING THE INDEX LEVEL AND THE
VALUE OF YOUR NOTES IN UNFORESEEABLE WAYS.

      Trading in futures contracts associated with the Index Commodities (as
defined above under "-Prior to maturity, the value of the notes will be
influenced by many unpredictable factors") is speculative and can be extremely
volatile. Market prices of the Index Commodities may fluctuate rapidly based on
numerous factors, including: changes in supply and demand relationships;
weather; agriculture; trade; fiscal, monetary and exchange control programs;
domestic and foreign political and economic events and policies; disease;
technological developments; changes in interest rates and growth rates in the
global economy; and trading activities in commodities and related futures
contracts. These factors may affect the level of the Index and the value of your
notes in varying ways, and different factors may cause the value of different
commodities included in the Index, and the volatilities of their prices, to move
in inconsistent directions at inconsistent rates.

HIGHER FUTURE PRICES OF THE COMMODITY FUTURES CONTRACTS CONSTITUTING THE INDEX
RELATIVE TO THEIR CURRENT PRICES MAY DECREASE THE AMOUNT PAYABLE AT MATURITY.

      The Index is composed of futures contracts on physical commodities. Unlike
equities, which typically entitle the holder to a continuing stake in a
corporation, commodity futures contracts normally specify a certain date for
delivery of the underlying physical commodity. As the futures contracts
underlying the Index approach expiration, they are replaced by contracts that
have a later expiration.


                                      SS-6



Thus, for example, a contract purchased and held in August may specify an
October expiration. As time passes, the contract expiring in October is replaced
by a contract for delivery in November. This process is referred to as
"rolling." If the market for these contracts is (putting aside other
considerations) in "backwardation," where the prices are lower in the distant
delivery months than in the nearer delivery months, the sale of the October
contract would take place at a price that is higher than the price of the
November contract, thereby creating a "roll yield." While many of the contracts
underlying the Index have historically exhibited consistent periods of
backwardation, backwardation will most likely not exist at all times. Moreover,
certain Index Commodities, such as gold, have historically traded in "contango"
markets. Contango markets are those in which the prices of contracts are higher
in the distant delivery months than in the nearer delivery months. The absence
of backwardation in the commodity markets could result in negative "roll
yields," which could adversely affect the value of the Index.

YOU WILL NOT HAVE RIGHTS IN THE FUTURES CONTRACTS ON THE INDEX.

      You will not have any rights that holders of the futures contracts
underlying the Index may have.

CERTAIN OF OUR, OR OUR AFFILIATES', ACTIVITIES MAY ADVERSELY AFFECT THE VALUE OF
YOUR NOTES.

      Lehman Brothers Commodity Services Inc. and other affiliates of ours trade
futures contracts and options on futures contracts related to the Index
Commodities on a regular basis, for their accounts and for other accounts under
their management. Lehman Brothers Commodity Services Inc. and other affiliates
of ours may also enter into or trade and market securities, swaps, options,
derivatives and related instruments that are linked to the performance of the
Index, the futures contracts underlying the Index or the Index Commodities. Any
of these trading activities could potentially affect the level of the Index and,
accordingly, could affect the value of the notes and the amount payable to you
at maturity.

      One or more of our affiliates may publish research reports or otherwise
express views about the Index or the Index Commodities. Any prospective
purchaser of notes should undertake an independent investigation of the Index,
the futures contracts underlying the Index and the Index Commodities as in its
judgment is appropriate to make an informed decision with respect to an
investment in the notes.

      In addition, we or one of our affiliates may serve as issuer, agent or
underwriter for additional issuances of notes with returns linked or related to
changes in the level of the Index, the futures contracts underlying the Index or
the commodities underlying the Index. By introducing competing products into the
marketplace in this manner, we or one or more of our affiliates could adversely
affect the value of the notes.

      On or prior to the date of the relevant terms supplement, we, through our
affiliates or others, may hedge some or all of our anticipated exposure in
connection with the notes by taking positions in the Index, futures contracts or
commodities underlying the Index, or instruments whose value is derived from the
Index or its underlying futures contracts or commodities. While we cannot
predict an outcome, such hedging activity could potentially increase the level
of the Index as well as the Initial Index Level, and, therefore, effectively
establish a higher level that the Index must achieve for you to receive at
maturity of the notes more than the applicable principal amount of your notes
(other than, if applicable, any interest payment or payment of the Minimum
Return). From time to time, prior to maturity of the notes, we may pursue a
dynamic hedging strategy which may involve taking long or short positions in the
Index, futures contracts or commodities underlying the Index, or instruments
whose value is derived from the Index or its underlying futures contracts or
commodities. We cannot assure you that any of these activities will not have a
material impact on the level of the Index or the value of the notes.

AN AFFILIATE OF OURS MAY ACT AS A CALCULATION AGENT ON THE NOTES, CREATING A
POTENTIAL CONFLICT OF INTEREST BETWEEN YOU AND US.

      Lehman Brothers Inc., one of our affiliates, will act as the calculation
agent. The calculation agent will determine, among other things, the Initial
Index Level, the Ending Index Level, the Index Return and


                                      SS-7



the Additional Amount, if any, that we will pay you at maturity as well as
whether the Index closing level is greater than or equal to the Knock-Out Level,
for notes with a Knock-Out feature, on any trading day during the term of the
notes as specified in the applicable terms supplement, whether the Ending Index
Level is equal to or greater than the Initial Index Level and, if the notes bear
interest, the amount of interest payable, if any, on any Interest Payment Date.
The calculation agent will also be responsible for determining whether a market
disruption event has occurred, whether the Index has been discontinued, whether
there has been a material change in the method of calculation of the Index and,
if the notes bear interest, whether a day is an Interest Payment Date. In
performing these duties, Lehman Brothers Inc. may have interests adverse to the
interests of the holders of the notes, which may affect your return on the
notes, particularly where Lehman Brothers Inc., as the calculation agent, is
entitled to exercise discretion.


                                      SS-8



                                 USE OF PROCEEDS

      Unless otherwise specified in the relevant terms supplement, the net
proceeds we receive from the sale of the notes will be used, in whole or in
part, by us or by one or more of our affiliates in connection with hedging our
obligations under the notes. The balance of the proceeds, if any, will be used
for general corporate purposes.

      On or prior to the date of the relevant terms supplement, we, through our
affiliates or others, may hedge some or all of our anticipated exposure in
connection with the notes by taking positions in the Index, the stocks or
futures contracts or commodities, as applicable, underlying the Index, or
instruments whose value is derived from the Index or the stocks or futures
contracts or commodities, as applicable, underlying the Index. While we cannot
predict an outcome, such hedging activity could potentially increase the level
of the Index as well as the Initial Index Level, and, therefore, effectively
establish a higher level that the Index must achieve for you to receive at
maturity of the notes more than the applicable principal amount of your notes
(other than, if applicable, any interest payment or payment of the Minimum
Return). From time to time, prior to maturity of the notes, we may pursue a
dynamic hedging strategy which may involve taking long or short positions in the
Index, the stocks or futures contracts or commodities, as applicable, underlying
the Index, or instruments whose value is derived from the Index or the stocks or
futures contracts or commodities, as applicable, underlying the Index. Although
we have no reason to believe that any of these activities will have a material
impact on the level of the Index or the value of the notes, we cannot assure you
that these activities will not have such an effect. See "Risk Factors-Certain
of our, or our affiliates', activities may adversely affect the value of your
notes."

      We have no obligation to engage in any manner of hedging activity and will
do so solely at our discretion and for our own account. No note holder shall
have any rights or interest in our hedging activity or any positions we may take
in connection with our hedging activity.


                                      SS-9



                              DESCRIPTION OF NOTES

      The following description of the terms of the notes supplements the
description of the general terms of the notes set forth under "Description of
the Notes" in the accompanying MTN prospectus supplement and "Description of
Debt Securities" in the accompanying base prospectus. A separate underlying
supplement and terms supplement will describe the index and the terms that apply
specifically to the notes, including any changes to the terms specified below.
Capitalized terms used but not defined in this product supplement no. 50-I have
the meanings assigned in the accompanying base prospectus, MTN prospectus
supplement, underlying supplement prospectus and the relevant terms supplement.
The term "note" refers to each $1,000 principal amount of our Principal
Protected Notes Linked to the Index.

GENERAL

      The Principal Protected Notes are senior unsecured obligations of Lehman
Brothers Holdings Inc. that are linked to the index specified in the relevant
terms supplement (the "Index"). The notes are a series of securities referred to
in the accompanying base prospectus and MTN prospectus supplement. The notes
will be issued by Lehman Brothers Holdings Inc. under an indenture dated
September 1, 1987, as amended or supplemented from time to time, between us and
Citibank, N.A., as trustee.

      Unless otherwise specified in the relevant terms supplement, the notes
will not pay interest or a fixed amount at, or prior to, maturity. Instead, at
maturity you will receive a payment in cash, the amount of which will vary
depending on the performance of the Index over the term of the notes, calculated
in accordance with the applicable formula as set out below. Unless otherwise
specified in the relevant terms supplement, we will pay you at maturity at least
the principal amount of $1,000 for each $1,000 principal amount note and, if
specified in the relevant terms supplement, accrued and unpaid interest and/or a
Minimum Return.

      The notes are our unsecured and unsubordinated obligations and will rank
pari passu with all of our other unsecured and unsubordinated obligations.

      The notes will be issued in denominations of $1,000 and integral multiples
thereof, unless otherwise specified in the relevant terms supplement. The
principal amount and issue price of each note is $1,000, unless otherwise
specified in the relevant terms supplement. The notes will be represented by one
or more permanent global notes registered in the name of DTC or its nominee, as
described under "Description of the Notes-Forms of Notes" in the MTN prospectus
supplement and "Description of Debt Securities-Information in the Prospectus
Supplement" in the base prospectus.

      The specific terms of the notes will be described in the relevant terms
supplement accompanying this product supplement no. 50-I and the relevant
underlying supplement. The terms described in those documents supplement those
described herein and in the accompanying base prospectus and MTN prospectus
supplement. If the terms described in the relevant terms supplement are
inconsistent with those described herein or in the accompanying base prospectus
or MTN prospectus supplement, the terms described in the relevant terms
supplement shall control.

PAYMENT AT MATURITY

      The maturity date for the notes will be set forth in the relevant terms
supplement and is subject to adjustment if such day is not a business day or if
the final Index Valuation Date is postponed as described below. We will specify,
in each case, if applicable, the Upside Participation Rate, Partial Principal
Protection Percentage, Minimum Return, Maximum Return, Knock-Out Level,
Knock-Out Rate, Knock-Out Event and Fixed Payment and the applicable terms of
any such payment terms in the relevant terms supplement.


                                      SS-10



      Your return on the notes will be linked to the performance of the Index
during the life of the notes, provided that if the notes have a Knock-Out Level,
your return on the notes will be linked to the performance of the Index if the
Index closing level is equal to or above the Knock-Out Level on each of the
trading days specified in the terms supplement.

      Unless otherwise specified in the relevant terms supplement, at maturity
you will receive a cash payment for each $1,000 principal amount note of $1,000
plus the Additional Amount as described below, which amount may be zero unless a
Minimum Return applies. Unless otherwise specified in the relevant terms
supplement, you will not receive less than $1,000 for each $1,000 principal
amount note if you hold the notes to maturity.

      For notes with neither a Knock-Out Level nor a Fixed Payment, the
"Additional Amount" per $1,000 principal amount note paid at maturity will
equal, unless otherwise specified in the relevant terms supplement, $1,000 x the
Index Return x the Upside Participation Rate; provided that the Additional
Amount will not be less than zero (or the Minimum Return, if applicable) or
greater than the Maximum Return, if applicable.

      The "Upside Participation Rate" will be a percentage, which may be more or
less than 100%, as specified in the relevant terms supplement.

      The "Partial Principal Protection Percentage" will be a percentage less
than 100% as specified in the relevant terms supplement.

      The "Minimum Return" will be a fixed dollar amount per $1,000 principal
amount note as specified in the relevant terms supplement.

      The "Maximum Return" will be a fixed dollar amount per $1,000 principal
amount note as specified in the relevant terms supplement.

      For notes with a Knock-Out Level, the "Additional Amount" per $1,000
principal amount note paid at maturity will equal, unless otherwise specified in
the relevant terms supplement:

      (1)   if the Index closing level is below the Knock-Out Level on each of
            the trading days specified in the relevant terms supplement, $1,000
            x the Index Return x the Upside Participation Rate; provided that
            the Additional Amount will not be less than zero (or the Minimum
            Return, if applicable) or greater than the Maximum Return, if
            applicable; or

      (2)   if the Index closing level is above or equal to the Knock-Out Level
            on any of the trading days specified in the relevant terms
            supplement, $1,000 x the Knock-Out Rate.

      The "Knock-Out Level" will be a percentage of the Initial Index Level or a
fixed level of the Index as specified in the relevant terms supplement.

      The "Knock-Out Rate" will be a percentage as specified in the relevant
terms supplement.

      A "Knock-Out Event" occurs when the Index closing level is above or equal
to the Knock-Out Level on any of the trading days specified in the relevant
terms supplement. For example, the terms supplement may specify a single trading
day as the only day on which a Knock-Out Event can occur, or the terms
supplement may specify that a Knock-Out Event can occur on any trading day
during the term of the notes.

      For notes with a Fixed Payment, the "Additional Amount" per $1,000
principal amount note paid at maturity will equal, unless otherwise specified in
the relevant terms supplement:

      (1)   if the Ending Index Level is above or equal to the Initial Index
            Level, the Fixed Payment; or


                                      SS-11



      (2)   if the Ending Index Level is below the Initial Index Level, zero (or
            the Minimum Return, if applicable).

      The "Fixed Payment" is a fixed dollar amount per $1,000 principal amount
note as specified in the relevant terms supplement.

      Unless otherwise specified in the relevant terms supplement, the "Index
Return," as calculated by the calculation agent, is the percentage change in the
closing level of the Index calculated by comparing the Index closing level on
the Observation Date, or the arithmetic average of the Index closing level on
each of the Averaging Dates, or such other date or dates as specified in the
applicable terms supplement (the "Ending Index Level"), to the Index closing
level on the pricing date, or such other date or dates as specified in the
applicable terms supplement (the "Initial Index Level"). The relevant terms
supplement will specify the Initial Index Level and the manner in which the
Ending Index Level is determined. The Index Return, unless otherwise specified
in the relevant terms supplement, is calculated as follows:

                            Ending Index Level - Initial Index Level
             Index Return = ----------------------------------------
                                      Initial Index Level

      The "Index closing level" on any trading day will equal the closing level
of the Index or any successor index (as defined in the relevant terms
supplement) or alternative calculation of the Index described in the relevant
terms supplement at the regular official weekday close of the principal trading
session of the relevant exchange or market for the Index or the successor index.

      A "trading day" is, unless otherwise specified in the relevant terms
supplement:

      o   in the case of notes linked to a stock index, a day, as determined by
          the calculation agent, on which trading is generally conducted on (i)
          the relevant exchanges (as defined under "Description of Notes-Market
          Disruption Events-Stock Index") for securities underlying the Index
          and (ii) the exchanges on which futures or options contracts related
          to the Index are traded, other than a day on which trading on such
          relevant exchange or exchange on which such securities, futures or
          options contracts are traded is scheduled to close prior to its
          scheduled weekday closing time; or

      o   in the case of notes linked to a commodity index, a day, as determined
          by the calculation agent, on which (i) the Index or any successor
          index is calculated and (ii) futures contracts constituting more than
          80% of the value of the Index on such day are capable of being traded
          on their relevant exchanges (as defined under "Description of
          Notes-Market Disruption Events-Commodity Index") during the one-half
          hour before the determination of the closing level of the Index.

      The Index Valuation Date(s), which will be either a single date, which we
refer to as the Observation Date, or several dates, each of which we refer to as
an Averaging Date, will be specified in the relevant terms supplement and any
such date is subject to adjustment as described below.

      In the case of notes linked to a stock index, if an Index Valuation Date
is not a trading day or if there is a market disruption event on such day, the
applicable Index Valuation Date will be postponed to the immediately succeeding
trading day during which no market disruption event shall have occurred or is
continuing; provided that the Index closing level for an Index Valuation Date
will not be determined on a date later than the eighth scheduled trading day
after the final Index Valuation Date, and if such day is not a trading day, or
if there is a market disruption event on such date, the calculation agent will
determine the Index closing level for the Index Valuation Date on such date in
accordance with the formula for and method of calculating the Index closing
level last in effect prior to commencement of the market disruption event (or
prior to the non-trading day), using the closing price (or, if trading in the
relevant securities has been materially suspended or materially limited, the
calculation agent's good faith estimate of the closing price that would have
prevailed but for such suspension or limitation or non-trading day) on such
eighth


                                      SS-12



scheduled trading day of each security most recently constituting the Index. See
"Notes with a maturity of more than one year" and "Notes with a maturity of not
more than one year."

      In the case of notes linked to a commodity index, if an Index Valuation
Date is not a trading day or if there is a market disruption event on such day
with respect to a futures contract underlying such commodity Index, the
calculation agent will calculate the Index closing level with respect to such
Index Valuation Date in accordance with the formula for and method of
calculating the Index closing level last in effect prior to commencement of the
market disruption event or prior to the non-trading day using:

   o  with respect to each futures contract underlying such commodity Index for
      which such day is a trading day and for which a market disruption event
      has not occurred, the settlement price of such futures contract on the
      applicable relevant exchange on the scheduled Index Valuation Date; and

   o  with respect to each futures contract underlying such commodity Index for
      which such day is not a trading day or for which a market disruption event
      has occurred, the settlement price of such futures contract on the next
      trading day for such futures contract on which there is not a market
      disruption event; provided, however, if a market disruption event with
      respect to such futures contract occurs on each of the eight trading days
      following the originally scheduled Index Valuation Date, then the
      calculation agent shall determine the settlement price for such futures
      contract by requesting four leading dealers in the underlying market for
      such futures contract (selected in the sole discretion of the calculation
      agent) to provide price quotations for the price for such futures
      contract. If at least two quotations are provided, the price for the
      futures contract will be the arithmetic mean of such quotations. If only
      one dealer provides a price quotation, then the calculation agent, in its
      sole discretion, will determine whether it is reasonable to use that
      quotation. If the calculation agent determines that it is not reasonable
      to use such single price quotation, or if no price quotation is provided,
      the calculation agent shall determine the settlement price for such
      futures contract in its sole discretion taking into account the latest
      available quotation for the settlement price of such futures contract and
      any other information that it in good faith deems relevant.

      The maturity date will be specified in the relevant terms supplement. If
the scheduled maturity date (as specified in the relevant terms supplement) is
not a business day, then any payment required to be made on the maturity date
will instead be made on the next succeeding business day following such
scheduled maturity date. If, due to a non-trading day or a market disruption
event or otherwise, the final Index Valuation Date is postponed so that it falls
less than three business days prior to the scheduled maturity date, the maturity
date will be the third business day following the final Index Valuation Date, as
postponed, unless otherwise specified in the relevant terms supplement. We
describe market disruption events under "Description of Notes-Market Disruption
Events."

NOTES WITH A MATURITY OF MORE THAN ONE YEAR

      If an Index Valuation Date is not a trading day or if there is a market
disruption event on such day, the applicable Index Valuation Date will be
postponed to the immediately succeeding trading day during which no market
disruption event shall have occurred or is continuing; provided that the Index
closing level will not be determined on a date later than the eighth scheduled
trading day after the final Index Valuation Date, and if such day is not a
trading day, or if there is a market disruption event on such date, the
calculation agent will determine the Index closing level on such date in
accordance with the formula for and method of calculating the Index closing
level last in effect prior to commencement of the market disruption event (or
prior to the non-trading day), using the closing price (or, if trading in the
relevant securities has been materially suspended or materially limited, the
calculation agent's good faith estimate of the closing price that would have
prevailed but for such suspension or limitation or non-trading day) on such
eighth scheduled trading day of each security most recently constituting the
Index.


                                      SS-13



NOTES WITH A MATURITY OF NOT MORE THAN ONE YEAR

      If a market disruption event occurs on any Index Valuation Date other than
the final Index Valuation Date, or such date is not a trading day, the Index
closing level will be determined on the immediately succeeding trading day on
which no market disruption event shall have occurred or is continuing. The final
Index Valuation Date will be the third scheduled trading day prior to the
maturity date, unless the calculation agent determines that a market disruption
event occurred or is continuing on that day. In that event, the final Index
Valuation Date will be the first succeeding trading day on which the calculation
agent determines that a market disruption event has not occurred and is not
continuing. In no event, however, shall the final Index Valuation Date be
postponed more than eight business days, provided that such final Index
Valuation Date, as postponed, shall not produce a maturity date (including the
issue date but not the maturity date) more than one year after the issue date
(any such date, the "Final Disrupted Valuation Date"). If the final Index
Valuation Date has been postponed to the Final Disrupted Valuation Date, and
such Final Disrupted Valuation Date is not a trading day, or if there is a
market disruption event on such Final Disrupted Valuation Date, the calculation
agent will determine the Index closing level on such Final Disrupted Valuation
Date in accordance with the formula for and method of calculating the Index last
in effect prior to commencement of the market disruption event, using the
closing price (or, if trading in the relevant securities has been materially
suspended or materially limited, its good faith estimate of the closing price
that would have prevailed but for such suspension or limitation or non-trading
day) on the business day immediately preceding such Final Disrupted Valuation
Date of each security most recently constituting the Index.

INTEREST PAYMENTS

      If the relevant terms supplement specifies that the notes will bear
interest, the notes will bear interest at the rate per annum, or such other rate
or rates, as specified in such terms supplement. Under these circumstances,
interest will accrue from the issuance date of the notes to but excluding the
maturity date. Interest will be paid in arrears on each date specified in the
relevant terms supplement (each such date an "Interest Payment Date") to and
excluding the maturity date, to the holders of record at the close of business
on the date 15 calendar days prior to that Interest Payment Date, whether or not
such fifteenth calendar day is a business day, unless otherwise specified in the
relevant terms supplement. Interest on the notes will be calculated based on a
360-day year of twelve 30-day months, unless otherwise specified in the relevant
terms supplement.

      If any day on which a payment of interest or principal is due is not a
business day, the payment will be made with the same force and effect on the
next succeeding business day, but no additional interest will accrue as a result
of the delayed payment, and the next interest payment period will commence as if
the payment had not been delayed. If the maturity date is adjusted as the result
of a market disruption event, the payment of interest due on the maturity date
will be made on the maturity date as adjusted, with the same force and effect as
if the maturity date had not been adjusted, but no additional interest will
accrue or be payable as a result of the delayed payment.


OTHER PAYMENT TERMS

      We will irrevocably deposit with The Depository Trust Company ("DTC") no
later than the opening of business on the applicable date or dates funds
sufficient to make payments of the amount payable at maturity and on the
Interest Payment Dates, if any, with respect to the notes on such date. We will
give DTC irrevocable instructions and authority to pay such amount to the
holders of the notes entitled thereto.

      A "business day" is, unless otherwise specified in the relevant terms
supplement, any day that is not a Saturday or Sunday and that is not a day on
which banking institutions in The City of New York are authorized or obligated
by law to close.


                                      SS-14



      Subject to the foregoing and to applicable law (including, without
limitation, United States federal laws), we or our affiliates may, at any time
and from time to time, purchase outstanding notes by tender, in open market or
by private agreement.

CALCULATION AGENT

      Lehman Brothers Inc. will act as the calculation agent. The calculation
agent will determine, among other things, the Initial Index Level, the Ending
Index Level, the Index Return, and the Additional Amount, if any, that we will
pay you at maturity as well as whether the Index closing level is greater than
or equal to the Knock-Out Level, for notes with a Knock-Out feature, on any
trading day during the term of the notes as specified in the applicable terms
supplement, whether the Ending Index Level is equal to or greater than the
Initial Index Level and, if the notes bear interest, the amount of interest
payable, if any, on any Interest Payment Date. In addition, the calculation
agent will determine whether there has been a market disruption event or a
discontinuation of the Index, whether there has been a material change in the
method of calculation of the Index and, if the notes bear interest, whether a
day is an Interest Payment Date. All determinations made by the calculation
agent will be at the sole discretion of the calculation agent and will, in the
absence of manifest error, be conclusive for all purposes and binding on you and
on us. We may appoint a different calculation agent from time to time after the
date of the relevant terms supplement without your consent and without notifying
you.

      The calculation agent will provide written notice to the trustee at its
New York office, on which notice the trustee may conclusively rely, of the
amount to be paid at maturity and each Interest Payment Date, if applicable, on
or prior to 11:00 a.m. on the business day preceding the maturity date and each
Interest Payment Date, if applicable.

      All calculations with respect to the Initial Index Level, the Ending Index
Level, the Index Return or any Index closing level will be rounded to the
nearest one hundred-thousandth, with five one-millionths rounded upward (e.g.,
.876545 would be rounded to .87655); all dollar amounts related to determination
of the Additional Amount payable at maturity, if any, per $1,000 principal
amount note will be rounded to the nearest ten-thousandth, with five one
hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655);
and all dollar amounts paid on the aggregate principal amount of notes per
holder will be rounded to the nearest cent, with one-half cent rounded upward.

MARKET DISRUPTION EVENTS

      Certain events may prevent the calculation agent from calculating the
Index closing level on any Index Valuation Date and consequently the Index
Return and the Additional Amount, if any, that we will pay you at maturity.
These events may include disruptions or suspensions of trading on the markets as
a whole. We refer to these events individually as a "market disruption event."

      STOCK INDEX

      With respect to notes linked to a stock Index, a "market disruption
event," unless otherwise specified in the relevant terms supplement, means:

      o   a suspension, absence or material limitation of trading of stocks then
          constituting 20% or more of the level of the Index (or the relevant
          successor index) on the relevant exchanges (as defined below) for such
          securities at any time during the one hour period preceding the close
          of the principal trading session on such relevant exchange;

      o   a breakdown or failure in the price and trade reporting systems of any
          relevant exchange as a result of which the reported trading prices for
          stocks then constituting 20% or more of the level of the Index (or the
          relevant successor index) at any time during the one hour period
          preceding the close of the principal trading session on such relevant
          exchange are materially inaccurate;


                                      SS-15



      o   a suspension, absence or material limitation of trading on any major
          securities exchange for trading in futures or options contracts or
          exchange traded funds related to the Index (or the relevant successor
          index) at any time during the one hour period preceding the close of
          the principal trading session on such exchange; or

      o   a decision to permanently discontinue trading in the relevant futures
          or options contracts or exchange traded funds;

in each case as determined by the calculation agent in its sole discretion.

      For the purpose of determining whether a market disruption event exists at
any time, if trading in a security included in the Index is materially suspended
or materially limited at that time, then the relevant percentage contribution of
that security to the level of the Index shall be based on a comparison of:

      o   the portion of the level of the Index attributable to that security
          relative to

      o   the overall level of the Index,

in each case immediately before that suspension or limitation.

      For purposes of determining whether a market disruption event has
occurred, unless otherwise specified in the relevant terms supplement:

      o   a limitation on the hours or number of days of trading will not
          constitute a market disruption event if it results from an announced
          change in the regular business hours of the relevant exchange or
          market;

      o   limitations pursuant to the rules of any relevant exchange similar to
          NYSE Rule 80B (or any applicable rule or regulation enacted or
          promulgated by any other self-regulatory organization or any
          government agency of scope similar to NYSE Rule 80B as determined by
          the calculation agent in its sole discretion) on trading during
          significant market fluctuations will constitute a suspension, absence
          or material limitation of trading;

      o   a suspension of trading in futures or options contracts on the Index
          by the primary securities market trading in such contracts by reason
          of:

          o   a price change exceeding limits set by such exchange or market,

          o   an imbalance of orders relating to such contracts, or

          o   a disparity in bid and ask quotes relating to such contracts

          will, in each such case, constitute a suspension, absence or material
          limitation of trading in futures or options contracts related to the
          Index; and

      o   a "suspension, absence or material limitation of trading" on any
          relevant exchange or on the primary market on which futures or options
          contracts related to the Index are traded will not include any time
          when such market is itself closed for trading under ordinary
          circumstances.

      "Relevant exchange" means the primary exchange or market of trading for
any security (or any combination thereof) then included in the Index or any
successor index.

      COMMODITY INDEX


                                      SS-16



      With respect to notes linked to a commodity Index, a "market disruption
event," unless otherwise specified in the relevant terms supplement, means:

      o   the termination or suspension of, or material limitation or disruption
          in the trading on any relevant exchange of any futures contract
          underlying such Index;

      o   the settlement price on any relevant exchange of any futures contract
          underlying such Index has increased or decreased by an amount equal to
          the maximum permitted price change from the previous day's settlement
          price; or

      o   the settlement price of a futures contract underlying such Index is
          not published by the relevant exchange;

in each case as determined by the calculation agent in its sole discretion.

      The following events will not be market disruption events, unless
otherwise specified in the relevant terms supplement:

      o   a limitation on the hours in a trading day and/or the number of days
          of trading, but only if the limitation results from an announced
          change in the regular business hours of the relevant exchange; or

      o   a decision to permanently discontinue trading in a futures contract
          underlying such Index or option or futures contracts relating to such
          Index or any Index Commodity.

      "Relevant exchange" means any organized exchange or market of trading for
any futures contract (or any combination thereof) then underlying such Index or
any successor index.

EVENTS OF DEFAULT AND ACCELERATION

      Unless otherwise specified in the relevant terms supplement, in case an
event of default with respect to the notes shall have occurred and be
continuing, the amount declared due and payable per $1,000 principal amount note
upon any acceleration of the notes will be equal to $1,000 (or a portion of
$1,000 if there is a Partial Principal Protection Percentage set forth in the
relevant terms supplement), plus the Additional Amount, which will be calculated
as if the date of acceleration were the final Index Valuation Date, plus, if
applicable, any accrued and unpaid interest on the notes. If the notes have more
than one Index Valuation Date, then for each Index Valuation Date scheduled to
occur after the date of acceleration, the trading days immediately preceding the
date of acceleration (in such number equal to the number of Index Valuation
Dates in excess of one) shall be the corresponding Index Valuation Dates, unless
otherwise specified in the relevant terms supplement. Upon any acceleration of
the notes, any interest will be calculated on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed from and including
the previous Interest Payment Date for which interest was paid. See "Description
of Debt Securities-Defaults" in the accompanying base prospectus.

      If the maturity of the notes is accelerated because of an event of default
as described above, we shall, or shall cause the calculation agent to, provide
written notice to the trustee at its New York office, on which notice the
trustee may conclusively rely, and to DTC of the cash amount due with respect to
the notes as promptly as possible and in no event later than two business days
after the date of acceleration.

MODIFICATION

      Under the heading "Description of Debt Securities-Modification of the
Indentures" in the accompanying base prospectus is a description of when the
consent of each affected holder of debt securities is required to modify the
indenture.


                                      SS-17



DEFEASANCE

      The provisions described in the accompanying base prospectus under the
heading "Description of Debt Securities-Defeasance" are not applicable to the
notes, unless otherwise specified in the relevant terms supplement.

LISTING

      The notes will not be listed on any securities exchange, unless otherwise
specified in the relevant terms supplement.

BOOK-ENTRY ONLY ISSUANCE-THE DEPOSITORY TRUST COMPANY

      The Depository Trust Company, or DTC, will act as securities depositary
for the notes. The notes will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global notes certificates, representing the total aggregate
principal amount of the notes, will be issued and will be deposited with DTC.
See the description contained in the accompanying MTN prospectus supplement
under the heading "Description of the Notes-Forms of Notes."

REGISTRAR, TRANSFER AGENT AND PAYING AGENT

      Payment of amounts due at maturity on the notes will be payable and the
transfer of the notes will be registrable at the principal corporate trust
office of Citibank, N.A. ("Citibank") in The City of New York.

      Citibank or one of its affiliates will act as registrar and transfer agent
for the notes. Citibank will also act as paying agent and may designate
additional paying agents.

      Registration of transfers of the notes will be effected without charge by
or on behalf of Citibank, but upon payment (with the giving of such indemnity as
Citibank may require) in respect of any tax or other governmental charges that
may be imposed in relation to it.

GOVERNING LAW

      The notes will be governed by and construed in accordance with the law of
the State of New York.


                                      SS-18



                  CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

      The following is a summary of the material United States federal income
tax consequences of the purchase, ownership and disposition of the notes as of
the date of this product supplement no. 50-I. If any information in the MTN
prospectus supplement or the base prospectus is inconsistent with this product
supplement no 50-I, you should rely on information in this product supplement
no. 50-I. If any information in the relevant terms supplement is inconsistent
with this product supplement no. 50-I, you should rely on the information in the
relevant terms supplement. The relevant terms supplement may also add, update or
change information contained in this product supplement no. 50-I.

      Except where noted, this summary deals only with a note held as a capital
asset by a United States holder who purchases the note on original issue at its
initial offering price, and it does not deal with special situations. For
example, except where noted, this summary does not address:

   o  tax consequences to holders who may be subject to special tax treatment,
      such as dealers in securities or currencies, traders in securities that
      elect to use the mark-to-market method of accounting for their securities,
      financial institutions, regulated investment companies, real estate
      investment trusts, pass-through entities, tax-exempt entities or insurance
      companies;

   o  tax consequences to persons holding notes as part of a hedging,
      integrated, constructive sale or conversion transaction or a straddle;

   o  tax consequences to holders of notes whose "functional currency" is not
      the U.S. dollar;

   o  alternative minimum tax consequences, if any; or

   o  any state, local or foreign tax consequences.

      The discussion below is based upon the provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions as of the date of this synthetic convertible prospectus supplement.
Those authorities may be changed, perhaps retroactively, so as to result in
United States federal income tax consequences different from those discussed
below.

      If a partnership holds notes, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding notes, you should
consult your own tax advisors.

      Because there is no statutory, judicial or administrative authority
directly addressing the characterization of the 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 this prospectus supplement that could affect the timing, amount and
character of income, gain, loss or deduction.

      If you are considering the purchase of notes, you should consult your own
tax advisors concerning the federal income tax consequences in light of your
particular situation and any consequences arising under the laws of any other
taxing jurisdiction.

UNITED STATES HOLDERS

      The following discussion will apply to you if you are a United States
holder of notes.

      For purposes of this discussion, a United States holder is a beneficial
owner of a note that is for United States federal income tax purposes:

   o  an individual citizen or resident of the United States;

   o  a corporation (or any other entity treated as a corporation for United
      States federal income tax purposes) created or organized in or under the
      laws of the United States, any state thereof, or the District of Columbia;

   o  an estate the income of which is subject to United States federal income
      taxation regardless of its source; or


                                      SS-19



   o  a trust if (1) it is subject to the primary supervision of a court within
      the United States and one or more United States persons has the authority
      to control all substantial decisions of the trust or (2) it has a valid
      election in effect under applicable Treasury regulations to be treated as
      a United States person.

      A non-United States holder is a beneficial owner (other than a
partnership) of notes that is not a United States holder.

NOTES WITH A TERM OF NOT MORE THAN ONE YEAR

      If the term of the notes (including the issue date but not the maturity
date) from issuance to maturity (including the last possible date that the notes
could be outstanding) is not more than one year, the following discussion
applies. No statutory, judicial or administrative authority directly addresses
the treatment of such notes or instruments similar thereto for U.S. federal
income tax purposes and no ruling will be requested from the Internal Revenue
Service with respect to the notes. As a result, certain aspects of the U.S.
federal income tax consequences of an investment in such notes are uncertain.
Any differing treatment could affect the amount, timing and character of income
with respect to the notes.

      In general, all payments, including all stated interest, on the notes will
be included in the stated redemption price at maturity and will not be qualified
stated interest. As a result, you will generally be taxed on the discount
instead of stated interest. The discount will be equal to the excess of the
stated redemption price at maturity over the issue price of a short-term note,
unless you elect to compute this discount using tax basis instead of issue
price.

      In general, individuals and certain other cash method holders of
short-term notes are not required to include accrued discount in their income
currently unless they elect to do so, but may be required to include stated
interest in income as the income is received. Holders that report income for
United States federal income tax purposes on the accrual method and certain
other holders are generally required to accrue discount on short-term notes (as
ordinary income) on a straight-line basis, unless an election is made to accrue
the discount according to a constant yield method based on daily compounding. If
a holder is not required, and does not elect, to include discount in income
currently, any gain a holder realizes on the sale, exchange or retirement of a
short-term note will generally be ordinary income to the extent of the discount
accrued by the holder through the date of sale, exchange or retirement.

      Because the amount payable upon maturity of the notes is not fixed, it is
not clear to what extent holders generally required to accrue discount under the
short-term note rules would be required to accrue income with respect to the
notes or the extent to which any gain realized by holders on the sale, exchange
or maturity of the notes would be treated as capital gain or ordinary interest
income. Gain realized by a holder who has held the notes during their entire
term to maturity is likely to be treated as ordinary interest income. Any loss
realized by such holder upon maturity would be likely be treated as capital
loss, except possibly to the extent of amounts, if any, previously included in
income. You should consult your tax advisors regarding the proper treatment of
amounts paid in respect of the notes.

      If you do not elect to currently include accrued discount in income you
may be required to defer deductions for a portion of your interest expense with
respect to any indebtedness attributable to the short-term notes.

NOTES WITH A TERM OF MORE THAN ONE YEAR

      If the term of the notes (including the issue date but not the maturity
date) from issuance to maturity (including the last possible date that the notes
could be outstanding) is more than one year, the following discussion applies.

   ACCRUAL OF INTEREST

      The Treasury regulations that apply to contingent payment debt obligations
are expected to apply to the notes. All payments on the notes will be taken into
account under these Treasury regulations. As discussed more fully below, the
effect of these Treasury regulations will be to:


                                      SS-20



   o  require you, regardless of your usual method of tax accounting, to use the
      accrual method with respect to the notes;

   o  result in the accrual of original issue discount by you based on the
      "comparable yield" of the notes in excess of stated interest payments
      actually made to you; and

   o  generally result in ordinary rather than capital treatment of any gain,
      and to some extent loss, on the sale, exchange or other disposition of the
      notes.

      Under the contingent payment debt rules, you will be required to include
original issue discount in income each year, regardless of your usual method of
tax accounting, based on the "comparable yield" of the notes, which will
generally be the rate at which Lehman Brothers Holdings could issue a fixed rate
debt instrument with terms and conditions similar to the notes.

      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. You can
obtain the comparable yield of the notes and the projected payment schedule by
submitting a written request for them to Lehman Brothers Holdings at the
following address:

      Controller's Office
      Lehman Brothers Holdings Inc.
      745 Seventh Avenue
      New York, New York 10019
      (212) 526-7000

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.

      THE COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE ARE NOT PROVIDED
FOR ANY PURPOSE OTHER THAN THE DETERMINATION OF YOUR INTEREST ACCRUALS AND
ADJUSTMENTS THEREOF IN RESPECT OF THE NOTES AND DO NOT CONSTITUTE A
REPRESENTATION REGARDING THE ACTUAL AMOUNT OF THE PAYMENT ON A NOTE.

      The amount of original issue discount on a note for each accrual period is
determined by multiplying the comparable yield of the note, adjusted for the
length of the accrual period, by the note's adjusted issue price at the
beginning of the accrual period, determined in accordance with the rules set
forth in the contingent payment debt regulations. The amount of original issue
discount so determined is then allocated on a ratable basis to each day in the
accrual period that you held the note. Lehman Brothers Holdings is required to
provide information returns stating the amount of original issue discount
accrued on notes held of record by persons other than corporations and other
exempt owners.

      If an actual contingent payment made on the notes differs from the
projected contingent payment, an adjustment will be made for the difference. A
positive adjustment, for the amount by which an actual payment exceeds the
projected contingent payment, will be treated as additional original issue
discount in the current year. For these purposes, the payments in a taxable year
include the fair market value of property received in that year. A negative
adjustment will:

   o  first, reduce the amount of original issue discount required to be accrued
      in the current year; and

   o  second, any negative adjustments that exceed the amount of original issue
      discount accrued in the current year will be treated as ordinary loss to
      the extent of your total prior original issue discount inclusions with
      respect to the note.


                                      SS-21



   SALE, EXCHANGE, REDEMPTION, REPURCHASE OR OTHER DISPOSITION OF NOTES

      Upon the sale, exchange or other disposition of a note, you will recognize
gain or loss equal to the difference between your amount realized (including the
fair market value of any property received in a repurchase or redemption if
Lehman Brothers Holdings elects the stock settlement option) and your adjusted
tax basis in the note. Such gain on a note generally will be treated as ordinary
income. Loss from the disposition of a note will be treated as ordinary loss to
the extent of your prior net original issue discount inclusions with respect to
the note. Any loss in excess of that amount will be treated as capital loss.
Special rules apply in determining the tax basis of a note. Your adjusted tax
basis in a note is generally increased by original issue discount you previously
accrued on the note and reduced by the projected amount of any payments
previously scheduled to be made on the note.

NON-UNITED STATES HOLDERS

      The following discussion is a summary of certain United States federal tax
consequences that will apply to you if you are a Non-United States holder of
notes.

      Special rules may apply to you if you are a controlled foreign
corporation, passive foreign investment company, a corporation that accumulates
earnings to avoid United States federal income tax, or an individual who is a
United States expatriate and therefore subject to special treatment under the
Code. You should consult your own tax advisors to determine the United States
federal, state, local and other tax consequences that may be relevant to you.

UNITED STATES FEDERAL WITHHOLDING TAX

      The 30% United States federal withholding tax will not apply to any
payment, including original issue discount, on a note under the portfolio
interest rule provided that:

   o  interest paid on the note is not effectively connected with your conduct
      of a trade or business in the United States;

   o  you do not actually, or constructively, own 10% or more of the total
      combined voting power of all classes of Lehman Brothers Holdings' voting
      stock within the meaning of the Code and the Treasury regulations;

   o  you are not a controlled foreign corporation that is related to Lehman
      Brothers Holdings through stock ownership;

   o  you are not a bank whose receipt of interest on a note is described in
      Section 881(c)(3)(A) of the Code;

   o  any stocks underlying the Index remain actively traded on an established
      financial market within the meaning of Section 871(h)(4)(c)(v)(i) of the
      Code and are not a United States real property interest as defined in
      Section 897(c)(1) of the Code; and

   o  (1) you provide your name and address on an Internal Revenue Service Form
      W-8BEN and certify, under penalties of perjury, that you are not a United
      States holder or (2) you hold your notes through certain foreign
      intermediaries and you satisfy the certification requirements of
      applicable Treasury regulations.

      Special certification rules apply to holders that are pass-through
entities rather than individuals.

      If the requirements described above are not satisfied, payments made to
you will be subject to a 30% United States federal withholding tax, unless you
provide Lehman Brothers Holdings with a properly executed (1) IRS Form W-8BEN
(or other applicable form) claiming an exemption from, or reduction in,
withholding under the benefit of an applicable income tax treaty or (2) IRS Form
W-8ECI stating that interest paid on a note is not subject to withholding tax
because it is effectively connected with your conduct of a trade or business in
the United States (as described below under "United States federal income tax").
Alternative documentation may be applicable in certain situations.


                                      SS-22



UNITED STATES FEDERAL INCOME TAX

      Any gain or income on a note will generally be subject to United States
federal income tax if you are engaged in a trade or business in the United
States, and gain or income on the notes is effectively connected with the
conduct of that trade or business. In such case, you will be subject to United
States federal income tax on such gain or income on a net income basis (although
exempt from the 30% withholding tax, provided you comply with certain
certification and disclosure requirements discussed above in "United States
federal withholding tax") in the same manner as if you were a United States
holder. In addition, if you are a foreign corporation, you may be subject to a
branch profits tax equal to 30%, or lower applicable income tax treaty rate, of
your earnings and profits for the taxable year, subject to adjustments, that are
effectively connected with the conduct by you of a trade or business in the
United States.

UNITED STATES FEDERAL ESTATE TAX

      Your estate will not be subject to United States federal estate tax on
notes beneficially owned by you at the time of your death, provided that any
payment to you on a note would be eligible for exemption from the 30%
withholding tax under the rules described in the bullet points under the heading
"-United States federal withholding tax," without regard to the certification
requirements of the sixth bullet point.

INFORMATION REPORTING AND BACKUP WITHHOLDING

      If you are a United States holder of notes, information reporting
requirements will generally apply to all payments Lehman Brothers Holdings makes
to you and the proceeds from the sale of a note paid to you, unless you are an
exempt recipient such as a corporation. Backup withholding tax will apply to
those payments if you fail to provide a taxpayer identification number, a
certification of exempt status, or if you fail to report in full interest
income.

      If you are a Non-United States holder of notes, Lehman Brothers Holdings
must report annually to the Internal Revenue Service and to you the amount of
payments Lehman Brothers Holdings makes to you and the tax withheld with respect
to such payments, regardless of whether withholding was required. Copies of the
information returns reporting such payments and withholding may also be made
available to the tax authorities in the country in which you reside under the
provisions of an applicable income tax treaty. In general, you will not be
subject to backup withholding regarding payments Lehman Brothers Holdings makes
to you provided that Lehman Brothers Holdings does not have actual knowledge or
reason to know that you are a United States holder and Lehman Brothers Holdings
has received from you the statement described above under "-Non-United States
holders-United States federal withholding tax." In addition, you will be
subject to information reporting and, depending on the circumstances, backup
withholding regarding the proceeds of the sale of a note made within the United
States or conducted through United States-related intermediaries, unless the
payor receives the statement described above and does not have actual knowledge
or reason to know that you are a United States holder, or you otherwise
establish an exemption.

      Any amounts withheld under the backup withholding rules will be allowed as
a refund or credit against your United States federal income tax liability
provided the required information is furnished to the Internal Revenue Service.


                                      SS-23



                                  UNDERWRITING

      The notes are being offered by us through Lehman Brothers Inc., as
principal or agent. We and Lehman Brothers Inc. entered into a distribution
agreement with respect to the notes. We may sell notes at a discount to the
agent, as principal for its own account or for resale to one or more purchasers
at varying prices related to prevailing market prices or at a fixed public
offering price. Unless otherwise specified in the relevant terms supplement, any
note purchased by the agent as principal will be purchased at 100% of the
principal amount less a percentage specified in the relevant terms supplement.
In addition, the agent may offer and sell notes purchased by it as principal to
other dealers. These notes may be sold at a discount which, unless otherwise
specified in the relevant terms supplement, will not exceed the discount to be
received by the agent. After any initial public offering of notes to be resold
to purchasers at a fixed public offering price, the public offering price and
any concession or discount may be changed.

      Lehman Brothers Inc., as agent, has agreed to use its reasonable best
efforts to solicit orders to purchase notes. We will have the sole right to
accept orders to purchase notes and may reject proposed purchases in whole or in
part. Lehman Brothers Inc., as agent, will have the right to reject any proposed
purchase in whole or in part. We will generally pay the agent a commission of up
to 0.625% of the principal amount of notes sold through it as agent, depending
on the stated maturity.

      We own, directly or indirectly, all of the outstanding equity securities
of Lehman Brothers Inc. The underwriting arrangements for this offering comply
with the requirements of Rule 2720 of the Conduct Rules of the NASD regarding an
NASD member firm's underwriting of securities of an affiliate. In accordance
with Rule 2720, no underwriter may make sales in this offering to any
discretionary account without the prior approval of the customer.

      We may appoint other agents (either as principal or agent), other than or
in addition to Lehman Brothers Inc., with respect to any issue of notes. Any
other agents will be named in the relevant terms supplement and those agents
will enter into the distribution agreement referred to above with respect to
that issue of notes. The other agents may be our affiliates or our customers and
may engage in transactions with and perform services for us in the ordinary
course of business. Lehman Brothers Inc. may resell notes to or through another
of our affiliates, as selling agent.

      Lehman Brothers Inc. or another agent may act as principal or agent in
connection with offers and sales of the notes in the secondary market. Secondary
market offers and sales will be made at prices related to market prices at the
time of such offer or sale; accordingly, the agents or a dealer may change the
public offering price, concession and discount after the offering has been
completed.

      In order to facilitate the offering of the notes, Lehman Brothers Inc. may
engage in transactions that stabilize, maintain or otherwise affect the price of
the notes. Specifically, Lehman Brothers Inc. may sell more notes than it is
obligated to purchase in connection with the offering, creating a naked short
position in the notes for its own account. Lehman Brothers Inc. must close out
any naked short position by purchasing the notes in the open market. A naked
short position is more likely to be created if Lehman Brothers Inc. is concerned
that there may be downward pressure on the price of the notes in the open market
after pricing that could adversely affect investors who purchase in the
offering. As an additional means of facilitating the offering, Lehman Brothers
Inc. may bid for, and purchase, notes in the open market to stabilize the price
of the notes. Any of these activities may raise or maintain the market price of
the notes above independent market levels or prevent or retard a decline in the
market price of the notes. Lehman Brothers Inc. is not required to engage in
these activities, and may end any of these activities at any time.

      No action has been or will be taken by us, Lehman Brothers Inc. or any
dealer that would permit a public offering of the notes or possession or
distribution of this product supplement no. 50-I or the accompanying base
prospectus, MTN prospectus supplement, the relevant underlying supplement or the
relevant terms supplement, other than in the United States, where action for
that purpose is required. No offers, sales or deliveries of the notes, or
distribution of this product supplement no. 50-I or the


                                      SS-24



accompanying base prospectus, MTN prospectus supplement, underlying supplement
or terms supplement or any other offering material relating to the notes, may be
made in or from any jurisdiction except in circumstances which will result in
compliance with any applicable laws and regulations and will not impose any
obligations on us, the agents or any dealer.

      Each agent has represented and agreed, and each dealer through which we
may offer the notes has represented and agreed, that it, to the best of its
knowledge after due inquiry (i) will comply with all applicable laws and
regulations in force in any jurisdiction in which it offers or sells the notes
or possesses or distributes this product supplement no. 50-I and the
accompanying base prospectus, MTN prospectus supplement, underlying supplement
or terms supplements and (ii) will obtain any consent, approval or permission
required by it for the offer or sale by it of the notes under the laws and
regulations in force in any jurisdiction to which it is subject or in which it
makes such offers or sales. We shall not have responsibility for any Agent's or
any dealer's compliance with the applicable laws and regulations or obtaining
any required consent, approval or permission.

      The notes are not and will not be authorized by the Comision Nacional de
Valores for public offer in Argentina and may thus not be offered or sold to the
public at large or to sectors or specific groups thereof by any means, including
but not limited to personal offerings, written materials, advertisements or the
media, in circumstances which constitute a public offering of securities under
Argentine Law No. 17,811, as amended.

      The notes have not been and will not be registered with the "Comissao de
Valores Mobiliarios" - the Brazilian Securities and Exchange Commission ("CVM")
and accordingly, the notes may not be sold, promised to be sold, offered,
solicited, advertised and/or marketed within the Federative Republic of Brazil
in an offering that can be construed as a public offering under CVM Instruction
n(degree) 400, dated December 29, 2003, as amended from time to time.

      The notes have not been registered with the Superintendencia de Valores y
Seguros in Chile and may not be offered or sold publicly in Chile. No offer,
sales or deliveries of the notes, or distribution of this product supplement no.
50-I or the accompanying base prospectus, MTN prospectus supplement, underlying
supplement or terms supplement may be made in or from Chile except in
circumstances which will result in compliance with any applicable Chilean laws
and regulations.

      In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a "Relevant Member State"), the
agent has represented and agreed, and each underwriter agrees, that with effect
from and including the date on which the Prospectus Directive is implemented in
that Relevant Member State (the "Relevant Implementation Date") it has not made
and will not make an offer of the notes to the public in that Relevant Member
State except that it may, with effect from and including the Relevant
Implementation Date, make an offer of the notes to the public in that Relevant
Member State:

      (a) in (or in Germany, where the offer starts within) the period beginning
      on the date of publication of a prospectus in relation to those notes
      which has been approved by the competent authority in that Relevant Member
      State or, where appropriate, approved in another Relevant Member State and
      notified to the competent authority in that Relevant Member State, all in
      accordance with the Prospectus Directive and ending on the date which is
      12 months after the date of such publication;

      (b) at any time to legal entities which are authorised or regulated to
      operate in the financial markets or, if not so authorised or regulated,
      whose corporate purpose is solely to invest in securities;

      (c) at any time to any legal entity which has two or more of (1) an
      average of at least 250 employees during the last financial year; (2) a
      total balance sheet of more than (euro)43,000,000 and


                                      SS-25



      (3) an annual net turnover of more than (euro)50,000,000, as shown in its
      last annual or consolidated accounts; or

      (d) at any time in any other circumstances which do not require the
      publication by Lehman Brothers Holdings Inc. of a prospectus pursuant to
      Article 3 of the Prospectus Directive.

      For the purposes of this provision, the expression an "offer of the notes
to the public" in relation to any notes in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the notes to be offered so as to enable an investor to
decide to purchase or subscribe the notes, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member
State and the expression Prospectus Directive means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant Member State.

      The notes have not been, and will not be, registered with the National
Registry of Securities maintained by the Mexican National Banking and Securities
Commission nor with the Mexican Stock Exchange and may not be offered or sold
publicly in the United Mexican States. This product supplement no. 50-I and the
accompanying base prospectus, MTN prospectus supplement, underlying supplement
or terms supplements may not be publicly distributed in the United Mexican
States.

      Neither this product supplement no. 50-I nor the accompanying base
prospectus, MTN prospectus supplement, underlying supplement or terms
supplements have been registered as a prospectus with the Monetary Authority of
Singapore. Accordingly, this product supplement no. 50-I, the accompanying base
prospectus, MTN prospectus supplement, underlying supplement or terms
supplement, and any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the notes may not be
circulated or distributed, nor may the notes be offered or sold, or be made the
subject of an invitation for subscription or purchase, whether directly or
indirectly, to persons in Singapore other than (i) to an institutional investor
under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore
(the "SFA"), (ii) to a relevant person, or any person pursuant to Section
275(1A), and in accordance with the conditions, specified in Section 275 of the
SFA or (iii) otherwise pursuant to, and in accordance with the conditions of,
any other applicable provision of the SFA.

      The notes may not be offered or sold in Hong Kong, by means of any
document, other than to persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or agent, or in circumstances that do
not constitute an offer to the public within the meaning of the Companies
Ordinance (Cap. 32) of Hong Kong. Each Agent has not issued and will not issue
any advertisement, invitation or document relating to the notes, whether in Hong
Kong or elsewhere, which is directed at, or the contents of which are likely to
be accessed or read by, the public in Hong Kong (except if permitted to do so
under the securities laws of Hong Kong) other than with respect to notes which
are intended to be disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

      The agent has represented and agreed that:

      (a) in relation to any notes which have a maturity of less than one year,
      (i) it is a person whose ordinary activities involve it in acquiring,
      holding, managing or disposing of investments (as principal or agent) for
      the purposes of its business and (ii) it has not offered or sold and will
      not offer or sell any notes other than to persons whose ordinary
      activities involve them in acquiring, holding, managing or disposing of
      investments (as principal or as agent) for the purposes of their
      businesses or who it is reasonable to expect will acquire, hold, manage or
      dispose of investments (as principal or agent) for the purposes of their
      businesses where the issue of the notes would


                                      SS-26



      otherwise constitute a contravention of Section 19 of the Financial
      Services and Markets Act 2000 (the "FSMA") by such agent;

      (b) it has only communicated or caused to be communicated and will only
      communicate or cause to be communicated an invitation or inducement to
      engage in investment activity (within the meaning of Section 21 of the
      FSMA) received by it in connection with the issue or sale of any Notes in
      circumstances in which Section 21(1) of the FSMA does not apply to Lehman
      Brothers Holdings Inc.; and

      (c) it has complied and will comply with all applicable provisions of the
      FSMA with respect to anything done by it in relation to any notes in, from
      or otherwise involving the United Kingdom.

      This offering is extraterritorial (non-Venezuelan), directed exclusively
to clients of the underwriters and as such, no registrations or authorizations
will be required from the Comision Nacional de Valores.

      Unless otherwise specified in the relevant terms supplement, the
settlement date for the notes will be the third business day following the
pricing date (which is referred to as a "T+3" settlement cycle).


                                      SS-27



                      BENEFIT PLAN INVESTOR CONSIDERATIONS

      A fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employment Retirement Income Security Act of 1974, as amended
("ERISA"), including entities such as collective investment funds, partnerships
and separate accounts whose underlying assets include the assets of such plans
(collectively, "ERISA Plans") should consider the fiduciary standards of ERISA
in the context of the ERISA Plans' particular circumstances before authorizing
an investment in the notes. Among other factors, the fiduciary should consider
whether the investment would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the ERISA Plan.

      Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans, as
well as individual retirement accounts and Keogh plans subject to Section 4975
of the Code (together with ERISA Plans, "Plans"), from engaging in certain
transactions involving the "plan assets" with persons who are "parties in
interest" under ERISA or "disqualified persons" under the Code ("Parties in
Interest") with respect to such Plans. As a result of our business, we are a
Party in Interest with respect to many Plans. Where we are a Party in Interest
with respect to a Plan (either directly or by reason of ownership of our
subsidiaries), the purchase and holding of the notes by or on behalf of the Plan
would be a prohibited transaction under Section 406(a)(1) of ERISA and Section
4975(c)(1) of the Code, unless exemptive relief were available under an
applicable class, statutory or administrative exemption (as described below) or
there was some other basis on which the transaction was not prohibited.

      Accordingly, the notes may not be purchased or held by any Plan, any
entity whose underlying assets include "plan assets" by reason of any Plan's
investment in the entity (a "Plan Asset Entity") or any person investing "plan
assets" of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under Prohibited Transaction Class Exemption ("PTCE")
96-23, 95-60, 91-38, 90-1 or 84-14 issued by the U.S. Department of Labor or
there was some other basis on which the purchase and holding of the notes is not
prohibited. Each purchaser or holder of the notes or any interest therein will
be deemed to have represented by its purchase or holding of the notes or any
interest therein that (a) its purchase and holding of the notes is not made on
behalf of or with "plan assets" of any Plan or (b) its purchase and holding of
the notes will not result in a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code or there is some other basis on which such purchase
and holding is not prohibited.

      Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
non-U.S. plans (as described in Section 4(b)(4) of ERISA) are not subject to
these "prohibited transaction" rules of ERISA or Section 4975 of the Code, but
may be subject to similar rules under other applicable laws or documents
("Similar Laws"). Accordingly, each purchaser or holder of the notes or any
interest therein shall be deemed to have represented by its purchase or holding
of the notes or any interest therein) that such purchase and holding does not
violate applicable Similar Laws or rules.

      Due to the complexity of the applicable rules, it is particularly
important that fiduciaries or other persons considering purchasing the notes on
behalf of or with "plan assets" of any plan consult with their counsel regarding
the relevant provisions of ERISA, the Code or any Similar Laws and the
availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14
or some other basis on which the acquisition and holding is not prohibited.

      Each purchaser and holder of the notes has exclusive responsibility for
ensuring that its purchase and holding of the notes does not violate the
fiduciary or prohibited transaction rules of ERISA, the Code or any Similar
Laws. The sale of any notes to any plan is in no respect a representation by us
or any of our affiliates or representatives that such an investment meets all
relevant legal requirements with respect to investments by plans generally or
any particular plan, or that such an investment is appropriate for plans
generally or any particular plan.


                                      SS-28