POSASR

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As filed with the Securities and Exchange Commission on November 3, 2006

Registration No. 333-134553,
333-134553-01, 333-134553-02,
333-134553-03, 333-134553-04,
333-134553-05, 333-134553-06,
333-129195-02

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Post-Effective Amendment No. 2 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Lehman Brothers Holdings Inc.
Lehman Brothers Holdings Capital Trust VII
Lehman Brothers Holdings Capital Trust VIII
Lehman Brothers Holdings Capital Trust IX
Lehman Brothers Holdings Capital Trust X
Lehman Brothers Holdings Capital Trust XI
Lehman Brothers Holdings Capital Trust XII
Lehman Brothers Holdings E-Capital Trust I
Lehman Brothers Holdings E-Capital LLC I
(Exact Name of Registrant as Specified in its Charter) Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
(State or Other Jurisdiction of
Incorporation or Organization) 13-3216325
20-6366362
20-6367811
20-6367828
20-6367855
20-6367875
20-6856685
20-3646452
20-3646427
(I.R.S. Employer
Identification Number)

745 Seventh Avenue
New York, New York 10019
(212) 526-7000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

Thomas A. Russo, Esq.
Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019
(212) 526-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies To:
Andrew R. Keller, Esq. Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 (212) 455-2000	Barrett S. DiPaolo, Esq. Lehman Brothers Holdings Inc. 1301 Avenue of the Americas New York, New York 10019 (212) 526-7000

Approximate Date of Commencement of Proposed Sale of the Securities to the Public:
From time to time after the effective date of this Registration Statement, as determined by market conditions.

       If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.   o

       If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.   ý

       If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

       If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

       If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.   ý

       If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.   ý

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to Be Registered	Proposed Maximum Offering Price Per Unit(1)	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee(1)
Floating Rate Enhanced Capital Advantaged Preferred Securities of Lehman Brothers Holdings E-Capital Trust I	$300,000,000
Guarantee of Floating Rate Enhanced Capital Advantaged Preferred Securities	N/A(2)
Preferred Securities of Lehman Brothers Holdings E-Capital LLC I	$300,000,000
Guarantee of Preferred Securities of Lehman Brothers Holdings E-Capital LLC I	N/A(2)
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2035 of Lehman Brothers Holdings Inc.	$300,000,000

(1)

This registration statement covers an indeterminate amount of the listed securities that may be reoffered and resold on an ongoing basis in market-making transactions by affiliates of the registrants. Pursuant to Rule 457(q) under the Securities Act of 1933, as amended, no filing fee is required.

EXPLANATORY NOTE

        This Post-Effective Amendment No. 2 to the Registration Statement on Form S-3 (Commission File No. 333-134553) (the "Registration Statement") of Lehman Brothers Holdings Inc. and certain of its subsidiaries is being filed for the purpose of (i) adding Lehman Brothers Holdings E-Capital Trust I and Lehman Brothers Holdings E-Capital LLC as registrants under the Registration Statement, (ii) adding the additional classes of securities listed on the cover page hereof as securities registered under the Registration Statement and (iii) adding a prospectus for use in connection with market-making transactions in such securities by affiliates of the registrants. No changes or additions are being made hereby to the base prospectuses that already form a part of the Registration Statement. Accordingly, such base prospectuses are being omitted from this filing.

PROSPECTUS

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I

FLOATING RATE ENHANCED CAPITAL ADVANTAGED PREFERRED
SECURITIES ("ECAPS^SM")
(Liquidation amount $1,000 per trust preferred security)

guaranteed, to the extent set forth herein, by
LEHMAN BROTHERS HOLDINGS INC.

The Floating Rate Enhanced Capital Advantaged Preferred Securities (the "ECAPS^SM" or "trust preferred securities") represent preferred undivided beneficial ownership interests in the assets of Lehman Brothers Holdings E-Capital Trust I (the "trust"). The assets of the trust consist solely of LLC preferred securities (the "LLC preferred securities"), representing the preferred interests of Lehman Brothers Holdings E-Capital LLC I (the "LLC"). The LLC currently has no assets other than our $300,000,000 floating rate subordinated debenture due 2035 (the "Company Debenture") and certain U.S. government obligations and commercial paper of entities not affiliated with us (the "Eligible Debt Securities"). The trust passes through to holders of trust preferred securities their pro rata shares of cash distributions and cash payments upon redemption or dissolution, if any, received by the trust on the LLC preferred securities.

Distributions on the LLC preferred securities accumulate from the date of original issuance and are payable quarterly in arrears on each February 19, May 19, August 19 and November 19 (or the next succeeding business day if not a business day), at an annual rate of 3-month LIBOR plus a margin equal to 0.78% until August 19, 2010 and at an annual rate of 3-month LIBOR plus a margin equal to 1.78% from August 19, 2010 until August 19, 2035, and thereafter as described in this prospectus. Distributions may at any time at our option be, and if we fail to meet certain financial tests described in this prospectus must be, deferred. However, during any mandatory deferral period, we are required to use our commercially reasonable efforts to sell shares of our common stock or certain perpetual preferred stock to fund accumulated and unpaid distributions, including compounded amounts, in full.

The LLC preferred securities are redeemable by the LLC, in whole or in part, from time to time on or after August 19, 2010, at an amount per LLC preferred security equal to its liquidation preference of $1,000 plus any accumulated and unpaid distributions (on a compounded basis) thereon. The LLC preferred securities may also be redeemed, in whole but not in part, at any time upon the occurrence of a Special Event (as defined in this prospectus). The LLC will dissolve no later than August 19, 2065.

Payments in respect of the trust preferred securities and the LLC preferred securities are guaranteed on a subordinated basis by us to the extent described in this prospectus.

This prospectus will be used by Lehman Brothers Inc. in connection with offers and sales of the notes related to market-making transactions in the trust preferred securities effected from time to time. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. There is currently no active trading market for the trust preferred securities. The trust preferred securities are not listed on any securities exchange. Lehman Brothers Inc. has advised us that it is currently making a market in the trust preferred securities; however, it is not obligated to do so and may stop at any time. Lehman Brothers Inc. may act as principal or agent in any such transaction.

See "Risk Factors" beginning on page 9 for a discussion of certain factors that should be considered by prospective purchasers of the trust preferred securities, including certain United States federal income tax consequences.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

LEHMAN BROTHERS

November 3, 2006

"ECAPS"^SM is a service mark of Lehman Brothers Inc.

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	9
Cautionary Statement Regarding Forward-Looking Statements	14
Use of Proceeds	15
Ratios of Earnings to Fixed Charges	15
Accounting Treatment	15
Lehman Brothers Holdings Inc.	16
Lehman Brothers Holdings E-Capital Trust I	17
Lehman Brothers Holdings E-Capital LLC I	19
Selected Financial Data for the Trust	20
Selected Financial Data for the LLC	21
Management's Discussion and Analysis of Financial Condition and Results of Operations of the Trust and the LLC	22
Description of the Trust Preferred Securities	24
Description of the Trust Guarantee	36
Description of the LLC Preferred Securities	39
Description of the LLC Guarantee	54
Description of the LLC Investments	57
Relationship among the Trust Preferred Securities, the LLC Preferred Securities, the Affiliate Debt Instruments and the Guarantees	66
Certain United States Federal Income Tax Considerations	69
Certain ERISA Considerations	73
Plan of Distribution	76
Legal Matters	76
Experts	76
Where You Can Find More Information	77
Index to Financial Statements	F-1

        You should rely only on the information contained or incorporated by reference in this prospectus. Lehman Brothers Holdings has not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Lehman Brothers Holdings is not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus, as well as information Lehman Brothers Holdings previously filed with the Securities and Exchange Commission and incorporated by reference, is accurate as of the date of the applicable document. Lehman Brothers Holdings' business, financial condition, results of operations and prospects may have changed since that date.

ECAPS STRUCTURE

        Lehman Brothers has applied for patent protection for the ECAPS structure described in this prospectus.

GENERAL INFORMATION

        Please note that in this prospectus references to "Lehman Brothers Holdings," "we," "us" and "our" refer only to Lehman Brothers Holdings Inc. and not to its consolidated subsidiaries.

        Also, in this prospectus, references to "holders" mean those who own securities registered in their own names, on the books that we, the trustee or an agent maintains for this purpose, and not those who own beneficial interests in securities registered in street name or in securities issued in book-entry form through one or more depositaries. The trust preferred securities are issued in book-entry form only. Owners of beneficial interests in the securities should read the section entitled "Description of the Trust Preferred Securities—Book Entry Only Issuance—The Depository Trust Company."

        This prospectus contains summaries of provisions of certain documents that are described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. You may obtain copies of those documents as described below under "Where You Can Find More Information."

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SUMMARY

This summary highlights selected information in this prospectus, but it may not contain all of the information that you should consider before deciding to invest in the notes. You should read this entire prospectus carefully, including the "Risk Factors" section and the financial statements, which are included elsewhere in this prospectus.

Our Company

        Lehman Brothers Holdings Inc. ("we," "us," "our" or "Lehman Brothers Holdings") and subsidiaries (collectively, "Lehman Brothers"), an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients and high-net-worth individuals worldwide. Lehman Brothers provides a full array of equities and fixed income sales, trading and research, investment banking services and investment management and advisory services. Lehman Brothers' global headquarters in New York and regional headquarters in London and Tokyo are complemented by offices in additional locations in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman Brothers, through predecessor entities, was founded in 1850.

        Lehman Brothers Holdings Inc. was incorporated in Delaware on December 29, 1983. Our principal executive offices, and the principal executive offices of Lehman Brothers Holdings E-Capital Trust I (the "trust") and Lehman Brothers Holdings E-Capital LLC I (the "LLC"), are at 745 Seventh Avenue, New York, New York 10019 (telephone: (212) 526-7000).

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The Securities

The Trust	Lehman Brothers Holdings E-Capital Trust I, a Delaware statutory trust. The sole assets of the trust will be the LLC preferred securities.
The LLC	Lehman Brothers Holdings E-Capital LLC I, a Delaware limited liability company. The assets of the LLC currently consist of the Company Debenture and certain Eligible Debt Securities. After the 30-year stated maturity of the Company Debenture, the LLC may, subject to certain restrictions, reinvest the proceeds it receives upon repayment of the Company Debenture in our debt securities and debt securities of certain of our affiliates, and in Eligible Debt Securities.
Outstanding Securities	300,000 of trust preferred securities, each with a liquidation amount of $1,000.
	The risks and rewards and economic entitlements of an investment in the trust preferred securities are substantially the same as the risks and rewards and economic entitlements of an investment in a corresponding amount of the underlying LLC preferred securities.
Termination Date	The trust will dissolve no later than August 19, 2065.
Distributions	Holders of the trust preferred securities receive distributions of their pro rata portion of any cash payments received by the trust on the LLC preferred securities. Distributions on the LLC preferred securities accumulate from the date of original issuance of the LLC preferred securities and are payable quarterly in arrears on each February 19, May 19, August 19 and November 19 (or the next succeeding business day if not a business day), at an annual rate of 3-month LIBOR for the related distribution period plus a margin equal to 0.78% until August 19, 2010 (the "Initial Floating Rate") and at an annual rate of 3-month LIBOR plus a margin equal to 1.78% from August 19, 2010 until August 19, 2035 (the "Stepped-Up Floating Rate"), and thereafter as described in this prospectus (the "stated distribution rate"). The term "distribution period" means each period from and including a payment date (or the date of initial issuance of the LLC preferred securities in the case of the first distribution period) to but not including the next succeeding payment date. Distributions not paid on the payment date will accumulate on a compounded basis at the then applicable stated distribution rate.
	The ability of the trust to pay distributions on the trust preferred securities is entirely dependent on its receipt of corresponding distributions with respect to the LLC preferred securities. The ability of the LLC to pay distributions on the LLC preferred securities is, in turn, dependent on its receipt of payments with respect to any of our debt securities and debt securities of our affiliates (including the Company Debenture, the "Affiliate Debt Instruments") and the Eligible Debt Securities held by the LLC and, in certain events, proceeds from the sale of our common stock and perpetual preferred stock and additional contributions by us to the LLC. See "Optional Deferral" and "Mandatory Deferral." Distributions on the LLC preferred securities are payable on each payment date at the stated distribution rate unless, as described below in this summary under "Optional Deferral" and "Mandatory Deferral," (i) we exercise our right as managing member of the LLC to cause such distributions to be deferred, which we may do in our sole discretion, or (ii) the LLC is required to defer distributions because we fail to meet certain financial tests described herein.

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Optional Deferral	We, as the managing member of the LLC, in our sole discretion may determine to cause the LLC not to pay distributions on one or more payment dates. However, if as of any payment date and after giving effect to the distribution (if any) paid on that date, the LLC has failed to pay simple distributions in full on an aggregate of 20 payment dates (whether or not consecutive), we must use our commercially reasonable efforts to sell our common stock or our perpetual preferred stock, and contribute the net proceeds to the LLC in an amount sufficient to pay all accumulated and unpaid distributions, including compounded amounts, on the LLC preferred securities in full. If our common stock or such perpetual preferred stock cannot be sold in an amount sufficient for the LLC to pay such distributions, and if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, the LLC may be dissolved and its assets distributed to the trust as described in this prospectus.
	The term "simple distribution," for any payment date, means the product of the aggregate liquidation preference of the LLC preferred securities and the Initial Floating Rate until August 19, 2010 or the Stepped-Up Floating Rate thereafter.
	Any distribution on a payment date will first be allocated to payment of the simple distribution due on that payment date. Any payment of distributions in excess of the amount of the simple distribution due on that payment date will be applied first against any then existing accumulated and unpaid simple distributions, in chronological order, and then against any accumulated and unpaid compounded amounts. Once a deferred simple distribution for any prior payment date has been paid, that payment date will no longer be included for purposes of calculating the 20- and 28-payment date triggers referred to in this section and below under " — Mandatory Deferral."
Mandatory Deferral	If we fail to meet certain financial tests described in this prospectus, the LLC may not pay distributions on the LLC preferred securities on any payment date in excess of the net proceeds of common stock or perpetual deferrable preferred stock issued by us during the 90 days prior to that payment date. However, if the LLC fails to pay full simple distributions on any payment date because of these provisions, we must use our commercially reasonable efforts to sell our common stock or perpetual deferrable preferred stock and contribute the net cash proceeds to the LLC in an amount sufficient to pay all accumulated and unpaid distributions, including compounded amounts, on the LLC preferred securities in full. To the extent that common stock or perpetual deferrable preferred stock cannot be sold in an amount sufficient for the LLC to pay such accumulated and unpaid distributions in full, if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, the LLC may be dissolved and its assets distributed to the trust as described in this prospectus.

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Lehman Brothers Holdings Dividend Stopper	In addition, we have agreed that if:
	•	full distributions on a compounded basis on any LLC preferred securities or trust preferred securities have not been paid for any distribution period at the Initial Floating Rate until August 19, 2010 and at the Stepped-Up Floating Rate thereafter,
	•	an event of default or a deferral period occurs and is continuing on any Affiliate Debt Instrument, or
	•	we are in default on any of our obligations under the trust guarantee, the LLC guarantee or any Investment Guarantee,
	then, during such period we will not, nor will we permit any of our subsidiaries to, declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of our capital stock and certain other junior securities, subject to certain exceptions described in this prospectus.
Rights Upon Non-Payment of Distributions and Certain Defaults	If, at any time, one of the following events (each, an "Enforcement Event") occurs:
	•	if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates,
	•	an event of default occurs and is continuing on any Affiliate Debt Instrument, or
	•	we are in default of any of our obligations under the trust guarantee, the LLC guarantee or any Investment Guarantee,
	then the Property Trustee serve as a "Special Representative" to the LLC and act as a "manager" of the LLC. The Special Representative will have the right to act on behalf of the LLC to enforce the LLC's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees and its rights against us under the LLC Agreement (including with respect to our obligation to use commercially reasonable efforts to sell our common stock or perpetual preferred stock and contribute the proceeds to the LLC under the circumstances described above, and our obligation not to pay dividends on or make certain other payments with respect to our capital stock under the circumstances described above) and the rights of the holders of the LLC preferred securities to receive distributions (only if and to the extent not deferred by the managing member at its discretion or during a mandatory deferral period) on the LLC preferred securities. Additionally, upon the occurrence of an Enforcement Event, the LLC guarantee trustee and the trust guarantee trustee have the right to enforce the LLC guarantee and the trust guarantee, respectively.

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	In addition, if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, the Property Trustee will have the right to direct the Special Representative to dissolve the LLC and to enforce the trust's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees distributed to it in such dissolution.
Optional Redemption	The LLC preferred securities are redeemable for cash, at the option of the managing member, in whole or in part, from time to time after August 19, 2010, at an amount per LLC preferred security equal to the $1,000 liquidation preference plus accumulated and unpaid distributions on a compounded basis (the "redemption price"), provided that if the LLC preferred securities are not redeemed in whole, at least $50 million aggregate liquidation amount of trust preferred securities (excluding trust preferred securities held by us or any of our affiliates) remains outstanding immediately after any such partial redemption. Upon any redemption of the LLC preferred securities, the trust preferred securities and trust common securities will be redeemed on a pro rata basis and the trust preferred securities will be redeemed at a corresponding redemption price.
	Neither the LLC preferred securities nor the trust preferred securities are redeemable at any time at the option of the holders thereof.
Special Event Redemption or Distribution	Upon the occurrence of a Tax Event (which event will generally be triggered upon the occurrence of certain adverse tax consequences to the trust or the LLC or the denial of an interest deduction on the Affiliate Debt Instruments held by the LLC) or an Investment Company Event (which event will generally be triggered if the trust or the LLC is considered an "investment company" under the Investment Company Act of 1940, as amended), except in certain limited circumstances, we as managing member of the LLC will have the right to either (1) dissolve the LLC and distribute its assets to the trust or (2) redeem the Affiliate Debt Instruments and in turn the LLC preferred securities, in whole (but not in part), at the redemption price, in which event the trust preferred securities will be redeemed at the same price. We refer to a Tax Event or an Investment Company Event as a "Special Event."

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Capital Replacement Provision	In the event that we redeem the LLC preferred securities at our option or as a result of a Special Event, we intend to redeem the LLC preferred securities only to the extent the aggregate redemption price is equal to or less than the net proceeds, if any, received by us or any of our subsidiaries from new issuances by us or any of our subsidiaries to purchasers other than our affiliates during the period commencing on the 180th calendar day prior to the date of redemption of any securities that have equal or greater equity characteristics for us as the LLC preferred securities.
Affiliate Debt Instruments	The Company Debenture will mature on August 19, 2035 and bear interest at the Initial Floating Rate until August 19, 2010 and at the Stepped-Up Floating Rate thereafter, payable quarterly in arrears on February 19, May 19, August 19 and November 19, unless interest is deferred as described below. Interest not paid on any payment date will accrue and compound quarterly at a rate per annum equal to the then applicable rate on the Company Debenture.
	Our obligations under the Company Debenture are subordinated to all of our indebtedness, other than certain indebtedness incurred in the ordinary course of business and any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, the Company Debenture. As of August 31, 2006, our consolidated unsecured long-term indebtedness that ranked senior to our obligations under the Company Debenture was $72.6 billion, which includes $1.2 billion aggregate principal amount of junior subordinated notes related to the trust preferred securities of four other Delaware statutory trusts wholly owned by us.
	Any Affiliate Debt Instruments that the LLC invests in from time to time will have terms and conditions similar to the Company Debenture, including the ability to defer interest payments. Certain terms, such as the interest rate, redemption provisions and covenants, will be those appropriate for unsecured debt securities issued by the Company or its affiliates at the time of such issuance pursuant to a public offering or private placement under Rule 144A of a debt security comparable to the Affiliate Debt Instruments as determined by the Independent Financial Advisor.
Guarantees	We irrevocably guarantee, on a subordinated basis, the payment in full of (i) any accumulated and unpaid distributions on the trust preferred securities to the extent of funds of the trust available therefor, (ii) the amount payable upon redemption of the trust preferred securities to the extent of funds of the trust available therefor and (iii) the liquidation amount of the trust preferred securities to the extent of the assets of the trust available for distribution to holders of trust preferred securities.

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	We also irrevocably guarantee, on a subordinated basis, the payment in full of (i) any accumulated and unpaid distributions on the LLC preferred securities to the extent they become payable after giving effect to any deferrals described above and to the extent of funds of the LLC available therefor, (ii) the amount payable upon redemption of the LLC preferred securities to the extent of funds of the LLC available therefor and (iii) the liquidation preference of the LLC preferred securities to the extent of the assets of the LLC available for distribution to holders of LLC preferred securities.
	We guarantee, on a subordinated basis, payments in respect of any Affiliate Debt Instruments not issued by us, to the extent described under "Description of the LLC Investments—Investment Guarantees." Our obligations under the Investment Guarantees constitute unsecured obligations of ours and are subordinated and junior in right of payment to all our senior debt to the same extent as the Company Debenture and ranks pari passu with the Company Debenture.
	The guarantees, when taken together with the Affiliate Debt Instruments and our obligations to pay all fees and expenses of the trust and the LLC and the other arrangements described in this prospectus, constitute a guarantee by us to the extent set forth in this prospectus of the distribution, redemption and dissolution payments payable to the holders of the trust preferred securities other than payments of such amounts, if any, as the holders of trust preferred securities are entitled to receive in respect of the Eligible Debt Securities.
Voting Rights	Generally, holders of the trust preferred securities do not have any voting rights. The holders of a majority in liquidation amount of the trust preferred securities, however, have the right to direct the time, method and place of conducting any proceeding for any remedy available to the property trustee, or direct the exercise of any trust or power conferred upon the property trustee under the declaration of trust, including the right to direct the property trustee, as holder of the LLC preferred securities, (i) to exercise its rights in the manner described above under "Rights Upon Non-Payment of Distributions and Certain Defaults" and (ii) to consent to any amendment, modification or termination of the LLC Agreement or the LLC preferred securities where such consent is required. See "Description of the Trust Preferred Securities—Trust Enforcement Events" and "—Voting Rights."
Liquidation Amount	In the event of any dissolution of the trust, holders of trust preferred securities will be entitled to receive their pro rata share of amounts received by the holders of LLC preferred securities upon dissolution of the LLC. Upon dissolution of the LLC, the holders of the LLC preferred securities will be entitled to an amount per LLC preferred security equal to the liquidation preference of $1,000 plus accumulated and unpaid distributions on a compounded basis before we, as the holder of the LLC common securities, are entitled to any payment. If available amounts are less than the liquidation preference of $1,000 plus accumulated and unpaid distributions on a compounded basis, such amounts will only be allocated to the LLC preferred securities.

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Form of Trust Preferred Securities	The trust preferred securities are represented by a global security or securities registered in the name of Cede & Co., as nominee for DTC. Beneficial interests in the trust preferred securities are evidenced by, and transfers thereof are effected only through, records maintained by the participants in DTC. Except as described in this prospectus, trust preferred securities in certificated form may not be issued in exchange for the global security or securities. See "Description of the Trust Preferred Securities—Book-Entry Only Issuance—The Depository Trust Company."
Transfer Restrictions	The trust preferred securities may be transferred only in amounts having an aggregate liquidation amount of at least $100,000 (100 trust preferred securities). Any transfer, sale or other disposition of trust preferred securities in an amount having an aggregate liquidation amount of less than $100,000, or resulting in a holder's holding trust preferred securities in an amount having an aggregate liquidation amount of less than $100,000, will be deemed to be void and of no legal effect.
Federal Income Tax Considerations	We intend to treat the trust as a grantor trust and the LLC as a partnership for United States federal income tax purposes. Thus, a holder of trust preferred securities will include such holder's proportionate share of income and deductions of the LLC. See "Certain United States Federal Income Tax Considerations."

Risk Factors

        You should carefully consider all the information in this prospectus before deciding whether to invest in the trust preferred securities. In particular, we urge you to consider carefully the factors set forth under the heading "Risk Factors."

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RISK FACTORS

Distributions by the LLC may be deferred in our discretion and, in such case, holders will be required to recognize income for U.S. federal income tax purposes in advance of the receipt of cash attributable to such income.

        Distributions on the LLC preferred securities may be deferred by us, as the managing member of the LLC, in our sole discretion. Interest payments on the Affiliate Debt Instruments, including the Company Debenture, can be deferred by the applicable issuer (including us) from time to time for up to 20 consecutive quarters, provided that at the end of any deferral period, the issuer then pays all accrued and unpaid interest, and so long as any deferral does not extend beyond the stated maturity date of such Affiliate Debt Instrument. If interest payments on the Company Debenture and other Affiliate Debt Instruments are deferred or if such interest payments are not paid to the LLC according to their terms, the LLC will generally lack funds to pay distributions on the LLC preferred securities. In addition, we, as managing member of the LLC, may fail to pay simple distributions in full on up to an aggregate of 28 payment dates without triggering the right of the Special Representative to require dissolution of the LLC as described in this prospectus. Furthermore, so long as a mandatory deferral event occurs and is continuing, the LLC will be required to defer distributions on the LLC preferred securities to the extent that we cannot sell sufficient common stock or our perpetual deferrable preferred stock to pay such distributions. If the LLC does not make current distributions on the LLC preferred securities, either because the managing member defers distributions to be made or because the LLC lacks sufficient funds, the trust will not have funds available to make current distributions on the trust preferred securities.

        If the issuer of an Affiliate Debt Instrument pays all accrued and unpaid interest with respect to such Affiliate Debt Instrument, the issuer may defer the payment of interest for a new 20-quarter deferral period. As a result, if the LLC is dissolved because payments on the LLC preferred securities have been deferred for more than 28 quarters, and at such time all accrued interest has been paid on any Affiliate Debt Instruments held by the LLC, interest on the Affiliate Debt Instruments may be deferred for a new 20-quarter deferral period and holders of the trust preferred securities may not receive distributions for up to 48 consecutive quarters.

        Even if distributions are not made on the LLC preferred securities, each holder of trust preferred securities will still be required to include in its income, for U.S. federal income tax purposes, its allocable share of income on the LLC preferred securities. In that event, each holder of trust preferred securities will recognize income for United States federal income tax purposes in advance of the receipt of cash and will not receive the cash related to such income from the trust related to such income if such holder disposes of its trust preferred securities prior to the record date for the date on which distributions of such amounts are made by the trust.

The trust preferred securities may be redeemed when prevailing interest rates are relatively low.

        We, as the managing member of the LLC, have the option to redeem the LLC preferred securities for cash, in whole or in part, from time to time after August 19, 2010. See "Description of the LLC Preferred Securities—Optional Redemption." Additionally, upon the occurrence of a Tax Event or an Investment Company Event (each as defined in this prospectus) prior to August 19, 2010, we have the option to redeem the LLC preferred securities for cash, in whole (but not in part). See "Description of the LLC Preferred Securities—Special Event Redemption or Distribution." Upon any such redemption of the LLC preferred securities, the trust preferred securities will be redeemed at the same price. We may choose to redeem the trust preferred securities when prevailing interest rates are lower than the rate then borne by the trust preferred securities. In that case you would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the trust preferred securities.

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The trust preferred securities are effectively subordinated to substantially all of our debt.

        Our obligations under the Company Debenture are, and under any Investment Guarantees will be, subordinate and junior in right of payment to all of our indebtedness except any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, the Company Debenture and certain other indebtedness, including indebtedness incurred in the ordinary course of business ("senior debt"). This means that we cannot make any payments on the Company Debenture and any Investment Guarantee if we default on a payment of senior debt and do not cure the default within the applicable grace period or if the senior debt becomes immediately due because of a default and has not yet been paid in full. In addition, our obligations under the Company Debenture and any Investment Guarantee will be effectively subordinated to all existing and future liabilities of our subsidiaries. As of August 31, 2006, our consolidated unsecured long-term indebtedness that ranked senior to our obligations under the Company Debenture was $72.6 billion, which includes $1.2 billion aggregate principal amount of junior subordinated notes related to the trust preferred securities of four other Delaware statutory trusts wholly owned by us.

        Our obligations under the trust guarantee and the LLC guarantee are subordinate and junior in right of payment to all of our indebtedness and will rank pari passu with the most senior preferred stock issued, if any, from time to time by us.

        There are no terms in the trust preferred securities, the LLC preferred securities, the guarantees or the Affiliate Debt Instruments that limit our ability to incur additional indebtedness.

If a mandatory deferral event has occurred and we are unable to sell our common stock or perpetual preferred stock for a period continuing for at least two years, amounts received by the trust in respect of interest on the Affiliate Debt Instruments accrued from that date will be effectively subordinated to payments on our outstanding preferred stock in the event of our bankruptcy or dissolution.

        So long as the LLC is in existence and has not been dissolved, in the event of our bankruptcy or dissolution and if a mandatory deferral event has occurred and we are unable to sell our common stock or perpetual deferrable preferred stock for a period continuing for at least two years, any amounts received by the trust in respect of interest on the Affiliate Debt Instruments accrued from that date forward is required to be paid by the property trustee directly to the holders of our then outstanding preferred or preference stock, if any, or their representatives, to the extent necessary to pay in full any amounts then payable on such preferred or preference stock remaining unpaid. As of August 31, 2006, we had $1.2 billion aggregate liquidation preference of preferred stock outstanding.

We are a holding company and payments on any Affiliate Debt Instruments issued by us, including the Company Debenture, will only be made from our earnings and assets, and not those of our subsidiaries.

        The Company Debenture and any other Affiliate Debt Instruments issued by us will be solely our obligations, and no other entity will have any obligation, contingent or otherwise, to make any payments in respect of such securities. Because we are a holding company whose primary assets consist of shares of stock or other equity interests in or amounts due from subsidiaries, almost all of our income is derived from those subsidiaries. Our subsidiaries will have no obligation to pay any amount in respect of the Company Debenture or other Affiliate Debt Instruments issued by us or to make any funds available therefor. Accordingly, we will be dependent on dividends and other distributions or loans from our subsidiaries to generate the funds necessary to meet obligations with respect to such securities, including the payment of principal and interest. Due to covenants contained in certain of our debt agreements and regulations relating to capital requirements affecting certain of our more significant subsidiaries, the ability of certain subsidiaries to pay dividends and other distributions and make loans to us is restricted. At November 30, 2005, approximately $7.6 billion of net assets of our subsidiaries were restricted as to the payment of dividends to us. Additionally, as an equity holder, our

10

ability to participate in any distribution of assets of any subsidiary is subordinate to the claims of creditors of the subsidiary, except to the extent that any claims we may have as a creditor of the subsidiary are judicially recognized. If these sources are not adequate, we may be unable to make payments of principal or interest in respect of the Company Debenture and any other Affiliate Debt Instrument issued by us.

We are not required to pay you under the trust guarantee or the LLC guarantee if the trust or the LLC does not have cash available.

        The ability of the trust to make payments on the trust preferred securities is solely dependent upon the LLC's ability to pay amounts due on the LLC preferred securities, which is in turn solely dependent upon our and our affiliates making the related payments on the Affiliate Debt Instruments, including the Company Debenture, when due.

        If we or our affiliates default on obligations to make payments on the Affiliate Debt Instruments, the LLC and the trust will not have sufficient funds to make payments on the LLC preferred securities and trust preferred securities. In those circumstances, you will not be able to rely upon the LLC guarantee or trust guarantee for payment of these amounts. In addition, in the event that we are unable to make payments on the Affiliate Debt Instruments that we issue, there is a substantial likelihood that we will be unable to make payments on the Investment Guarantees of the Affiliate Debt Instruments that are not issued by us if, as and when required.

Enforcement of certain rights by or on behalf of holders of trust preferred securities may be limited until simple distributions on the LLC preferred securities have not been paid in full on an aggregate of 28 payment dates.

        If an event of default occurs and is continuing on any Affiliate Debt Instrument or we are in default on any of our obligations under any of our guarantees, then the holders of trust preferred securities would rely on the enforcement by the property trustee of its rights, as a holder of the LLC preferred securities, against us, including its rights as Special Representative to enforce (i) the LLC's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees, (ii) the LLC's rights against us under the LLC Agreement (including with respect to our obligation to use commercially reasonable efforts to sell our common stock or perpetual preferred stock and contribute the proceeds to the LLC, and our obligation not to pay dividends on or make certain other payments with respect to our capital stock under certain circumstances) and (iii) the rights of the holders of the LLC preferred securities to receive distributions (only if and to the extent not deferred by the managing member at its discretion or during a mandatory deferral period) on the LLC preferred securities. Additionally, upon the occurrence of an Enforcement Event, the LLC guarantee trustee and the trust guarantee trustee have the right to enforce the LLC guarantee and the trust guarantee, respectively. Under no circumstances, however, will the Special Representative, any holder of LLC preferred securities or any holder of trust preferred securities have authority to prevent us, as the managing member of the LLC, from deferring distributions on the LLC preferred securities until such time, if any, as simple distributions have not been paid in full on an aggregate of 28 payment dates, at which time the LLC may be dissolved at the request of the Special Representative. As a result, although the Special Representative may be able to enforce the LLC's rights to accelerate and receive payments in respect of the Affiliate Debt Instruments and the Investment Guarantees, the LLC would be entitled to reinvest such payments in additional Affiliate Debt Instruments subject to satisfying the reinvestment criteria described under "Description of the LLC Investments" and the Eligible Debt Securities, rather than making distributions on the LLC preferred securities. See "Description of the LLC Preferred Securities—Distributions." If after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates,

11

then the property trustee may dissolve the LLC and enforce the trust's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees distributed to the trust in such dissolution.

Holders of the trust preferred securities have limited voting rights.

        Holders of the trust preferred securities have limited voting rights and are entitled to vote to appoint, remove or replace, or to increase or decrease the number of, trustees, including the property trustee, which voting rights are vested exclusively in the holder of the trust common securities. See "Description of the Trust Preferred Securities—Voting Rights."

The trading price of the trust preferred securities may be less than the value of such securities and more volatile than other securities.

        We have no current intention of deferring interest payments on the Affiliate Debt Instruments or distributions on the LLC preferred securities and believe that such deferral is a remote possibility. However, if such payments are deferred or the market perceives that the likelihood of deferral is increasing, the trust preferred securities may trade at a price that does not fully reflect the value of such amounts. If you sell the trust preferred securities during a deferral period, you may not receive the same return on investment as someone else who continues to hold the trust preferred securities. In addition, because interest payments on the Affiliate Debt Instruments and distributions on the LLC preferred securities may be deferred, the trust preferred securities may be more volatile than other securities that do not have these terms.

You may suffer a loss if the Affiliate Debt Instruments are distributed to you in exchange for trust preferred securities because market prices for the trust preferred securities or the Affiliate Debt Instruments may not be equal.

        We cannot give you any assurance as to the market prices for the trust preferred securities or the Affiliate Debt Instruments that may be distributed in exchange for trust preferred securities. Accordingly, the trust preferred securities that an investor may purchase or the Affiliate Debt Instruments that a holder of trust preferred securities may receive in exchange for trust preferred securities, may trade at a discount to the price that the investor paid to purchase the trust preferred securities.

You could suffer adverse tax consequences if the trust and the LLC are dissolved and Affiliate Debt Instruments are distributed to holders of trust preferred securities.

        If the LLC is dissolved, we may distribute the Affiliate Debt Instruments to the trust. We may in turn redeem the trust preferred securities by distributing Affiliate Debt Instruments to holders of the trust preferred securities on a proportionate basis. Under current U.S. federal income tax law, and assuming, as expected, the LLC is treated as a partnership and the trust is treated as a grantor trust, such a distribution of Affiliate Debt Instruments to the trust or to you should not be a taxable event. However, if the trust or the LLC is characterized for United States federal income tax purposes as an association taxable as a corporation at the time it is dissolved, or if there is a change in law, the distribution of Affiliate Debt Instruments to the trust or to you may be a taxable event.

Alternative tax characterizations of the trust preferred securities are possible.

        The transactions described in this prospectus are complex. Alternative characterizations could affect the amount, timing and character of income, gain or loss recognized by holders of the trust preferred securities, and non-U.S. holders could be subject to U.S. federal withholding taxes at rates of up to 30%. However, based on the characterization of the transactions described in "Certain United

12

States Federal Income Tax Considerations," the LLC and the trust do not intend to withhold tax on distributions.

There can be no assurance that an active market for the trust preferred securities will develop.

        The trust preferred securities constitute a new issue of securities with no established trading market. The trust preferred securities may be held or transferred only in amounts having an aggregate liquidation amount of at least $100,000 (100 trust preferred securities). As a result, the trading market for the trust preferred securities may be less active than markets for securities that may be held or transferred in smaller denominations and the trust preferred securities may be less liquid.

        There can be no assurance that an active market for the trust preferred securities will develop or be sustained, the ability of the holders to sell their trust preferred securities or at what price holders of the trust preferred securities will be able to sell their trust preferred securities. Although Lehman Brothers Inc. has indicated to us that it intends to make a market in the trust preferred securities, as permitted by applicable laws and regulations, it is not obligated to do so and may discontinue any such market-making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the trust preferred securities.

Potential conflicts of interest may exist.

        One of our affiliates acts as calculation agent for the Company Debenture, and determines LIBOR as calculation agent. As a result, potential conflicts of interest may exist between our affiliate and you.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        We have included or incorporated by reference in this prospectus, statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. It is possible that our actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements.

        Information regarding important factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in our most recent Annual Report on Form 10-K, which is incorporated in this prospectus by reference. See "Where You Can Find More Information" in this prospectus for information about how to obtain a copy of this annual report.

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USE OF PROCEEDS

        This prospectus is delivered in connection with the sale of trust preferred securities by Lehman Brothers Inc. in market-making transactions.

RATIOS OF EARNINGS TO FIXED CHARGES

	Year Ended November 30,
Lehman Brothers Holdings, Inc.						Nine Months Ended August 31, 2006
	2001	2002	2003	2004	2005
Ratio of earnings to fixed charges	1.11	1.13	1.29	1.36	1.28	1.22

Lehman Brothers Holdings E-Capital Trust I	Period from August 16, 2005 to December 31, 2005	Six Months Ended June 30, 2006
Ratio of earnings to fixed charges	1.00	1.00

Lehman Brothers Holdings E-Capital LLC I	Period from August 16, 2005 to December 31, 2005	Six Months Ended June 30, 2006
Ratio of earnings to fixed charges	1.04	1.04

        For purposes of calculating these ratios, earnings are the sum of:

•

pre-tax earnings from continuing operations and



•

fixed charges (excluding capitalized interest);

        and fixed charges are the sum of:

•

interest cost, including capitalized interest; and



•

that portion of rent expense estimated to be representative of the interest factor.

ACCOUNTING TREATMENT

        Financial Accounting Standards Board Interpretation No. 46R, "Consolidation of Variable Interest Entities (revised December 2003)—an Interpretation of ARB No. 51" ("FIN 46R") requires us to deconsolidate the trust and the LLC from our financial statements. Accordingly, the Company Debenture will be reflected on our statement of financial condition as "Junior subordinated notes," and interest payments thereon that are distributed by the LLC and the trust will be included as interest expense on our statement of income.

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LEHMAN BROTHERS HOLDINGS INC.

        Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients and high net-worth individuals worldwide. We provide a full array of equities and fixed income sales, trading and research, investment banking services and investment management and advisory services. Our global headquarters in New York and regional headquarters in London and Tokyo are complemented by offices in additional locations in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The Firm, through predecessor entities, was founded in 1850.

        Through our subsidiaries, we are a global market-maker in all major equity and fixed income products. To facilitate our market-making activities, we are a member of all principal securities and commodities exchanges in the United States, as well as NASD, Inc., and we hold memberships or associate memberships on several principal international securities and commodities exchanges, including the London, Tokyo, Hong Kong, Frankfurt, Paris, Milan and Australian stock exchanges.

        Our principal business activities are investment banking, capital markets and investment management. Through our investment banking, trading, research, structuring and distribution capabilities in equity and fixed income products, we continue to build on our customer flow business model, which is based on our principal focus of facilitating client transactions in all major global capital markets products and services. We generate client flow revenues from institutional, corporate, government and high-net-worth clients by (i) advising on and structuring transactions specifically suited to meet client needs; (ii) serving as a market maker and/or intermediary in the global marketplace, including having securities and other financial instrument products available to allow clients to adjust their portfolios and risks across different market cycles; (iii) providing investment management and advisory services; and (iv) acting as an underwriter to clients. As part of our client flow activities, we maintain inventory positions of varying amounts across a broad range of financial instruments. In addition, we also take proprietary trading and investment positions. The financial services industry is significantly influenced by worldwide economic conditions as well as other factors inherent in the global financial markets. As a result, revenues and earnings may vary from quarter to quarter and from year to year. We believe our client flow orientation and the diversity of our business helps to mitigate overall revenue volatility.

Further Information

        More information on Lehman Brothers Holdings Inc., including its financial statements, is available as described under "Where You Can Find More Information."

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LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I

        Lehman Brothers Holdings E-Capital Trust I is a statutory trust formed under the Delaware Statutory Trust Act, as amended, pursuant to a declaration of trust (the "declaration of trust") and the filing of a certificate of trust with the Secretary of State of the State of Delaware. The certificate of trust and the declaration of trust are filed as exhibits to the registration statement of which this prospectus is a part. You can obtain a copy of the declaration of trust by following the directions under "Where You Can Find More Information." The declaration of trust is qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").

        Upon issuance of the trust preferred securities, we acquired trust common securities in an aggregate liquidation amount equal to $1,000. The trust used the proceeds derived from the issuance of all the trust securities to purchase the LLC preferred securities from the LLC and, accordingly, the assets of the trust consist solely of the LLC preferred securities. The trust exists for the exclusive purpose of (i) issuing the trust preferred securities and trust common securities (collectively, the "trust securities") representing undivided beneficial ownership interests in the assets of the trust, (ii) investing the gross proceeds of the trust securities in the LLC preferred securities, and (iii) engaging in only those other activities necessary or incidental thereto.

        Pursuant to the declaration of trust, there are currently seven trustees for the trust. Five of the trustees (the "regular trustees") are individuals who are employees or officers of or who are affiliated with us. The sixth trustee is a financial institution that is unaffiliated with us and is indenture trustee for purposes of compliance with the provisions of the Trust Indenture Act (the "property trustee"). The seventh trustee is an entity that maintains its principal place of business in the State of Delaware (the "Delaware trustee"). Currently, JPMorgan Chase Bank, N.A. acts as property trustee, and its affiliate, Chase Bank USA, National Association, a Delaware corporation, acts as Delaware trustee until, in each case, it is removed or replaced by us as the holder of the trust common securities. For purposes of compliance with the Trust Indenture Act, JPMorgan Chase Bank, N.A. also acts as trustee under the trust guarantee (the "trust guarantee trustee").

        The property trustee holds title to the LLC preferred securities for the benefit of the holders of the trust securities, and, as such holder, the property trustee has the power to exercise all rights, powers and privileges with respect to the LLC preferred securities under the Limited Liability Company Agreement entered into by us, as managing member of the LLC, and the trust (the "LLC Agreement"). In addition, the property trustee maintains exclusive control of a segregated non-interest bearing bank account to hold all payments made in respect of the LLC preferred securities for the benefit of the holders of the trust securities.

        JPMorgan Chase Bank, N.A., as the trust guarantee trustee, holds the trust guarantee for the benefit of the holders of the trust preferred securities.

        We, as the holder of all the trust common securities, have the right to appoint, remove or replace any of the trustees and to increase or decrease the number of trustees, provided that there is always a Delaware trustee, a property trustee and at least one regular trustee. We pay all fees and expenses related to the organization and operation of the trust (including any taxes (other than withholding taxes), duties, assessments or governmental charges of whatever nature imposed by the United States or any other domestic taxing authority upon the trust) and the offering of the trust preferred securities and will be responsible for all debts and obligations of the trust (other than with respect to the trust preferred securities). If the trust is required by law to withhold amounts from distributions in respect of payments on the Affiliate Debt Instruments or Eligible Debt Securities, such withheld amounts will be treated as paid in respect of current or future distributions to the applicable holders. In the event the trust is unable to credit its withholding tax obligations against distributions to such holders, we will reimburse the trust for any liability in respect of withholding taxes.

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        For so long as the trust preferred securities remain outstanding, we have covenanted (i) to maintain direct 100% ownership of the trust common securities, (ii) to cause the trust to remain a statutory trust and not to voluntarily dissolve, except as permitted by the declaration of trust, (iii) to use our commercially reasonable efforts to ensure that the trust will not be an "investment company" that is required to be registered under the Investment Company Act and (iv) to take no action that would be reasonably likely to cause the trust to be classified as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.

        The rights of the holders of the trust preferred securities, including economic rights, rights to information and voting rights, are as set forth in the declaration of trust and the Delaware Statutory Trust Act. See "Description of the Trust Preferred Securities." The declaration of trust and the trust guarantee also incorporate by reference the terms of the Trust Indenture Act.

        The location of the principal executive office of the trust is c/o Lehman Brothers Holdings Inc., 745 Seventh Avenue, New York, NY 10019. The office of the Delaware trustee of the trust is Chase Bank USA, National Association, 500 Stanton Christiana Road, Building 4, 3^rd Floor, Newark, Delaware 19713.

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LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I

        Lehman Brothers Holdings E-Capital LLC I is a limited liability company that was formed under the Delaware Limited Liability Company Act, as amended (the "LLC Act"). Pursuant to the certificate of formation and the LLC Agreement, we are the sole managing member of the LLC. The LLC Agreement is filed as an exhibit to the registration statement of which this prospectus is a part. You can obtain a copy of the LLC Agreement by following the directions under "Where You Can Find More Information."

        Upon the issuance of the LLC preferred securities, which securities represent preferred interests in the LLC, the trust became the sole non-managing member of the LLC. Contemporaneous with the issuance of the LLC preferred securities, we as the managing member contributed capital to the LLC in an amount equal to at least 5% of the total capital of the LLC. The LLC is managed by us as the managing member and exists for the sole purpose of (i) issuing its interests, (ii) investing the proceeds thereof in Affiliate Debt Instruments and Eligible Debt Securities and (iii) engaging in only those other activities necessary or incidental thereto.

        We pay all fees and expenses related to the organization and operation of the LLC (including any taxes (other than withholding taxes), duties, assessments or governmental charges of whatever nature) imposed by the United States or any other domestic taxing authority upon the LLC) and are responsible for all debts and obligations of the LLC (other than with respect to the LLC preferred securities). If the LLC is required by law to withhold amounts from distributions in respect of payments on the Affiliate Debt Instruments or Eligible Debt Securities, such withheld amounts will be treated as paid in respect of current or future distributions to the applicable holders. In the event the LLC is unable to credit its withholding tax obligations against distributions to such holders, we will reimburse the LLC for any liability in respect of withholding taxes.

        For so long as the LLC preferred securities remain outstanding, we have covenanted (i) to remain the sole managing member of the LLC and to maintain direct 100% ownership of the managing member's interest in the LLC, which interest represents at least 5% of the total capital of the LLC, (ii) to cause the LLC to remain a limited liability company and not to voluntarily dissolve, except as permitted by the LLC Agreement, (iii) to use our commercially reasonable efforts to ensure that the LLC will not be an "investment company" for purposes of the Investment Company Act and (iv) to take no action that would be reasonably likely to cause the LLC to be classified as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.

        The rights of the holders of the LLC preferred securities, including economic rights, rights to information and voting rights, are set forth in the LLC Agreement and the LLC Act. See "Description of the LLC Preferred Securities."

        The location of the principal executive offices of the LLC is c/o Lehman Brothers Holdings Inc., 745 Seventh Avenue, New York, New York 10019.

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SELECTED FINANCIAL DATA FOR THE TRUST

        The statement of operations data presented below for the period from August 16, 2005 (date of inception) to December 31, 2005 and the balance sheet data as of December 31, 2005 are derived from the audited consolidated financial statements of the trust included in this prospectus. The statement of operations data presented below for the six months ended June 30, 2006 and the balance sheet data as of June 30, 2006 are derived from the unaudited consolidated financial statements incorporated by reference in this prospectus. The data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of the Trust and the LLC" and the trust's audited and unaudited consolidated financial statements and the notes thereto included or incorporated by reference in this prospectus. In accordance with the guidance under Financial Accounting Standards Board Interpretation No. 46(R), "Consolidation of Variable Interest Entities (revised December 2003)—an Interpretation of ARB No. 51" ("FIN 46(R)"), the trust consolidates the LLC.

	Six Months Ended June 30, 2006		Period from August 16, 2005 to December 31, 2005
	(In thousands)
Consolidated Statement of Income Data:
Interest income	$	8,706	$	5,588
Interest expense		8,346		5,355
Minority interest expense		360		233
Net income	$	0	$	0

	As of June 30, 2006		As of December 31, 2005
	(In thousands)
Consolidated Statement of Financial Condition Data:
Investment in Company Debenture	$	300,001	$	300,001
Commercial paper		16,383		16,023
Interest receivable		2,133		1,759
Total assets	$	318,517	$	317,783
Trust preferred securities	$	300,000	$	300,000
Interest payable		2,133		1,759
Total liabilities	$	302,133	$	301,759
Minority interest		16,383		16,023
Total stockholder's equity		1		1
Total liabilities and stockholder's equity	$	318,517	$	317,783

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SELECTED FINANCIAL DATA FOR THE LLC

        The statement of operations data presented below for the period from August 16, 2005 (date of inception) to December 31, 2005 and the balance sheet data as of December 31, 2005 are derived from the audited financial statements of the LLC included in this prospectus. The statement of operations data presented below for the six months ended June 30, 2006 and the balance sheet data as of June 30, 2006 are derived from the unaudited financial statements incorporated by reference in this prospectus. The data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of the Trust and the LLC" and the LLC's audited and unaudited financial statements and the notes thereto included or incorporated by reference in this prospectus.

	Six Months Ended June 30, 2006		Period from August 16, 2005 to December 31, 2005
	(In thousands)
Statement of Income Data:
Interest income	$	8,706	$	5,588
Interest expense		8,346		5,355
Net income	$	360	$	233

	As of June 30, 2006		As of December 31, 2005
	(In thousands)
Statement of Financial Condition Data:
Investment in Company Debenture	$	300,001	$	300,001
Commercial paper		16,383		16,023
Interest receivable		2,133		1,759
Total assets	$	318,517	$	317,783
LLC preferred securities	$	300,001	$	300,001
Interest payable		2,133		1,759
Total liabilities	$	302,134	$	301,760
Total member's capital		16,383		16,023
Total liabilities and member's capital	$	318,517	$	317,783

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE TRUST AND THE LLC

The following discussion should be read in conjunction with the consolidated financial statements and notes of the trust and the financial statements and notes of the LLC included or incorporated by reference elsewhere in this prospectus.

General

        The trust and the LLC were both formed on August 16, 2005. The trust issued $300 million aggregate liquidation amount of trust preferred securities and $1,000 of trust common securities on August 19, 2005. The trust used the offering proceeds to purchase $300 million aggregate liquidation preference of the LLC preferred securities. Contemporaneous with the issuance of the LLC preferred securities, the LLC also issued to us common securities with an aggregate liquidation preference of $15.8 million, representing 5% of the total initial capital of the LLC. The LLC used the proceeds from the issuance of the LLC preferred and common securities to purchase the Company Debenture in a principal amount of $300 million and certain Eligible Debt Securities.

        In accordance with the guidance under FIN 46(R), the trust consolidates the LLC. We do not consolidate either the trust or the LLC.

        Holders of the trust preferred securities receive distributions of their pro rata portion of any cash payments received by the trust on the LLC preferred securities. Distributions on the LLC preferred securities accumulate from August 19, 2005, the date of original issuance of the old LLC preferred securities, and are payable quarterly in arrears on each February 19, May 19, August 19 and November 19 (or the next succeeding business day, if not a business day), at an annual rate of 3-month LIBOR for the related distribution period plus a margin equal to 0.78% until August 19, 2010 and at an annual rate of 3-month LIBOR plus a margin equal to 1.78% from August 19, 2010 until August 19, 2035, and thereafter as described in this prospectus. The LLC is entitled to receive interest payments on the Company Debenture on the same dates and in the same amounts until its maturity on August 19, 2035. Distributions on the LLC common securities accumulate at an annual rate of 3-month LIBOR for each distribution period plus a margin equal to 2.78% until August 19, 2010 and thereafter at an annual rate of 3-month LIBOR plus a margin equal to 3.78%.

        If earnings on the Company Debenture and the Eligible Debt Securities exceed the aggregate amounts payable on the LLC preferred securities and the LLC common securities at their respective stated distribution rates described above, 50% of such excess will be distributed on the LLC preferred securities and the balance will be distributed on the LLC common securities. Since the interest payable on the Company Debenture is equal to the stated distribution rate on the LLC preferred securities, such additional amounts will be payable on the LLC preferred securities only if the earnings on the Eligible Debt Securities from inception of the LLC exceed the amounts that were accumulated on the LLC common securities at their stated distribution rate from such inception. During the period from inception through June 30, 2006, the earnings on the Eligible Debt Securities did not exceed the amounts that were accumulated on the LLC common securities at their stated distribution rate, and as a result, no such additional amounts were payable on the LLC preferred securities.

Results of Operations and Changes in Cash Flow for the Six Months Ended June 30, 2006

        The trust earned revenues of approximately $8.71 million in interest income on the Company Debenture and Eligible Debt Securities held by the LLC during the six months ended June 30, 2006. The trust had approximately $8.35 million in interest expense on the trust preferred securities and approximately $360,000 in minority interest expense related to the LLC common securities held by us during the six months ended June 30, 2006. Therefore, the trust had no net income for the six months ended June 30, 2006. The LLC earned revenues of approximately $8.71 million in interest income on

22

the Company Debenture and Eligible Debt Securities during the six months ended June 30, 2006. The LLC had approximately $8.35 million in interest expense on the LLC preferred securities during the six months ended June 30, 2006. Therefore, the LLC had net income of approximately $360,000 for the six months ended June 30, 2006, representing the return on our investment in the LLC common securities.

        On February 21 and May 19, 2006, the LLC received its scheduled interest payments on the Company Debenture at annual rates of 5.15% (approximately $3.95 million in the aggregate) and 5.55% (approximately $4.02 million in the aggregate), respectively, and paid the same amounts on the LLC preferred securities to the trust. The holders of the 300,000 trust preferred securities were paid the required quarterly cash distribution at those rates (or $13.16 per trust preferred security on February 21, 2006 and $13.41 per trust preferred security on May 19, 2006). From May 19, 2006 through June 30, 2006, additional interest of $2.13 million was accrued on the Company Debenture at an annual rate of 5.95%. During the six months ended June 30, 2006, approximately $360,000 of income was earned on the Eligible Debt Securities.

Results of Operations and Changes in Cash Flow for the Period from August 16, 2005 (Inception) to December 31, 2005

        The trust earned revenues of approximately $5.59 million in interest income on the Company Debenture and Eligible Debt Securities held by the LLC during the period from inception through December 31, 2005. The trust had approximately $5.36 million in interest expense on the trust preferred securities and approximately $233,000 in minority interest expense related to the LLC common securities held by us during the period from inception through December 31, 2005. Therefore, the trust had no net income for the period from inception through December 31, 2005. The LLC earned revenues of approximately $5.59 million in interest income on the Company Debenture and Eligible Debt Securities during the period from inception through December 31, 2005. The LLC had approximately $5.36 million in interest expense on the LLC preferred securities during the period from inception through December 31, 2005. Therefore, the LLC had net income of approximately $233,000 for that period, representing the return on our investment in the LLC common securities.

        On November 21, 2005, the LLC received its scheduled interest payment on the Company Debenture at an annual rate of 4.59% (approximately $3.6 million in the aggregate) and paid the same amount on the LLC preferred securities to the trust. The holders of the 300,000 old trust preferred securities were paid the required quarterly cash distribution at that rate (or $11.99 per trust preferred security). From November 21, 2005 through December 31, 2005, additional interest of $1.76 million was accrued on the Company Debenture at an annual rate of 5.15%. During the period from inception through December 31, 2005, approximately $233,000 of income was earned on the Eligible Debt Securities.

Liquidity and Capital Resources

        The ability of the trust to pay distributions on the trust preferred securities is entirely dependent on its receipt of corresponding distributions with respect to the LLC preferred securities. The ability of the LLC to pay distributions on the LLC preferred securities is, in turn, dependent on its receipt of payments with respect to the Company Debenture and the Eligible Debt Securities held by the LLC. We have guaranteed, on a subordinated basis, the payment in full of all distributions and other payments on the trust preferred securities to the extent that the trust has funds available therefor. Accordingly, an evaluation of our financial condition is relevant to an evaluation of the financial condition of the Trust and its ability to pay distributions on the trust preferred securities and we refer you to the information about us, including financial statements and other financial information, contained or incorporated by reference in the annual, quarterly and current reports we file with the Commission, which are incorporated herein by reference. See "Where You Can Find More Information."

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DESCRIPTION OF THE TRUST PREFERRED SECURITIES

        The trust preferred securities were issued pursuant to the terms of the declaration of trust. The declaration of trust qualified as an indenture under the Trust Indenture Act. The property trustee acts as trustee for the trust preferred securities under the declaration of trust for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the trust preferred securities include those stated in the declaration of trust and those made part of the declaration of trust by the Trust Indenture Act. The following summary of the material terms and provisions of the trust preferred securities does not purport to be complete and is subject to, and qualified in its entirety by reference to, the declaration of trust, the Delaware Statutory Trust Act and the Trust Indenture Act and other applicable law. The declaration of trust is filed as an exhibit to the registration statement of which this prospectus is a part. You can obtain a copy of the declaration of trust by following the directions under "Where You Can Find More Information."

General

        The declaration of trust authorizes the regular trustees of the trust to issue both common and preferred trust securities, which represent undivided beneficial ownership interests in the assets of the trust. All the trust common securities are owned, directly or indirectly, by us. The trust common securities rank equally, and payments will be made on the trust common securities on a ratable basis, with the trust preferred securities. If an event of default under an Affiliate Debt Instrument occurs and continues, however, the rights of the holders of the common securities to receive payment of periodic distributions and payments upon dissolution or redemption will be subordinated to the rights of the holders of the trust preferred securities. Except as described under "Registration Rights; Additional Interest," in this prospectus, the declaration of trust does not permit the issuance of any other securities or the incurrence of any indebtedness by the trust, nor does it permit the trust to acquire any assets other than the LLC preferred securities. Title to the LLC preferred securities is held by the property trustee for the benefit of the holders of the trust securities.

        The payment of distributions out of money held by the trust, and payments out of money held by the trust upon redemption of the trust preferred securities or dissolution of the trust, are guaranteed by us to the extent described under "Description of the Trust Guarantee." The trust guarantee is held by JPMorgan Chase Bank, N.A., the trust guarantee trustee, for the benefit of the holders of the trust preferred securities. The trust guarantee does not cover payment of distributions when the trust does not have sufficient available funds to pay such distributions. In such event, holders of trust preferred securities will have the remedies described below under "—Trust Enforcement Events."

        The trust preferred securities are issued in fully registered form without coupons. Trust preferred securities are not issued in bearer form. See "—Book-Entry Only Issuance—The Depository Trust Company."

Distributions

General

        Holders of trust preferred securities are entitled to receive cash distributions at such times and in such amounts as the trust receives cash payments from the LLC on the LLC preferred securities or from us on the trust guarantee (or, in the event the LLC has been dissolved, from the assets of the LLC that are distributed to the trust). If and to the extent that the trust receives any such cash payments, the trust will make a distribution of such cash payments on the trust preferred securities. To the extent funds are available, such distributions are payable quarterly in arrears on each February 19, May 19, August 19 and November 19, except as otherwise described below.

        On August 19, 2065, if not earlier, the trust will be dissolved and assets will be distributed as described under "Liquidation Distribution Upon Dissolution."

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Deferral of Distributions

        Distributions on the trust preferred securities will be made to the extent that the trust has funds available for the payment of such distributions. Amounts available to the trust for distribution to the holders of the trust preferred securities will be limited to payments received by the trust from the LLC with respect to the LLC preferred securities or from us on the trust guarantee. Distributions on the LLC preferred securities may be deferred by us in our sole discretion as the managing member of the LLC. In addition, so long as a mandatory deferral described under "Description of the LLC Preferred Securities—Distributions" has occurred and is continuing, distributions on the LLC preferred securities may not be paid other than from the net cash proceeds contributed to the LLC from the issuance and sale of our common stock or our perpetual deferrable preferred stock. If the LLC does not pay distributions on the LLC preferred securities, including out of the net cash proceeds contributed to the LLC from the issuance and sale of our common stock or perpetual deferrable preferred stock, the trust will not have sufficient funds to make distributions on the trust preferred securities, in which event the trust guarantee will not apply to such distributions until the trust has sufficient funds available therefor. See "Description of the LLC Preferred Securities—Distributions" and "Description of the Trust Guarantee."

        Any issuer of any Affiliate Debt Instrument, including us, will be able to, at its option, defer interest payments on its Affiliate Debt Instruments (including the Company Debenture) for up to 20 consecutive quarters, so long as any deferral does not extend beyond the stated maturity date of such Affiliate Debt Instrument. During a deferral period, interest on the Affiliate Debt Instruments would continue to accrue, and, accordingly, distributions otherwise due to you would continue to accumulate. Once such issuer makes all deferred interest payments on the Affiliate Debt Instruments, it can again defer interest payments on the Affiliate Debt Instruments as discussed above. In addition, we, as managing member of the LLC, may fail to pay simple distributions in full on up to an aggregate of 28 payment dates without triggering the right of the Special Representative to require a dissolution of the LLC, and so long as a mandatory deferral event occurs and is continuing, the LLC will be required to defer distributions on the LLC preferred securities to the extent that we cannot sell sufficient common stock or our perpetual deferrable preferred stock to pay such distributions. If the LLC defers distributions, the trust will not make distributions on the trust preferred securities.

        We do not currently intend to defer interest payments on the Company Debenture or any Affiliate Debt Instrument or any distributions on the LLC preferred securities. However, if we defer such interest payments or distributions, we will be subject to certain restrictions relating to the payment of dividends on or purchases of our capital stock and payments on our debt securities that rank equal with or junior to the subordinated Company Debenture as described under "—Certain Covenants of the Company."

Subordination of Certain Distributions in Bankruptcy or Dissolution

        So long as the LLC is in existence and has not been dissolved, in the event of our bankruptcy or dissolution and if a mandatory deferral event has occurred and we are unable to sell our common stock or perpetual deferrable preferred stock for a period continuing for at least two years, any amounts received by the trust in respect of interest on the Affiliate Debt Instruments accrued from that date forward shall be paid by the property trustee directly to the holders of our then outstanding preferred or preference stock, if any, or their representatives, to the extent necessary to pay in full any amounts then payable on such preferred or preference stock remaining unpaid.

Payment of Distributions

        Distributions on the trust preferred securities are payable to holders registered on the relevant record date. Payments on the trust preferred securities while they are represented by a global security will be made in immediately available funds to DTC, the depositary for the trust preferred securities.

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As long as the trust preferred securities are only in book-entry form, the record date for the payment of distributions will be one business day before the distribution date. If the trust preferred securities are ever issued in certificated form, the record date for the payment of distributions will be determined by the regular trustees and will be at least one business day before the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the holders of record of trust preferred securities as they appear on the books and records of the trust on the record date with respect to the payment date for the trust preferred securities that corresponds to the payment date fixed by the LLC with respect to the payment of cumulative distributions on the LLC preferred securities. If any date on which distributions would otherwise be payable is not a New York business day and London business day, each as defined under "Description of LLC Investments—The Company Debenture," then the distribution payment date will be the next succeeding New York and London business day unless such day falls in the next calendar month, in which case the distribution payment date will be the immediately preceding New York and London business day. Distributions will accumulate to the date that distributions are actually paid.

Certain Covenants of the Company

        We have covenanted in the declaration of trust that if (a) full distributions on a compounded basis on any LLC preferred securities or trust preferred securities have not been paid for any distribution period at the Initial Floating Rate until August 19, 2010 and at the Stepped Up Floating Rate thereafter, (b) an event of default or a deferral period occurs and is continuing on any Affiliate Debt Instrument or (c) we are in default of any of our obligations under the trust guarantee, the LLC guarantee or any Investment Guarantee, then, during such period, we will not, nor will we permit any of our subsidiaries to, make certain payments in respect of our capital stock and other securities as described under "Description of the LLC Preferred Securities—Certain Covenants of the Company."

Mandatory Redemption

        As described below under "Description of the LLC Preferred Securities—Redemption," the LLC preferred securities may be redeemed by the LLC at our option as the managing member of the LLC, in whole or in part at any time on or after August 19, 2010, or all of the LLC preferred securities may be redeemed at any time upon the occurrence of a Special Event, or as required at any time as a result of a redemption of the Company Debenture or other Affiliate Debt Instrument, at an amount per LLC preferred security equal to $1,000 plus accumulated and unpaid distributions (on a compounded basis), to the extent that funds are available to the LLC. If available amounts are less than $1,000 plus accumulated and unpaid distributions on a compounded basis, such amounts will be allocated to the LLC preferred securities. Upon the repayment of the LLC preferred securities upon any such redemption, the proceeds from such repayment will simultaneously be applied to redeem trust securities having an aggregate liquidation amount equal to the aggregate liquidation preference of the LLC preferred securities so repaid, at an amount per trust security equal to the amount received in respect of each of the redeemed LLC preferred securities. Holders of the trust securities will be given not less than 30 nor more than 60 days' notice of any such redemption.

Procedures

        If the trust gives a notice of redemption in respect of trust preferred securities (which notice will be irrevocable), and if we have paid to the property trustee a sufficient amount of cash in connection with the related redemption of the LLC preferred securities, then, by 12:00 noon, New York time, on the redemption date, the trust will irrevocably deposit with DTC funds sufficient to pay the amount payable on redemption of all book-entry certificates and will give DTC irrevocable instructions and authority to pay such amount to holders of the trust preferred securities. See "—Book-Entry Only Issuance—The Depository Trust Company." If notice of redemption has been given and funds are deposited as required, then upon the date of such deposit, all rights of holders of the trust preferred

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securities so called for redemption will cease, except the right of the holders of such trust preferred securities to receive the redemption price, but without interest on the redemption price. In the event that payment of the redemption price in respect of trust preferred securities is improperly withheld or refused and not paid either by the trust or by us pursuant to the trust guarantee described under "Description of the Trust Guarantee," distributions on such trust preferred securities will continue to be made as cash payments are received from the LLC.

        If fewer than all the trust preferred securities and trust common securities are redeemed, the aggregate liquidation amount of trust securities to be redeemed will be allocated proportionately among the trust preferred securities and trust common securities, subject to the exceptions described under "—Subordination of Trust Common Securities."

        If fewer than all of the outstanding trust preferred securities are to be redeemed, the trust preferred securities will be redeemed in accordance with the procedures of DTC. See "—Book-Entry Only Issuance—The Depository Trust Company."

        The trust is not required to register or cause to be registered the transfer of trust preferred securities after such trust preferred securities have been called for redemption.

Other Purchases

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

Liquidation Distribution Upon Dissolution

        Pursuant to the declaration of trust, the trust will dissolve upon the earliest of (i) our bankruptcy, (ii) the filing of a certificate of dissolution or the equivalent with respect to us or the revocation of our charter and the expiration of 90 days after the date of revocation without a reinstatement thereof, (iii) the filing by us of a certificate of cancellation with respect to the trust after having obtained the consent of at least a majority in liquidation amount of the trust securities, voting together as a single class, to file such certificate of cancellation, (iv) the entry of a decree of a judicial dissolution of us or the trust, (v) the redemption of all the trust securities, (vi) upon the election of the regular trustees following the occurrence and continuation of a Special Event, provided that the LLC will be dissolved and the assets of the LLC shall have been distributed to the holders of the trust securities in exchange for the trust securities or (vii) on August 19, 2065.

        In the event of any voluntary or involuntary dissolution of the trust, the then holders of the trust preferred securities will be entitled to receive out of the assets of the trust, after satisfaction of liabilities to creditors, distributions in cash or other immediately available funds of the trust or including distributions of the trust's assets, their pro rata share of an amount equal to $1,000 plus all accumulated and unpaid distributions (on a compounded basis) or such lesser amount as is available upon any such dissolution (the "trust liquidation amount").

        The holders of the trust preferred securities will be entitled to receive the trust liquidation amount pro rata with the holders of the trust common securities, except in the limited circumstances described below under "—Subordination of Trust Common Securities."

Subordination of Trust Common Securities

        Distributions and payment of amounts upon dissolution and redemption of the trust securities shall be made pro rata based on the liquidation amount of the trust securities, provided that if an event of default occurs and is continuing on any Affiliate Debt Instrument, the holders of the trust preferred securities will have a preference over the holders of the trust common securities with respect to payments upon dissolution of the trust or redemption of the trust securities.

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Payment of Trust Expenses

        Since the trust is being formed solely to facilitate a direct investment in the LLC preferred securities, we as the sponsor of the trust will pay all expenses of the trust, including taxes (other than withholding taxes except to the extent otherwise described in this prospectus), duties, assessments or governmental charges imposed on the trust so that the net amounts received and retained by the trust and the property trustee after the payment of such expenses is equal to the amounts the trust and the property trustee would have received had no such costs or expenses been incurred by or imposed. We will be liable for and will pay all such expenses solely out of our own funds.

Trust Enforcement Events

        The occurrence, at any time, of (i) a default by us in respect of any of our obligations under the trust guarantee, (ii) a LLC Enforcement Event under the LLC Agreement or (iii) an event of default under any Affiliate Debt Instrument or a default under any Investment Guarantee will constitute an enforcement event under the declaration of trust with respect to the trust securities (a "Trust Enforcement Event"). See "Description of the LLC Preferred Securities—LLC Enforcement Events" for a description of the events that will trigger the occurrence of a LLC Enforcement Event.

        Upon the occurrence of a Trust Enforcement Event, (a) the property trustee, as the holder of the LLC preferred securities, will have the right to enforce the terms of the LLC preferred securities, including its rights Special Representative to enforce (i) the LLC's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees, (ii) the LLC's rights against us under the LLC Agreement (including with respect to our obligation to use commercially reasonable efforts to sell our common stock or perpetual preferred stock and contribute the proceeds to the LLC, and our obligation not to pay dividends on or make certain other payments with respect to our capital stock under certain circumstances) and (iii) the rights of the holders of the LLC preferred securities to receive distributions (only if and to the extent not deferred by the managing member at its discretion or during a mandatory deferral period) on the LLC preferred securities, and (b) the trust guarantee trustee will have the right to enforce the terms of the trust guarantee.

        In addition, if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, then the property trustee, as the holder of the LLC preferred securities, will have the right to dissolve the LLC and enforce the trust's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees distributed to it in such dissolution.

        If the property trustee fails to enforce its rights on behalf of the trust under the LLC preferred securities or, in the event the LLC has been dissolved, to enforce its rights on behalf of the trust under the Affiliate Debt Instruments (including the Company Debenture) and Investment Guarantees after a holder of trust preferred securities has made a written request, such holder of record of trust preferred securities may directly institute a legal proceeding against the LLC and the Special Representative or against any issuer of any Affiliate Debt Instrument or us (as guarantor), as the case may be, to enforce the property trustee's rights under the LLC preferred securities, the Affiliate Debt Instruments or any Investment Guarantee, as the case may be, without first instituting any legal proceeding against the property trustee, the trust or any other person or entity. In addition, for so long as the trust holds any LLC preferred securities, if the Special Representative fails to enforce its rights on behalf of the LLC under the Affiliate Debt Instruments or any Investment Guarantee after a holder of trust preferred securities has made a written request, a holder of record of trust preferred securities may on behalf of the LLC directly institute a legal proceeding against any issuer under the Affiliate Debt Instruments or us, without first instituting any legal proceeding against the property trustee, the trust, the Special Representative or the LLC. In any event, for so long as the trust is the holder of any LLC preferred securities or any Affiliate Debt Instrument or Investment Guarantee, if any issuer of Affiliate Debt Instruments has failed to make any required payment when due on any Affiliate Debt Instruments or

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we have failed to make any required payment when due on any Investment Guarantee, then a holder of trust preferred securities may on behalf of the LLC or the trust, as the case may be, directly institute a proceeding against such issuer with respect to such Affiliate Debt Instrument or against us with respect to any such Investment Guarantee, in each case for enforcement of payment.

        Pursuant to the declaration of trust, we as the holder of the trust common securities will be deemed to have waived any Trust Enforcement Event with respect to the trust common securities until all Trust Enforcement Events with respect to the trust preferred securities have been cured, waived or otherwise eliminated. Until such Trust Enforcement Events with respect to the trust preferred securities have been cured, waived or otherwise eliminated, the property trustee will be deemed to be acting solely on behalf of the holders of the trust preferred securities and only the holders of the trust preferred securities will have the right to direct the property trustee with respect to certain matters under the declaration of trust and, therefore, the Special Representative with respect to certain matters under the LLC Agreement.

        The holders of a majority in liquidation amount of the trust preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the property trustee, or direct the exercise of any trust or power conferred upon the property trustee under the declaration of trust, including the right to direct the property trustee, as holder of the LLC preferred securities, to (i) exercise the remedies available to it under the LLC Agreement as a holder of the LLC preferred securities, including directing it as the Special Representative to exercise its rights in the manner described above, (ii) consent to any amendment, modification, or termination of the LLC Agreement or the LLC preferred securities where such consent is required and (iii) waive any LLC Enforcement Event and its consequences that is waivable under the LLC Agreement, provided that where a consent or action under the LLC Agreement would require the consent or act of the holders of more than a simple majority of the aggregate liquidation amount of LLC preferred securities affected thereby, only the holders of the percentage of the aggregate stated liquidation amount of the trust preferred securities that is at least equal to the percentage of LLC preferred securities holders required under the LLC Agreement may direct the property trustee to give such consent or take such action on behalf of the trust. See "Description of the LLC Preferred Securities—Voting Rights." A waiver of a LLC Enforcement Event with respect to the LLC preferred securities held by the property trustee will constitute a waiver of the corresponding Trust Enforcement Event.

        The property trustee will notify all holders of the trust preferred securities of any notice of any LLC Enforcement Event received from the managing member with respect to the LLC preferred securities and the Affiliate Debt Instruments. Such notice will state that such LLC Enforcement Event also constitutes a Trust Enforcement Event.

        We and the trust are each required to file annually with the property trustee an officer's certificate as to its compliance with all conditions and covenants under the declaration of trust.

Modification

        The declaration of trust may be modified and amended if approved by a majority of the regular trustees (and in certain circumstances the property trustee and the Delaware trustee), provided that if any proposed amendment provides for, or the regular trustees otherwise propose to effect, (i) any action that would adversely affect the rights, preferences or privileges of the trust securities, whether by way of amendment to the declaration of trust or otherwise, or (ii) the dissolution of the trust other than pursuant to the terms of the declaration of trust, then the holders of the trust securities voting together as a single class will be entitled to vote on such amendment or proposal and such amendment or proposal will not be effective except with the approval of at least a majority in liquidation amount of the trust securities affected thereby. If any amendment or proposal referred to in clause (i) above would adversely affect only the trust preferred securities or the trust common securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal

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will not be effective except with the approval of a majority in liquidation amount of such class of trust securities.

        Notwithstanding the preceding paragraph, the declaration of trust may be amended without the consent of the holders of the trust securities to (i) cure any ambiguity or to correct or supplement any provision in the declaration of trust that may be defective or inconsistent with any other provision of the declaration of trust or the LLC Agreement, (ii) add to our covenants, restrictions or obligations of the sponsor of the trust, (iii) comply with the requirements of the Commission in order to effect or maintain qualification of the declaration of trust under the Trust Indenture Act or to ensure that the trust is not required to register as an investment company under the Investment Company Act, (iv) modify, eliminate and add to any provision of the declaration of trust to such extent as may be necessary or desirable, provided that such modification, elimination or addition shall not have a material adverse effect on the rights, preferences or privileges of the holders of the trust securities.

        Notwithstanding the foregoing, no amendment or modification may be made to the declaration of trust if such amendment or modification would (i) cause the trust to fail to be classified as a grantor trust for United States federal income tax purposes, (ii) cause the LLC to be classified as an association or publicly traded partnership taxable as a corporation for such purposes, (iii) reduce or otherwise adversely affect the powers of the property trustee in contravention of the Trust Indenture Act or (iv) cause the trust or the LLC to be deemed an "investment company" that is required to be registered under the Investment Company Act.

Voting Rights and Procedures

        Except as described above under "—Modification" and "—Trust Enforcement Events" and under "Description of the Trust Guarantee—Amendments and Assignment," and as otherwise required by the Trust Indenture Act and other applicable law, the holders of the trust preferred securities have no voting rights. Holders of the trust preferred securities have no rights to appoint or remove the trustees, including the property trustee, who may be appointed, removed or replaced solely by us, as the holder of all of the trust common securities.

        Any required approval or direction of holders of trust preferred securities may be given at a separate meeting of holders of trust preferred securities convened for such purpose, at a meeting of all of the holders of trust securities or pursuant to written consent. The regular trustees will cause a notice of any meeting at which holders of trust preferred securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of trust preferred securities. Each such notice will include a statement setting forth the following information: (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents.

        No vote or consent of the holders of trust preferred securities will be required for the trust to redeem and cancel trust preferred securities in accordance with the declaration of trust.

        Notwithstanding that holders of trust preferred securities are entitled to vote or consent under any of the circumstances described above, any of the trust preferred securities that are owned at such time by us or any entity directly or indirectly controlled by, or under direct or indirect common control with, us will not be entitled to vote or consent and such trust preferred securities will, for purposes of such vote or consent, be treated as if they were not outstanding, provided that persons (other than our affiliates) to whom we or any of our subsidiaries have pledged trust preferred securities may vote or consent with respect to such pledged trust preferred securities under any of the circumstances described in this prospectus.

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        The procedures by which holders of trust preferred securities represented by the global securities may exercise their voting rights are described below. See "—Book-Entry Only Issuance—The Depository Trust Company."

Merger, Consolidation or Amalgamation of the Trust

        The trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any corporation or other entity, except as described below. The trust may, with the consent of a majority of the regular trustees and without the consent of the holders of the trust securities, the property trustee or the Delaware trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State of the United States, provided that (i) if the trust is not the survivor, the successor entity either (x) expressly assumes all of the obligations of the trust under the trust securities or (y) substitutes for the trust preferred securities other securities having substantially the same terms as the trust preferred securities, so long as the successor securities rank the same as the trust securities rank with respect to distributions, assets and payments, (ii) we expressly acknowledge a trustee of such successor entity possessing the same powers and duties as the property trustee as the holder of the LLC preferred securities, (iii) the trust preferred securities or any successor securities are listed, or any successor securities will be listed upon notification of issuance, on any national securities exchange or with another organization on which the trust preferred securities are then listed or quoted, (iv) such merger, consolidation, amalgamation or replacement does not cause the trust preferred securities (including any successor securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the trust preferred securities (including any successor securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), (vi) such successor entity has a purpose substantially identical to that of the trust, (vii) we guarantee the obligations of the successor entity under the successor securities at least to the extent provided by the trust guarantee, (viii) prior to such merger, consolidation, amalgamation or replacement, we have received an opinion of a nationally recognized independent counsel to the trust experienced in such matters to the effect that: (A) such merger, consolidation, amalgamation or replacement will not adversely affect the rights, preferences and privileges of the holders of the trust preferred securities (including any successor securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), (B) following such merger, consolidation, amalgamation or replacement, neither the trust (or the successor entity) nor the LLC will be required to register as an investment company under the Investment Company Act and (C) following such merger, consolidation, amalgamation or replacement, neither the trust (or such successor entity) nor the LLC will be treated as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes. Notwithstanding the foregoing, the trust will not, except with the consent of holders of 100% in liquidation amount of the trust preferred securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if such consolidation, amalgamation, merger or replacement would cause the trust or the successor entity to be classified as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.

Book-Entry Only Issuance—The Depository Trust Company

        The trust preferred securities are held in fully registered form and are not transferrable in amounts of less than $100,000 aggregate liquidation amount and the trust preferred securities must at all times be held in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof.

        The Depository Trust Company ("DTC") acts as securities depository (the "Depository") for the trust preferred securities. The trust preferred securities are issued only as fully registered securities registered in the name of Cede & Co., DTC's nominee. One or more fully registered global securities,

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representing the total aggregate number of trust preferred securities, were issued and deposited with DTC.

        DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its Participants and by the New York Stock Exchange, the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Commission.

        Purchases of trust preferred securities within the DTC system must be made by or through Participants, which will receive a credit for the trust preferred securities on DTC's records. The ownership interest of each actual purchaser of trust preferred securities ("beneficial owner") is in turn to be recorded on the Participants' and Indirect Participants' records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Participants or Indirect Participants through which the beneficial owners purchased trust preferred securities. Transfers of ownership interests in the trust preferred securities are to be accomplished by entries made on the books of Participants and Indirect Participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in trust preferred securities, except in the event that use of the book-entry system for the trust preferred securities is discontinued.

        DTC has no knowledge of the actual beneficial owners of the trust preferred securities; DTC's records reflect only the identity of the Participants to whose accounts such trust preferred securities are credited, which may or may not be the beneficial owners. The Participants and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

        So long as DTC, or its nominee, is the registered owner or holder of a global security, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the trust preferred securities represented thereby for all purposes under the declaration of trust and the trust preferred securities. No beneficial owner of an interest in a global security will be able to transfer that interest except in accordance with DTC's applicable procedures, in addition to those provided for under the declaration of trust.

        DTC has advised us that it will take any action permitted to be taken by a holder of trust preferred securities (including the presentation of trust preferred securities for exchange as described below) only at the direction of one or more Participants to whose account the DTC interests in the global securities are credited and only in respect of such portion of the aggregate liquidation amount of trust preferred securities as to which such Participant or Participants has or have given such direction. However, if there is a Trust Enforcement Event under the trust preferred securities, DTC may exchange the global securities for certificated securities, which it will distribute to its Participants in accordance with its customary procedures.

        Conveyance of notices and other communications by DTC to Participants, by Participants to Indirect Participants, and by Participants and Indirect Participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

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        Redemption notices in respect of the trust preferred securities held in book-entry form will be sent to Cede & Co. If less than all of the trust preferred securities are being redeemed, DTC will determine the amount of the interest of each Participant to be redeemed in accordance with its procedures.

        Although voting with respect to the trust preferred securities is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to trust preferred securities. Under its usual procedures, DTC would mail an Omnibus Proxy to the trust as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Participants to whose accounts the trust preferred securities are allocated on the record date (identified in a listing attached to the Omnibus Proxy).

        Distributions on the trust preferred securities held in book-entry form will be made to DTC in immediately available funds. DTC's practice is to credit Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Participants and Indirect Participants to beneficial owners will be governed by standing instructions and customary practices and will be the responsibility of such Participants and Indirect Participants and not of DTC, the trust or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of any distributions to DTC is the responsibility of the trust, disbursement of such payments to Participants is the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of Participants and Indirect Participants.

        Except as provided in this prospectus, a beneficial owner of an interest in a global security will not be entitled to receive physical delivery of trust preferred securities. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the trust preferred securities.

        Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the global securities among Participants of DTC, DTC is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trust will have any responsibility for the performance by DTC or its Participants or Indirect Participants under the rules and procedures governing DTC. DTC may discontinue providing its services as securities depository with respect to the trust preferred securities at any time by giving notice to the trust. Under such circumstances, in the event that a successor securities depository is not obtained, trust preferred security certificates are required to be printed and delivered to the property trustee. Additionally, the trust (with our consent) may decide to discontinue use of the system of book-entry transfers through DTC or any successor depository. In that event, certificates for the trust preferred securities will be printed and delivered to the property trustee. In each of the above circumstances, we will appoint a paying agent with respect to the trust preferred securities.

        The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in the global trust preferred securities as represented by a global security.

Clearstream and Euroclear

        Links have been established among DTC, Clearstream Banking S.A., Luxembourg ("Clearstream Banking SA") and Euroclear Bank ("Euroclear") (two international clearing systems that perform functions similar to those that DTC performs in the U.S.), to facilitate the cross-market transfers of book-entry securities associated with secondary market trading.

        Although DTC, Clearstream Banking SA and Euroclear have agreed to the procedures provided below in order to facilitate transfers, they are under no obligation to perform such procedures, and the procedures may be modified or discontinued at any time.

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        Clearstream Banking SA and Euroclear will record the ownership interests of their participants in much the same way as DTC, and DTC will record the aggregate ownership of each of the U.S. agents of Clearstream Banking SA and Euroclear, as participants in DTC.

        When book-entry securities are to be transferred from the account of a DTC participant to the account of a Clearstream Banking SA participant or a Euroclear participant, the purchaser must send instructions to Clearstream Banking SA or Euroclear through a participant at least one business day prior to settlement. Clearstream Banking SA or Euroclear, as the case may be, will instruct its U.S. agent to receive book-entry securities against payment. After settlement, Clearstream Banking SA or Euroclear will credit its participant's account. Credit for the book-entry securities will appear on the next day (European time).

        Because settlement is taking place during New York business hours, DTC participants can employ their usual procedures for sending book-entry securities to the relevant U.S. agent acting for the benefit of Clearstream Banking SA or Euroclear participants. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC participant, a cross-market transaction will settle no differently than a trade between two DTC participants.

        When a Clearstream Banking SA or Euroclear participant wishes to transfer book-entry securities to a DTC participant, the seller must send instructions to Clearstream Banking SA or Euroclear through a participant at least one business day prior to settlement. In these cases, Clearstream Banking SA or Euroclear will instruct its U.S. agent to transfer the book-entry securities against payment. The payment will then be reflected in the account of the Clearstream Banking SA or Euroclear participant the following day, with the proceeds back-valued to the value date (which would be the preceding day, when settlement occurs in New York). If settlement is not completed on the intended value date (i.e., the trade fails), proceeds credited to the Clearstream Banking SA or Euroclear participant's account would instead be valued as of the actual settlement date.

Payment

        Payments in respect of the trust preferred securities represented by the global securities are made to DTC, which shall credit the relevant accounts at DTC on the payment dates or, in the case of certificated securities, if any, such payments will be made by check mailed to the address of the holder entitled thereto as such address shall appear on the register. The paying agent is permitted to resign as paying agent upon 30 days' written notice to the regular trustees. In the event that the property trustee shall no longer be the paying agent, the regular trustees will appoint a successor to act as paying agent (which must be a bank or trust company).

Registrar, Transfer Agent, and Paying Agent

        The property trustee acts as registrar, transfer agent and paying agent for the trust preferred securities.

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

Information Concerning the Property Trustee

        The property trustee, prior to the occurrence of a default with respect to the trust securities, undertakes to perform only such duties as are specifically set forth in the declaration of trust and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the property trustee is under no obligation to exercise any of the powers vested in it by the declaration of trust at the request of any holder of trust preferred

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securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The holders of trust preferred securities will not be required to offer such indemnity in the event such holders, by exercising their voting rights, direct the property trustee to take any action following a Trust Enforcement Event.

        The property trustee also acts as property trustee for $1.225 billion aggregate principal amount of junior subordinated notes related to the trust preferred securities of four other Delaware statutory trusts wholly owned by us, to which the trust preferred securities offered by this prospectus are effectively subordinated.

Certain Business Relationships with Trustees

        We and certain of our subsidiaries maintain bank accounts, borrow money and have other commercial banking, investment banking and other business relationships with the property trustee and the Delaware trustee and their affiliates in the ordinary course of business. The trustees or their affiliates may participate as underwriters, agents or dealers in any offering of trust preferred securities.

Governing Law

        The declaration of trust and the trust preferred securities are governed by, and construed in accordance with, the internal laws of the State of Delaware.

Miscellaneous

        The regular trustees are authorized and directed to conduct the affairs of and to operate the trust in such a way that the trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act or characterized as other than a grantor trust for United States federal income tax purposes. In this connection, the regular trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust or the declaration of trust that the regular trustees determine in their discretion to be necessary or desirable for such purposes as long as such action does not materially adversely affect the interests of the holders of the trust preferred securities.

        Holders of the trust preferred securities have no preemptive rights.

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DESCRIPTION OF THE TRUST GUARANTEE

        Set forth below is a summary of information concerning the trust guarantee executed and delivered by us for the benefit of the holders from time to time of trust preferred securities. The summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the trust guarantee. The trust guarantee is filed as an exhibit to the registration statement of which this prospectus is a part. You can obtain a copy of the trust guarantee by following the directions under "Where You Can Find More Information." The trust guarantee incorporates by reference the terms of, and is qualified as an indenture under, the Trust Indenture Act. JPMorgan Chase Bank, N.A, as the trust guarantee trustee, holds the trust guarantee for the benefit of the holders of the trust preferred securities and acts as indenture trustee for the purposes of compliance with the Trust Indenture Act.

General

        Pursuant to the trust guarantee, we have irrevocably agreed, on a subordinated basis and to the extent set forth therein, to pay in full to the holders of the trust preferred securities (except to the extent paid by the trust), as and when due, regardless of any defense, right of set off or counterclaim that the trust may have or assert, the following payments, without duplication: (i) any accumulated and unpaid distributions on the trust preferred securities, to the extent the trust has funds available therefor, (ii) the redemption price with respect to any trust preferred securities called for redemption by the trust, to the extent the trust has funds available therefor, and (iii) upon a voluntary or involuntary dissolution of the trust (other than in connection with the redemption of all of the trust preferred securities), the lesser of (a) the aggregate of the liquidation amount and all accumulated and unpaid distributions on the trust securities to the date of payment and (b) the amount of assets of the trust remaining available for distribution to holders of trust securities upon the dissolution of the trust. Our obligation to make any payment under the trust guarantee may be satisfied by direct payment of the required amounts by us to the holders of trust preferred securities or by causing the trust to pay such amounts to such holders.

        The trust guarantee is a guarantee on a subordinated basis with respect to the trust preferred securities from the time of issuance of the trust preferred securities but only applies to any payment of distributions or redemption price, or to payments upon the dissolution of the trust, to the extent the trust has funds available therefor. If the LLC fails to pay distributions on LLC preferred securities, the trust would lack available funds for the payment of distributions or amounts payable on redemption of the trust preferred securities or otherwise, and in such event holders of the trust preferred securities would not be able to rely upon the trust guarantee for payment of such amounts. Instead, holders of the trust preferred securities will have the remedies described in this prospectus under "Description of the Trust Preferred Securities—Trust Enforcement Events."

        The trust guarantee does not apply to current distributions by the LLC unless and until such distributions are paid by the managing member out of funds of the LLC legally available for payment or to liquidating distributions unless there are assets available for payment in the LLC, each as more fully described under "Risk Factors—Distributions by the LLC may be deferred in our discretion and, in such case, holders will be required to recognize income for U.S. federal income tax purposes in advance of the receipt of cash attributable to such income."

Events of Default; Enforcement of Trust Guarantee

        An event of default under the trust guarantee will occur upon our failure to perform any of our payment or other obligations thereunder. The trust guarantee will constitute a guarantee of payment and not of collection (that is, the guaranteed party may directly institute a legal proceeding against us

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to enforce its rights under the trust guarantee without instituting a legal proceeding against any other person or entity).

        The holders of a majority in liquidation amount of the trust preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trust guarantee trustee or to direct the exercise of any trust or power conferred upon the trust guarantee trustee under the trust guarantee. If the trust guarantee trustee fails to enforce its rights under the trust guarantee after a holder of trust preferred securities has made a written request, such holder may institute a legal proceeding directly against us to enforce the trust guarantee trustee's rights under the trust guarantee, without first instituting a legal proceeding against the trust, the trust guarantee trustee or any other person or entity. In any event, if we have failed to make a guarantee payment under the trust guarantee, a holder of trust preferred securities may directly institute a proceeding in such holder's own name against us for enforcement of the trust guarantee for such payment.

        We, as guarantor, are required to file annually with the trust guarantee trustee a certificate as to whether or not we are in compliance with all the conditions and covenants applicable to us under the guarantee.

Subordination

        The trust guarantee constitutes an unsecured obligation of ours. The trust guarantee ranks subordinate and junior to all other liabilities of ours and ranks pari passu with the most senior preferred stock issued from time to time by us and with any guarantee now or hereafter entered into by us in respect of such preferred stock or preference stock of any affiliate of ours and senior to our common stock. The terms of the trust preferred securities provide that each holder of trust preferred securities by acceptance thereof agrees to the subordination provisions and other terms of the trust guarantee.

Amendments and Assignment

        Except with respect to any changes that do not materially adversely affect the rights of holders of trust preferred securities (in which case no vote will be required), the trust guarantee may be amended only with the prior approval of the holders of at least a majority in liquidation amount of all the outstanding trust preferred securities. The manner of obtaining any such approval of holders of the trust preferred securities will be as set forth above under "Description of the Trust Preferred Securities—Voting Rights."

        All guarantees and agreements contained in the trust guarantee shall bind our successors, assigns, receivers, trustees and representatives and shall inure to the benefit of the holders of the trust preferred securities then outstanding. Except in connection with any permitted merger or consolidation of us with or into another entity or any permitted sale, transfer or lease of our assets to another entity as described below under "Description of the LLC Investments—The Company Debenture—Limitations on Mergers and Sales of Assets," we may not assign our rights or delegate our obligations under the trust guarantee without the prior approval of the holders of at least a majority of the aggregate stated liquidation amount of the trust preferred securities then outstanding.

Termination of the Trust Guarantee

        The trust guarantee will terminate as to each holder of trust preferred securities upon (i) full payment of the redemption price of all trust preferred securities or (ii) full payment of the amounts payable in accordance with the declaration of trust upon dissolution of the trust. The trust guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of trust preferred securities must restore payment of any sum paid under such trust preferred securities or such trust guarantee.

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Information Concerning the Trust Guarantee Trustee

        The trust guarantee trustee, prior to the occurrence of a default with respect to the trust guarantee, undertakes to perform only such duties as are specifically set forth in the trust guarantee and, after default with respect to the trust guarantee, shall exercise the same degree of care as a prudent man would exercise in the conduct of his own affairs. Subject to such provision, the trust guarantee trustee is under no obligation to exercise any of the powers vested in it by the trust guarantee at the request of any holder of trust preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. The holders of trust preferred securities will not be required to offer such indemnity in the event such holders, by exercising their voting rights, direct the trust guarantee trustee to take any action following a default with respect to the trust guarantee.

Certain Business Relationships with Trust Guarantee Trustee

        We and certain of our subsidiaries maintain bank accounts, borrow money and have other commercial banking, investment banking and other business relationships with the trust guarantee trustee and its affiliates in the ordinary course of business. The trust guarantee trustee or its affiliates may participate as underwriters, agents or dealers in any offering of trust preferred securities.

Governing Law

        The trust guarantee is governed by, and construed in accordance with, the laws of the State of New York.

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DESCRIPTION OF THE LLC PREFERRED SECURITIES

        The LLC preferred securities were issued pursuant to the terms of the LLC Agreement. The following summary of the material terms and provisions of the LLC preferred securities does not purport to be complete and is subject to, and qualified in its entirety by reference to, the LLC Agreement, the Delaware Limited Liability Company Act (the "LLC Act") and other applicable law. The LLC Agreement is filed as an exhibit to the registration statement of which this prospectus is a part. You can obtain a copy of the LLC Agreement by following the directions under "Where You Can Find More Information."

General

        The LLC Agreement authorizes and creates the issuance of the LLC interests, which are comprised of LLC common interests (the "LLC common securities") and LLC preferred interests. Except as otherwise described in this prospectus or provided in the LLC Agreement, the LLC Agreement does not permit the issuance of any additional interests, or the incurrence of any indebtedness by the LLC. All of the LLC common securities is owned directly by us. We are the sole managing member of the LLC, subject to the limited rights of the Special Representative described under "—LLC Enforcement Events." Title to the LLC preferred securities is held by the property trustee for the benefit of the holders of the trust securities. The interests represented by the LLC preferred securities have a preference with respect to distributions and amounts payable on redemption or dissolution over the LLC common securities held by the managing member. The LLC Agreement does not permit the LLC to acquire any assets other than the Affiliate Debt Instruments and Eligible Debt Securities. See "Description of the LLC Investments" for a discussion of the terms of these investments, including the Company Debenture.

        The payment of distributions out of money held by the LLC, and payments out of money held by the LLC upon redemption of the LLC preferred securities or dissolution of the LLC, are guaranteed by us to the extent described under "Description of the LLC Guarantee." The LLC guarantee is held by JPMorgan Chase Bank, N.A., as LLC guarantee trustee for the benefit of the holders of the LLC preferred securities. The LLC guarantee does not cover payment of distributions when the LLC does not have sufficient available funds to pay such distributions. In such event, holders of LLC preferred securities will have the remedies described below under "—LLC Enforcement Events."

Distributions

General

        Distributions on the LLC preferred securities are made prior to distributions on LLC common securities, but only to the extent that the LLC has assets legally available for the payment of such distributions. Any distributions from the LLC will be made out of assets of the LLC legally available for payment first to holders of LLC preferred securities in an amount equal to the stated distribution rate, on a quarterly compounded basis, second to the managing member with respect to the LLC common securities in an amount equal to the stated distribution rate plus 2.0% per annum on a quarterly compounded basis, and third, 50% to holders of LLC preferred securities and 50% to the managing member.

        The "stated distribution rate" is a per annum rate equal to the Initial Floating Rate until August 19, 2010 and a per annum rate equal to the Stepped Up Floating Rate thereafter, to the extent such amount is payable out of income received by the LLC from the Company Debenture and other Affiliate Debt Instruments and the Eligible Debt Securities in which the LLC has invested from time to time. See "Description of the LLC Investments." After maturity of the Company Debenture on August 19, 2035, the stated distribution rate may be less than the Stepped Up Floating Rate if the LLC reinvests the proceeds it receives in respect of the Company Debenture in other Affiliate Debt

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Instruments or Eligible Debt Securities that do not generate income equal to at least such rate. To the extent that the LLC reinvests in Affiliate Debt Instruments and Eligible Debt Securities that do not generate income in an amount equal to at least the Stepped Up Floating Rate, the trust will only be entitled to receive distributions in that lower amount of income available to the LLC. In this event, because the trust would be unable to pay full distributions at the Stepped Up Floating Rate, we would not, nor would we permit any of our subsidiaries to, make certain payments in respect of our capital stock and other securities as described under "Description of the LLC Agreement—Certain Covenants of the Company." If, on the other hand, the LLC reinvests such amounts in Affiliate Debt Instruments or Eligible Debt Securities that generate a return of more than the Stepped Up Floating Rate, the trust will be entitled to receive 50% of any excess amounts after we, as the holder of the LLC common securities, have received full distributions on the LLC common securities equal to the stated distribution rate plus 2.0% per annum, on a quarterly compounded basis.

        Distributions on the LLC preferred securities accumulate from the date of inception of the LLC at the stated distribution rate on the LLC preferred securities and are payable quarterly in arrears on February 19, May 19, August 19 and November 19, if, as and when the LLC has funds available for payment, except as otherwise described below. Distributions not paid on any payment date will accumulate on a quarterly compounded basis at the then applicable stated distribution rate. If any date on which distributions would otherwise be payable is not a New York and London business day, then the distribution payment date will be the next succeeding New York and London business day unless such day falls in the next calendar month, in which case the distribution payment date will be the immediately preceding New York and London business day. Distributions will accumulate to the date that distributions are actually paid.

        To the extent that the issuers of the securities in which the LLC invests fail to make any payment in respect of such securities (or, if applicable, the related Investment Guarantees), the LLC will not have sufficient funds to pay and will not pay distributions on the LLC preferred securities (unless, under certain circumstances, we are able to sell sufficient amounts of our common stock or perpetual preferred stock satisfying the terms described herein), in which event the LLC guarantee will not apply to such distributions until the LLC has sufficient funds available therefor. See "Description of the LLC Guarantee." In addition, we may determine to defer distributions on the LLC preferred securities at any time in our sole discretion, and we may be required to defer distributions as described below under "—Mandatory Deferral." If the LLC fails to pay distributions on the LLC preferred securities, the trust will not have sufficient funds to make distributions on the trust preferred securities, in which event the trust guarantee will not apply to such distributions until the trust has sufficient funds available therefor.

        On August 19, 2065, if not earlier, the LLC will be dissolved, and its assets will be distributed as described under "Liquidation Distribution Upon Dissolution."

Optional Deferral

        We, as managing member of the LLC, may elect to defer one or more distributions on the LLC preferred securities at any time and from time to time. However, if as of any payment date and after giving effect to the distribution (if any) paid on that date, the LLC has failed to pay simple distributions in full on an aggregate of 20 payment dates (whether or not consecutive), we must use our commercially reasonable efforts to sell our common stock or our perpetual preferred stock for proceeds that shall be contributed to the LLC in an amount sufficient to pay all accumulated and unpaid distributions, including compounded amounts, on the LLC preferred securities in full. The LLC is required to distribute any such proceeds to holders of LLC preferred securities to the extent of income that has been allocated to them, less distributions that have been paid to them. In the event that we have similar obligations to sell our capital stock and contribute amounts in respect of instruments that are pari passu with the LLC preferred securities or the trust preferred securities, then we will

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contribute the net proceeds from such sales equally and ratably among the LLC preferred securities and such other instruments.

        If after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, the property trustee, upon written direction of holders of a majority in liquidation preference of the outstanding LLC preferred securities (excluding any LLC preferred securities held by us or any of our affiliates), must deliver a notice (the "Payment Notice") to us stating that it intends to exercise its rights and remedies under the LLC Agreement and thereafter will be entitled to exercise all rights and remedies under the LLC Agreement, including the right to dissolve the LLC.

        Any distribution on a payment date will first be allocated to payment of the simple distribution due on that payment date. Any payment of distributions in excess of the amount of the simple distribution due on that payment date will be applied first against any then existing accumulated and unpaid simple distributions, in chronological order, and then against any accumulated and unpaid compounded amounts. Once a deferred simple distribution for any prior payment date has been paid, that payment date will no longer be included for purposes of calculating the 20- and 28-payment date triggers referred to in this section and below under "—Mandatory Deferral."

Mandatory Deferral

        The LLC is prohibited from paying, and as manager of the LLC we are prohibited from causing the LLC to pay, distributions on the LLC preferred securities on any payment date in an aggregate amount exceeding the New Capital Amount, other than with the proceeds from issuances of our common stock and perpetual deferrable preferred stock described below if, on the related "calculation date," which is the 20^th day prior to such payment date:

(i)

our Trailing Two Quarters Consolidated Net Income Amount is not a positive amount for the two-fiscal quarter period ending on the last day of our fiscal quarter that is two fiscal quarters prior to the most recently completed fiscal quarter before that calculation date; and



(ii)

our Tangible Common Stockholders' Equity Amount as of the end of our most recently completed fiscal quarter before that calculation date and as of the end of our fiscal quarter that is two quarters before that fiscal quarter has declined in each case by 10% or more as compared to our Tangible Common Stockholders' Equity Amount at the end of the "benchmark fiscal quarter" for that calculation date, which is our sixth fiscal quarter preceding our most recently completed fiscal quarter before that calculation date.

        For purposes of the mandatory deferral test:

•

"Tangible Common Stockholders' Equity Amount" means, as of any quarter end and subject to certain adjustments described below, our common stockholders' equity minus identifiable intangible assets and goodwill, in each case as reflected on our consolidated GAAP balance sheet as of such quarter end;



•

"GAAP" means, at any date or for any period, U.S. generally accepted accounting principles as in effect on such date or for such period;



•

"New Capital Amount" means, at any date, the net proceeds received by us from new issuances of our common stock or perpetual deferrable preferred stock (whether in one or more public offerings or private placements) during the period commencing on the 90^th day prior to such date and designated by our board of directors at or before the time of issuance as available to pay distributions on the LLC preferred securities; and

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•

"Trailing Two Quarters Consolidated Net Income Amount" means, for any fiscal quarter and subject to certain adjustments described below, the sum of our consolidated net income for the two fiscal quarters ending as of the last day of such fiscal quarter.

        Our fiscal quarters end on the last day of each February, May, August and November.

        At any point that the two tests are triggered (which we refer to in each case as "failing" the tests), a "mandatory deferral event" will have occurred. Until the first calculation date relating to a payment date on which the LLC is permitted to pay distributions on the LLC preferred securities after giving effect to the test described above, we must use our commercially reasonable efforts to sell our common stock or our perpetual deferrable preferred stock in an amount sufficient to pay all accumulated and unpaid distributions, including compounded amounts, otherwise payable on any payment date in full. If we are unable to sell either our common or perpetual deferrable preferred stock, we will be obligated to use our commercially reasonable efforts to sell the other. The LLC is required to distribute proceeds received from such sale to holders of LLC preferred securities to the extent of income that has been allocated to them, less distributions that have been paid to them. In the event that we have similar obligations to sell our capital stock and contribute amounts in respect of instruments that are pari passu with the LLC preferred securities or the trust preferred securities, then we will contribute the net proceeds from such sales ratably among the LLC preferred securities and such other instruments. "Perpetual deferrable preferred stock" means any of our non-cumulative perpetual preferred stock with limitations on the payment of dividends that are at least as restrictive as those described under "—Mandatory Deferral." We intend that, if we redeem any perpetual deferrable preferred stock, we will redeem such perpetual deferrable preferred stock only to the extent the aggregate redemption price is equal to or less than the net proceeds, if any, received by us or any of our subsidiaries from new issuances by us or any of our subsidiaries to purchasers other than our affiliates during the period commencing on the 180^thcalendar day prior to the date of redemption of any securities that have equal or greater equity characteristics for us as the perpetual deferrable preferred stock. All perpetual deferrable preferred stock issued in connection with mandatory deferral events may not exceed $75 million net cash proceeds in the aggregate.

        If after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, the property trustee, upon written direction of holders of a majority in liquidation preference of the outstanding LLC preferred securities (excluding any LLC preferred securities held by us or any of our affiliates), must deliver the Payment Notice, and thereafter shall be entitled to exercise all rights and remedies under the LLC Agreement, including the right to dissolve the LLC.

        If we fail the above tests for any calculation date, the restriction on distributions on the LLC preferred securities will continue until we do not fail both tests for a calculation date, and our Tangible Common Stockholders' Equity Amount as of our most recently completed fiscal quarter before that calculation date has increased, or has declined by less than 10%, as compared to our Tangible Common Stockholders' Equity Amount at the end of the benchmark fiscal quarter for each previous calculation date during that mandatory deferral period as to which restrictions were imposed under those tests. For example, if we fail clause (ii) above for three consecutive calculation dates and related payment dates, the LLC would be permitted to pay distributions on the LLC preferred securities on the fourth payment date only if, as of the related calculation date:

(i)

we do not fail both clauses (i) and (ii) of the test set forth above for that fourth calculation date; and



(ii)

our Tangible Common Stockholders' Equity Amount as of our most recently completed fiscal quarter before that calculation date had increased from, or was less than 10% below, its level at the end of the benchmark fiscal quarter for each of the prior three calculation dates for which distributions were restricted under clause (ii) of the test set forth above. In effect, our

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Tangible Common Stockholders' Equity Amount as of the most recently completed fiscal quarter before the calculation date related to that payment date would have to be greater than, or less than 10% below, its level as of the end of not only the sixth fiscal quarter, but also each of the seventh, eighth and ninth fiscal quarters, preceding the most recently completed fiscal quarter prior to that calculation date.

        Although the foregoing tests would not restrict the LLC from paying distributions on the LLC preferred securities currently, there can be no assurance that future financial results will not result in these tests restricting such distributions.

        All financial terms used under this caption "—Mandatory Deferral" will be determined in accordance with GAAP as applied to and reflected in our consolidated financial statements as of the relevant dates or for the relevant periods, except (i) that our common stockholders' equity and consolidated net income at any date and for any period will be adjusted to exclude extraordinary items, unusual items and infrequently occurring items as defined in APB 30, goodwill impairment as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards ("SFAS") No. 142 and amounts relating to discontinued operations as defined in SFAS No. 144 and (ii) as provided in the next sentence. If because of a change in GAAP that results in a cumulative effect of a change in accounting principle or a restatement, either (i) our consolidated net income is higher or lower than it would have been absent such change, then, for purposes of calculating the calculations described in clause (i) of the test set forth above, commencing with the fiscal quarter for which such change in GAAP becomes effective, such consolidated net income will be calculated on a pro forma basis as if such change had not occurred; or (ii) our Tangible Common Stockholders' Equity Amount as of a fiscal quarter end is higher or lower than it would have been absent such change, then, for purposes of the calculations described in clause (ii) of the test set forth above, our Tangible Common Stockholders' Equity Amount will be calculated on a pro forma basis as if such change had not occurred.

        If at any relevant date or for any relevant period we are not a reporting company under the Exchange Act, then for any such relevant date and period we will prepare and post on our website the consolidated financial statements that we would have been required to file with the Commission had we continued to be a reporting company under the Exchange Act, in each case on or before the dates that we would have been required to file such financial statements had we continued to be an "accelerated filer" within the meaning of Rule 12b-2 under the Exchange Act.

Notices Related to Potential or Actual Mandatory Deferral of Distributions

        The LLC is required to give notice to the holders of the LLC preferred securities (which the trust will in turn be required to give to the holders of the trust preferred securities) of a potential mandatory deferral of distributions that could take effect for a subsequent payment date having a calculation date two fiscal quarters in the future if (i) our Trailing Two Quarters Consolidated Net Income Amount for our most recently completed fiscal quarter is not a positive amount; and (ii) our Tangible Common Stockholders' Equity Amount as of our most recently completed fiscal quarter has declined by 10% or more as compared to our Tangible Common Stockholders' Equity Amount as of the end of our fourth fiscal quarter preceding our most recently completed fiscal quarter.

        The LLC will send any such notice no later than the first payment date following the end of our most recently completed fiscal quarter for which the relevant financial information is available as of which the above tests indicate that a potential mandatory deferral of distributions could occur. Such notice will be sent by first class mail, postage prepaid, addressed to the holders of record of the trust preferred securities at their respective last addresses appearing on the trust's books, and we will file a copy of such notice on Form 8-K with the Commission. Such notice will (x) set forth the results of our Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders' Equity

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Amount for the relevant periods and dates, and (y) state that the LLC may be precluded by the terms of the LLC preferred securities from paying distributions on the second payment date after the date of such notice unless we, through the generation of earnings or issuance of shares of common stock, increase our Tangible Common Stockholders' Equity Amount by an amount specified in such notice by such payment date.

        By not later than the 15th day prior to each payment date for which distributions are being deferred by reason of the tests set forth above, we will give notice of such deferral by first class mail, postage prepaid, addressed to the holders of record of the trust preferred securities at their respective last addresses appearing on the trust's books, and we will file a copy of such notice on form 8-K with the Commission. Such notice, in addition to stating that distributions will be deferred, will set forth the applicable Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders' Equity Amount (and the amounts by which our Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders' Equity Amount must increase in order for payment of distributions to be resumed).

"Commercially Reasonable Efforts" with Respect to Issuance of Our Capital Stock

        As described above, upon the occurrence of a mandatory deferral event or if as of any payment date and after giving effect to the distribution (if any) paid on that date, the LLC has failed to pay simple distributions in full on an aggregate of 20 payment dates (whether or not consecutive), we are required to use our "commercially reasonable efforts" to sell our common stock or our perpetual preferred stock for proceeds that will be contributed to the LLC in an amount sufficient to pay all accumulated and unpaid distributions, including compounded amounts, in full. "Commercially reasonable efforts" to sell our common stock or our perpetual preferred stock means commercially reasonable efforts to complete the offer and sale of our common stock or such preferred stock to third parties that are not affiliates of ours in public offerings or private placements, provided that we will be deemed to have used such commercially reasonable efforts during a "market disruption event" (as defined below) regardless of whether we make any offers or sales during such market disruption event.

        A "market disruption event" means the occurrence or existence of any of the following events or sets of circumstances:

•

we would be required to obtain the consent or approval of our shareholders or a regulatory body (including, without limitation, any securities exchange) or governmental authority to issue such common stock or preferred stock and such consent or approval has not yet been obtained notwithstanding our commercially reasonable efforts to obtain such consent or approval;



•

trading in securities generally on the New York Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market or any other national securities, futures or options exchange or in the over-the-counter market, or trading in any of our securities (or any options or futures contracts related to our securities) on any exchange or in the over-the-counter market shall have been suspended or the settlement of such trading generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction;



•

a banking moratorium shall have been declared by federal or state authorities of the United States;



•

a material disruption shall have occurred in commercial banking or securities settlement or clearance services in the United States;



•

the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States, there shall have been a declaration of a national

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emergency or war by the United States or there shall have occurred any other substantial, national or international calamity or crisis;

•

there shall have occurred such a material adverse change in general domestic or international economic, political or financial conditions, including without limitation as a result of terrorist activities, or the effect of international conditions on the financial markets in the United States shall be such, as to make it, in our judgment, impracticable or inadvisable to proceed with the offer and sale of our common stock or preferred stock; or



•

an event occurs and is continuing as a result of which the offering document for such offer and sale of securities would, in our judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and either (1) the disclosure of that event at such time, in our judgment, would have a material adverse effect on our business or (2) the disclosure relates to a previously undisclosed proposed or pending material business transaction, the disclosure of which would impede our ability to consummate such transaction, provided that no single suspension period contemplated by this bullet shall exceed 90 consecutive days and multiple suspension periods contemplated by this bullet shall not exceed an aggregate of 180 days in any 360-day period.

Payment of Distributions

        Distributions on the LLC preferred securities are payable to holders registered on the relevant record date. As long as the trust preferred securities remain only in book-entry form, the record date for the payment of distributions will be one business day before the distribution date. If the trust preferred securities are ever issued in certificated form, the record date for the payment of distributions will be determined by the managing member of the LLC and will be at least one business day before the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions, when paid, shall be paid to the holders of record of LLC preferred securities as they appear on the books and records of the LLC on the record date fixed by the managing member for the next payment of distributions on the LLC preferred securities. If any date on which distributions would otherwise be payable is not a New York and London business day, then the distribution payment date will be the next succeeding New York and London business day unless such day falls in the next calendar month, in which case the distribution payment date will be the immediately preceding New York and London business day. Distributions will accumulate to the date that distributions are actually paid.

Certain Covenants of the Company

        We have covenanted in the LLC Agreement that if (a) full distributions on a compounded basis on any LLC preferred securities or trust preferred securities have not been paid for any distribution period at the Initial Floating Rate until August 19, 2010 and at the Stepped Up Floating Rate thereafter, (b) an event of default or a deferral period occurs and is continuing on any Affiliate Debt Instrument or (c) we are in default of any of our obligations under the trust guarantee, the LLC guarantee or any Investment Guarantee then, during such period we will not, nor will we permit any of our subsidiaries to:

•

declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of our capital stock;



•

make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any of our debt securities that rank on a parity with ("Parity Debt Securities") or junior in interest to the Company Debenture or any other Affiliate Debt Instrument issued by us; or

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•

make any guarantee payments with respect to any guarantee of ours of the debt securities of any subsidiary of ours if such guarantee ranks on a parity with ("Parity Guarantees") or junior in interest to the Company Debenture or any of such Affiliate Debt Instruments,

other than:

•

dividends or distributions in our common stock,



•

payments under the guarantees made by us in respect of the LLC preferred securities or trust securities or payments under any Investment Guarantee,



•

any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto,



•

purchases of common stock related to the issuance of common stock or rights under any of our benefit plans and



•

payments of interest on any of our Parity Debt Securities or payments under any Parity Guarantees in respect of interest payments on debt securities of any subsidiary of ours, in each case ratably and in proportion to the respective amount of (x) accrued and unpaid interest on such Parity Debt Securities or guaranteed by such Parity Guarantees, on the one hand, and (y) accumulated and unpaid distributions (including compounded amounts) on the LLC preferred securities, on the other hand.

        In addition, we have covenanted in the LLC Agreement that (1) if as of any payment date and after giving effect to the distribution (if any) paid on that date, the LLC has failed to pay simple distributions in full on an aggregate of 20 payment dates (whether or not consecutive) or (2) if any mandatory deferral has occurred and is continuing, we will use our commercially reasonable efforts to sell our common stock or our perpetual preferred stock (which shall be perpetual deferrable preferred stock in the case of a mandatory deferral) and contribute the net cash proceeds to the LLC in an amount sufficient to pay accumulated and unpaid distributions, including compounded amounts, in full. In the event that we have similar obligations to sell our capital stock and contribute amounts in respect of instruments that are pari passu with the LLC preferred securities or the trust preferred securities, then we will contribute the net proceeds from such sales equally and ratably among the LLC preferred securities and such other instruments.

Redemption

Optional Redemption

        The LLC preferred securities are redeemable, at our option as managing member, in whole or in part, from time to time, on or after August 19, 2010, upon not less than 30 nor more than 60 days' notice, at an amount per LLC preferred security equal to $1,000 plus accumulated and unpaid distributions (on a compounded basis) thereon, provided that if the LLC preferred securities are not redeemed in whole, at least $50 million aggregate liquidation amount of trust preferred securities (excluding trust preferred securities held by us or any of our affiliates) remains outstanding immediately after any such partial redemption. The Company Debenture has, and other Affiliate Debt Instruments will have, similar redemption provisions. See "Description of the LLC Investments." In the event that any portion of the Company Debenture or other Affiliate Debt Instruments is redeemed by us, the proportionate amount of LLC preferred securities will be redeemed by the LLC. If the LLC redeems LLC preferred securities in accordance with the terms thereof, a corresponding amount of trust securities will be mandatorily redeemed at the same price.

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Special Event Redemption or Distribution

        If, at any time, a Tax Event or an Investment Company Event (each as hereinafter defined, and each a "Special Event") occurs and is continuing, the managing member will, within 90 days following the occurrence of such Special Event, elect to either (i) redeem the LLC preferred securities in whole (but not in part), upon not less than 30 or more than 60 days' notice at the redemption price equal to their adjusted capital account, (ii) dissolve the LLC and distribute its assets to the trust, or (iii) cause the LLC preferred securities to remain outstanding, provided that (1) in the case of clauses (i) or (ii), if at the time there is available to the LLC the opportunity to eliminate, within such 90-day period, the Special Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similarly reasonable measure that in our sole judgment has or will cause no adverse effect on the LLC, the trust or us, the managing member will pursue such measure in lieu of redemption or dissolution, and (2) in the case of clause (iii), we will pay any and all costs and expenses incurred by or payable by the LLC attributable to the Special Event.

        "Tax Event" means that the managing member has requested and received an opinion of nationally recognized independent tax counsel experienced in such matters to the effect that there has been a Tax Action that relates to any of the events described in (i) through (iii) below and that there is more than an insubstantial risk that (i) the LLC or the trust is, or will be, subject to United States federal income tax with respect to income accrued or received on the Affiliate Debt Instruments or the Eligible Debt Securities, (ii) the LLC or the trust is, or will be, subject to more than a de minimis amount of other taxes, duties or other governmental charges or (iii) interest payable by an issuer (including us) with respect to the Affiliate Debt Instrument (including the Company Debenture) issued by such issuer is not, or will not be, deductible by such issuer for United States federal income tax purposes. "Tax Action" means any of (a) an amendment to, change in or announced proposed change in the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, (b) a judicial decision interpreting, applying, or clarifying such laws or regulations, (c) an administrative pronouncement or action that represents an official position (including a clarification of an official position) of the governmental authority or regulatory body making such administrative pronouncement or taking such action, or (d) a threatened challenge asserted in connection with an audit of us or any of our subsidiaries, the LLC, or the trust, or a threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Affiliate Debt Instruments (including the Company Debenture), the LLC preferred securities, or the trust preferred securities, which amendment or change is adopted or which proposed change, decision or pronouncement is announced or which action, clarification or challenge occurs on or after the date hereof.

        "Investment Company Event" means that the managing member has requested and received an opinion of nationally recognized independent legal counsel experienced in such matters to the effect that the LLC or the trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act as a result of an occurrence on or after the date hereof of a change in law or regulation or a change in written interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority.

Procedures

        We intend that, if we, as managing member, redeem the LLC preferred securities as described above under either "—Optional Redemption" or "—Special Event Redemption or Distribution," we will redeem the LLC preferred securities only to the extent the aggregate redemption price is equal to or less than the net proceeds, if any, received by us or any of our subsidiaries from new issuances by us or any of our subsidiaries to purchasers other than our affiliates during the period commencing on the 180^th calendar day prior to the date of redemption of any securities that have equal or greater equity characteristics for us as the LLC preferred securities and trust preferred securities.

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        The LLC may not redeem fewer than all the outstanding LLC preferred securities unless all accumulated and unpaid distributions (on a compounded basis) have been paid on all LLC preferred securities for all quarterly distribution periods terminating on or prior to the date of redemption.

        If the LLC gives a notice of redemption in respect of LLC preferred securities (which notice will be irrevocable) then, by 12:00 noon, New York City time, on the redemption date, the LLC will deposit with the paying agent for the LLC preferred securities funds sufficient to pay such amount in respect of any LLC preferred securities and will give such paying agent irrevocable instructions and authority to pay such amounts to the holders of LLC preferred securities upon surrender of their certificates.

        If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of holders of such LLC preferred securities so called for redemption will cease, except the right of the holders of such LLC preferred securities to receive the redemption price, but without interest on such redemption price. In the event that any date fixed for redemption of LLC preferred securities is not a business day, then payment of the redemption price payable on such date will be made on the next succeeding day that is a business day (and without any interest or other payment in respect of any such delay) except that, if such business day falls in the next calendar year, such payment will be made on the immediately preceding business day, in each case with the same force and effect as if made on such date fixed for redemption. In the event that payment of the redemption price in respect of LLC preferred securities is improperly withheld or refused and not paid either by the LLC or by us pursuant to the LLC guarantee described under "Description of the LLC Guarantee," distributions on such LLC preferred securities will continue to accumulate, from the original redemption date to the date of payment.

Liquidation Distribution Upon Dissolution

        In the event of any voluntary or involuntary dissolution of the LLC, the holders of the LLC preferred securities at the time will be entitled to receive out of the assets of the LLC available for distribution to holders of LLC common securities and LLC preferred securities after satisfaction of liabilities of creditors as required by the LLC Act, before any distribution of assets is made to the managing member, an amount equal to the adjusted capital account for the LLC preferred securities to the extent that funds are available to the LLC (such amount being the "LLC Liquidation Distribution"). The "adjusted capital account" for any security issued by the LLC is the amount equal to the stated liquidation preference of $1,000 for such security, as increased by income allocated thereto and decreased by losses allocated thereto or distributions paid thereon. Income will first be allocated to the LLC preferred securities in an amount equal to the Initial Floating Rate until August 19, 2010 and the Stepped Up Floating Rate thereafter of the adjusted capital account of the LLC preferred securities, on a quarterly compounded basis. Income received by the LLC above that amount will be allocated to the LLC common securities until the LLC common securities have been allocated income up to the Initial Floating Rate plus a margin equal to 2.0% until August 19, 2010 and up to the Stepped Up Floating Rate plus a margin equal to 2.0% thereafter of the adjusted capital account of the LLC common securities, on a quarterly compounded basis. Thereafter, any remaining income in excess of such amount will be allocated 50% to the LLC common securities and 50% to the LLC preferred securities. Losses are allocated first to the LLC common securities until the adjusted capital account of the LLC common securities is reduced to zero. Losses are then allocated to the LLC preferred securities until the adjusted capital accounts of the LLC preferred securities are reduced to zero. Any additional losses are thereafter allocated to the LLC common securities.

        Pursuant to the LLC Agreement, the LLC will be dissolved and its affairs will be wound up: (i) upon our bankruptcy, (ii) upon the assignment by the managing member of its entire interest in the LLC when the assignee is not admitted to the LLC as a managing member of the LLC in accordance with the LLC Agreement or the filing of a certificate of cancellation or its equivalent with respect to us or the revocation of our charter and the expiration of 90 days after the date of revocation without a

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reinstatement thereof, or if any other event occurs that causes the managing member to cease to be a managing member of the LLC under the LLC Act, unless the business of the LLC is continued in accordance with the LLC Act, (iii) upon the entry of a decree of judicial dissolution of us or the LLC, (iv) if the LLC has redeemed or otherwise purchased all the LLC preferred securities, (v) upon the written consent of all members of the LLC, (vi) upon our election following the occurrence and continuation of a Special Event, (vii) if on any payment date (a) the LLC does not pay the simple distribution due on such date in full and (b) if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, provided that a Payment Notice has been provided to us by the property trustee, upon written direction of holders of a majority in liquidation preference of the outstanding LLC preferred securities (excluding any LLC preferred securities held by us, the managing member or any of their affiliates) or (viii) on August 19, 2065.

LLC Enforcement Events

        If one or more of the following events occur and is continuing (each a "LLC Enforcement Event"): (i) if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, provided that a Payment Notice has been provided to us by the property trustee acting upon written direction of holders of a majority in liquidation preference of the outstanding LLC preferred securities (excluding any LLC preferred securities held by us, the managing member or any of our affiliates), (ii) we are in default on any of our obligations under the LLC guarantee or (iii) an event of default occurs and is continuing on any Affiliate Debt Instruments or we are in default under any Investment Guarantee, then holders of the LLC preferred securities, by the vote of a majority in aggregate liquidation preference of such holders (or, for so long as the LLC preferred securities are held by the property trustee, the property trustee, as the holder of the LLC preferred securities), will have the right to enforce (a) the LLC's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees, (b) the LLC's rights against us under the LLC Agreement (including with respect to our obligation to use commercially reasonable efforts to sell our common stock or perpetual preferred stock and contribute the proceeds to the LLC, and our obligation not to pay dividends on or make certain other payments with respect to our capital stock under certain circumstances) and (c) the rights of the holders of the LLC preferred securities to receive distributions (only if and to the extent not deferred by the managing member at its discretion or during a mandatory deferral period) on the LLC preferred securities and (d) the terms of the LLC guarantee."

        Upon the occurrence of any LLC Enforcement Event, the property trustee will act as the Special Representative of the LLC and the holders of the LLC preferred securities. The property trustee will cease to be a Special Representative of the LLC and the holders of the LLC preferred securities if (1) the LLC (or we pursuant to the LLC guarantee) has paid in full all accumulated and unpaid distributions on the LLC preferred securities, (2) the relevant event of default under an Affiliate Debt Instrument or default under any Investment Guarantee, as the case may be, is cured, and (3) we are in compliance with all our obligations under the LLC Agreement and the LLC guarantee and we, in our capacity as the managing member, continue the business of the LLC without dissolution. Notwithstanding the appointment of the property trustee as Special Representative, we will continue as managing member and will retain all rights under the LLC Agreement, including the right to defer, in our sole discretion, the payment of distributions on the LLC preferred securities.

        If the Special Representative fails to enforce its rights on behalf of the LLC under the Affiliate Debt Instruments and the LLC guarantee or Investment Guarantees after a holder of LLC preferred securities has made a written request, such holder of record of LLC preferred securities may on behalf of the LLC directly institute a legal proceeding against the issuers of the Affiliate Debt Instruments or us (as guarantor) to enforce the rights of the Special Representative and the LLC under the Affiliate

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Debt Instruments or the LLC guarantee or Investment Guarantee, as the case may be, without first instituting any legal proceeding against the Special Representative, the LLC or any other person or entity. In any event, if a LLC Enforcement Event has occurred and is continuing and such event is attributable to the failure of any issuer of any Affiliate Debt Instruments (including us) to make any required payment when due on the Company Debenture or any other Affiliate Debt Instrument or our failure to make any required payment when due on any LLC guarantee or any Investment Guarantee, then a holder of LLC preferred securities may on behalf of the LLC directly institute a proceeding against such issuer with respect to such Affiliate Debt Instrument or against us with respect to any such LLC guarantee or any Investment Guarantee, in each case for enforcement of payment. See "Description of the LLC Guarantee—Events of Default; Enforcement of LLC Guarantee."

        Under no circumstances, however, shall the Special Representative, any holder of LLC preferred securities or any holder of trust preferred securities have authority to prohibit us as the managing member from exercising our right to defer distributions on the LLC preferred securities. As a result, although the Special Representative may be able to enforce the LLC's rights to accelerate and receive payments in respect of the Affiliate Debt Instruments and the Investment Guarantees, we would be entitled to reinvest such payments in additional Affiliate Debt Instruments, subject to satisfying the reinvestment criteria described under "Description of the LLC Preferred Securities—LLC Investments," and the Eligible Debt Securities, rather than making distributions on the LLC preferred securities. However, if after giving effect to distributions (if any) paid on any payment date, we have failed to pay simple distributions in full on an aggregate of 28 payment dates, then the property trustee, as the holder of the LLC preferred securities, will have the right to dissolve the LLC and enforce the trust's rights with respect to the Affiliate Debt Instruments and the Investment Guarantees distributed to it in such dissolution.

Modification

        Except in connection with an action by the Special Representative with respect to a LLC Enforcement Event as described under "—LLC Enforcement Events" or as provided below, the LLC Agreement may be amended by a written instrument executed by the managing member without the consent of any non-managing member, provided that no such amendment will be made to the extent the result thereof would be to (i) cause the LLC to be treated for United States federal income tax purposes as an association or a publicly traded partnership taxable as a corporation or (ii) require the LLC to register under the Investment Company Act.

        If any proposed amendment of the LLC Agreement provides for, or the managing member otherwise proposes to effect, any amendment that would (i) change the amount or timing of any distribution of the LLC preferred securities or otherwise adversely affect the amount of any distribution required to be made in respect of the LLC preferred securities or (ii) restrict the right of a holder of LLC preferred securities to institute suit for the enforcement of any such payment, then the holders of outstanding LLC preferred securities will be entitled to vote on such amendment or proposal as a class and such amendment or proposal shall not be effective except with the approval of all holders of outstanding LLC preferred securities.

        If any proposed amendment to the LLC Agreement provides for, or the managing member otherwise proposes to effect, (i) any action that would adversely affect the powers, preferences or special rights of the LLC preferred securities, whether by way of amendment to the LLC Agreement or otherwise (including, without limitation, the authorization or issuance of any interests in the LLC ranking, as to participation in the profits or distributions or in the assets of the LLC, senior to the LLC preferred securities), or (ii) the dissolution of the LLC, other than as described under "Merger, Consolidation or Amalgamation of the LLC" or as described in the second paragraph under "Liquidation Distribution Upon Dissolution," then the holders of outstanding LLC preferred securities will be entitled to vote on such amendment or proposal of the managing member (but not on any other

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amendment or proposal) as a class, and such amendment or proposal will not be effective except with the approval of the holders of a majority in liquidation preference of the outstanding LLC preferred securities having a right to vote on the matter, provided that if the property trustee on behalf of the trust is the holder of the LLC preferred securities, any such amendment or proposal will not be effective without the prior or concurrent approval of the holders of a majority in liquidation amount of the outstanding trust preferred securities having a right to vote on such matters.

        Notwithstanding the preceding paragraph, the LLC Agreement may be amended without the consent of the holders of the LLC preferred securities to (i) cure any ambiguity or to correct or supplement any provision in the LLC Agreement that may be defective or inconsistent with any other provision of the LLC Agreement, (ii) add to the covenants, restrictions or obligations of the managing member, (iii) maintain the status of the LLC as a partnership for U.S. federal income tax purposes, (iv) comply with the requirements of the Commission in order to effect or maintain qualification of the declaration of trust or the LLC Agreement under the Trust Indenture Act or to ensure that the trust or the LLC is not required to register as an investment company under the Investment Company Act and (v) modify, eliminate and add to any provision of the LLC Agreement to such extent as may be necessary or desirable, provided that such modification, elimination or addition shall not have a material adverse effect on the rights, preferences or privileges of the holders of the LLC preferred securities.

Voting Rights and Procedures

        Except as provided below, above under "Modification," and "—LLC Enforcement Events" and "Description of the LLC Guarantee—Amendments and Assignment" and as otherwise required by law, the holders of the LLC preferred securities have no voting rights. Holders of the LLC preferred securities have no rights to remove or replace the managing member of the LLC.

        We as the managing member, will not (i) direct the time, method and place of conducting any proceeding for any remedy available, (ii) waive any event of default that is waivable under the Affiliate Debt Instruments, (iii) exercise any right to rescind or annul a declaration that the principal of any Affiliate Debt Instruments shall be due and payable, (iv) waive the breach of our covenant to restrict certain payments by us and our majority owned subsidiaries in respect of our capital stock, or (v) consent to any amendment, modification or termination of any Affiliate Debt Instrument, where such consent is required from the investor, without, in each case, obtaining the prior approval of the holders of a majority in liquidation preference of the LLC preferred securities, provided that if the property trustee on behalf of the trust is the holder of the LLC preferred securities, such waiver, consent or amendment or other action will not be effective without the prior or concurrent approval of a majority in liquidation amount of the outstanding trust preferred securities having a right to vote on such matters. We as the managing member will not revoke any action previously authorized or approved by a vote of the holders of the LLC preferred securities. We must notify all holders of the LLC preferred securities of any notice of an event of default received with respect to any Affiliate Debt Instrument.

        Any required approval or direction of holders of LLC preferred securities may be given at a separate meeting of holders of LLC preferred securities convened for such purpose, at a meeting of all members of the LLC or pursuant to written consent. We will cause a notice of any meeting at which holders of LLC preferred securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of LLC preferred securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matters upon which written consent is sought and (iii) instruction for the delivery of proxies or consents.

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        No vote or consent of the holders of LLC preferred securities will be required for the LLC to redeem and cancel LLC preferred securities in accordance with the LLC Agreement.

        Notwithstanding that holders of LLC preferred securities are entitled to vote or consent under any of the circumstances described above, any of the LLC preferred securities at such time that are owned by us or by any entity directly or indirectly controlled by, or under direct or indirect common control with, us, will not be entitled to vote or consent and will, for purposes of such vote or consent, be treated as if they were not outstanding, provided that persons (other than our affiliates) to whom we or any of our subsidiaries have pledged trust preferred securities may vote or consent with respect to such pledged trust preferred securities under any of the circumstances described in this prospectus.

Merger, Consolidation or Amalgamation of the LLC

        The LLC may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any corporation or other body, except as described below. The LLC may, without the consent of the holders of the LLC preferred securities, consolidate, amalgamate, merge with or into, or be replaced by a limited partnership, limited liability company or trust organized as such under the laws of any state of the United States of America, provided that (i) if the LLC is not the survivor, the successor entity either (x) expressly assumes all of the obligations of the LLC under the LLC preferred securities or (y) substitutes for the LLC preferred securities other securities having substantially the same terms as the LLC preferred securities so long as the successor securities are not junior to any other equity securities of the successor entity, with respect to participation in the profits and distributions, and in the assets, of the successor entity, (ii) the issuers of the Affiliate Debt Instruments expressly acknowledge the successor entity as the holder of the Affiliate Debt Instruments, (iii) such merger, consolidation, amalgamation or replacement does not cause the trust preferred securities to be downgraded by any nationally recognized statistical rating organization, (iv) such merger, consolidation, amalgamation or replacement does not adversely affect the powers, preferences and other special rights of the holders of the trust preferred securities or LLC preferred securities (including any successor securities) in any material respect (other than, in the case of the LLC preferred securities, with respect to any dilution of the holders' interest in the new resulting entity), (v) such successor entity has a purpose substantially identical to that of the LLC, (vi) we guarantee the obligations of the successor entity under the successor securities at least to the extent provided by the LLC guarantee, (vii) prior to such merger, consolidation, amalgamation or replacement, we have received an opinion of nationally recognized independent counsel to the LLC experienced in such matters to the effect that (A) such merger, consolidation, amalgamation or replacement does not adversely affect the powers, preferences and other special rights of the holders of the trust preferred securities or LLC preferred securities (including any successor securities) in any material respect (other than, in the case of the LLC preferred securities, with respect to any dilution of the holders' interest in the new resulting entity), (B) the LLC (or the successor entity) will be treated as a partnership for United States federal income tax purposes, (C) such merger, consolidation, amalgamation or replacement would not cause either the LLC (or the successor entity) or the trust to be classified as an association taxable as a corporation for United States federal income tax purposes, (D) following such merger, consolidation, amalgamation or replacement, the LLC (or the successor entity) and the trust will be in compliance with the Investment Company Act without registering thereunder as an investment company, and (E) such merger, consolidation, amalgamation or replacement will not adversely affect the limited liability of the holders of the LLC preferred securities.

Governing Law

        The LLC Agreement and the LLC preferred securities are governed by, and construed in accordance with, the internal laws of the State of Delaware.

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Miscellaneous

        The managing member is authorized and directed to conduct its affairs and to operate the LLC in such a way that (i) the LLC will not be deemed to be an "investment company" required to be registered under the Investment Company Act, (ii) the Affiliate Debt Instruments will be treated as indebtedness of the issuer of such debt instruments for United States federal income tax purposes and (iii) the LLC will not be treated as an association or as a "publicly traded partnership" (within the meaning of Section 7704 of the Code) taxable as a corporation for United States federal income tax purposes. In this connection, the managing member is authorized to take any action, not inconsistent with applicable law, the certificate of formation of the LLC or the LLC Agreement, that the managing member determines in its discretion to be necessary or desirable for such purposes.

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DESCRIPTION OF THE LLC GUARANTEE

        Set forth below is a summary of information concerning the LLC guarantee that was executed and delivered by us for the benefit of the holders from time to time of LLC preferred securities. The summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the LLC guarantee. The LLC guarantee is filed as an exhibit to the registration statement of which this prospectus is a part. You can obtain a copy of the LLC guarantee by following the directions under "Where You Can Find More Information." The LLC guarantee incorporates by reference the terms of, and will be qualified as an indenture under, the Trust Indenture Act. JPMorgan Chase Bank, N.A., as the LLC guarantee trustee, will hold the LLC guarantee for the benefit of the holders of the LLC preferred securities and will act as indenture trustee for the purposes of compliance with the Trust Indenture Act.

General

        Pursuant to the LLC guarantee, we have irrevocably agreed, on a subordinated basis to the extent set forth therein, to pay in full to the holders of the LLC preferred securities (without duplication of amounts theretofore paid by the LLC), as and when due, regardless of any defense, right of set-off or counterclaim that the LLC may have or assert, the following payments: (i) any accumulated and unpaid distributions on the LLC preferred securities out of funds of the LLC legally available therefor, (ii) the redemption price with respect to any LLC preferred securities called for redemption by the LLC out of funds of the LLC legally available therefor, and (iii) upon a dissolution of the LLC, the lesser of (a) the aggregate of the liquidation preference and all accumulated and unpaid distributions on the LLC preferred securities and (b) the amount of assets of the LLC after satisfaction of all liabilities remaining available for distribution to holders of LLC preferred securities in dissolution of the LLC. Our obligation to make any payment under the LLC guarantee may be satisfied by direct payment of the required amounts by us to the holders of LLC preferred securities or by causing the LLC to pay such amounts to such holders.

        The LLC guarantee is a guarantee on a subordinated basis with respect to the LLC preferred securities from the time of issuance of such LLC preferred securities but will only apply to any payment of distributions or redemption price, or to payments upon the dissolution of the LLC, to the extent the LLC has funds available therefor. If issuers (including us) of the Affiliate Debt Instruments in which the LLC invests or we, as guarantor under any Investment Guarantee, fail to make any payment in respect of such securities (or, if applicable, guarantees), the LLC may not pay distributions on the LLC preferred securities. In such event, holders of the LLC preferred securities would not be able to rely upon the LLC guarantee for payment of such amounts. Instead, holders of the LLC preferred securities will have the remedies described in this prospectus under "Description of the LLC Preferred Securities—LLC Enforcement Events."

        The LLC guarantee does not apply to current distributions by the LLC unless and until the LLC has legally available funds for payment or to liquidating distributions unless there are assets available for payment in the LLC, each as more fully described under "Risk Factors—Distributions by the LLC may be deferred in our discretion and, in such case, holders will be required to recognize income for U.S. federal income tax purposes in advance of the receipt of cash attributable to such income."

Events of Default; Enforcement of LLC Guarantee

        An event of default under the LLC guarantee will occur upon our failure to perform any of our payment or other obligations thereunder. The LLC guarantee will constitute a guarantee of payment and not of collection (that is, the guaranteed party may directly institute a legal proceeding against us to enforce its rights under the LLC guarantee without instituting a legal proceeding against any other person or entity).

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        The holders of a majority in liquidation amount of the LLC preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the LLC guarantee trustee in respect of the LLC guarantee or to direct the exercise of any trust or power conferred upon the LLC guarantee trustee under the LLC guarantee. If the LLC guarantee trustee fails to enforce its rights under the LLC guarantee, after a holder of LLC preferred securities has made a written request, such holder of LLC preferred securities may institute a legal proceeding directly against us to enforce the LLC guarantee trustee's rights under the LLC guarantee without first instituting a legal proceeding against the LLC, the LLC guarantee trustee or any other person or entity. Notwithstanding the foregoing, if we have failed to make a guarantee payment, a holder of LLC preferred securities may directly institute a proceeding against us for enforcement of the LLC guarantee for such payment.

        We, as guarantor, are required to file annually with the managing member a certificate as to whether or not we are in compliance with all the conditions and covenants applicable to it under the guarantee.

Subordination

        The LLC guarantee constitutes an unsecured obligation of ours. The LLC guarantee ranks subordinate and junior to all other liabilities of ours and ranks pari passu with the most senior preferred stock issued from time to time by us and with any guarantee now or hereafter entered into by us in respect of any preferred stock of any affiliate of ours. The LLC Agreement provides that each holder of LLC preferred securities by acceptance thereof agrees to the subordination provisions and other terms of the LLC guarantee.

Amendments and Assignment

        Except with respect to any changes that do not adversely affect the rights of holders of LLC preferred securities (in which case no consent will be required), the LLC guarantee may be amended only with the prior approval of the holders of not less than a majority in liquidation preference of the outstanding LLC preferred securities.

        All guarantees and agreements contained in the LLC guarantee shall bind our successors, assigns, receivers, trustees and representatives and shall inure to the benefit of the holders of the LLC preferred securities then outstanding. Except in connection with any permitted merger or consolidation of us with or into another entity or any permitted sale, transfer or lease of our assets to another entity as described below under "Description of the LLC Investments—The Company Debenture—Limitations on Mergers and Sales of Assets," we may not assign our rights or delegate our obligations under the LLC guarantee without the prior approval of the holders of at least a majority of the aggregate stated liquidation amount of the LLC preferred securities then outstanding.

Termination of the LLC Guarantee

        The LLC guarantee will terminate and be of no further force and effect as to the LLC preferred securities upon (i) full payment of the redemption price of all LLC preferred securities or (ii) full payment of the amounts payable in accordance with the LLC Agreement upon dissolution of the LLC. The LLC guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of LLC preferred securities must restore payment of any sums paid under the LLC preferred securities or the LLC guarantee, except to the extent any holder must restore amounts wrongfully distributed by the LLC, as required by the LLC Act.

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Information Concerning the LLC Guarantee Trustee

        The LLC guarantee trustee, prior to the occurrence of a default with respect to the LLC guarantee, undertakes to perform only such duties as are specifically set forth in the LLC guarantee and, after default with respect to the LLC guarantee, shall exercise the same degree of care as a prudent man would exercise in the conduct of his own affairs. Subject to such provision, the LLC guarantee trustee is under no obligation to exercise any of the powers vested in it by the LLC guarantee at the request of any holder of LLC preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. The holders of LLC preferred securities will not be required to offer such indemnity in the event such holders, by exercising their voting rights, direct the LLC guarantee trustee to take any action following a default with respect to the LLC guarantee.

Certain Business Relationships with LLC Guarantee Trustee

        We and certain of our subsidiaries maintain bank accounts, borrow money and have other commercial banking, investment banking and other business relationships with the LLC guarantee trustee and their affiliates in the ordinary course of business. The LLC guarantee trustee or its affiliates may participate as underwriters, agents or dealers in any offering of LLC preferred securities and the trust preferred securities.

Governing Law

        The LLC guarantee is governed by and construed in accordance with the laws of the State of New York.

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DESCRIPTION OF THE LLC INVESTMENTS

        As described above under "Lehman Brothers Holdings E-Capital LLC I," the LLC may only invest in Affiliate Debt Instruments (including the Company Debenture) and Eligible Debt Securities. Approximately 95% of the proceeds from the initial issuance of the LLC preferred securities and the managing member's contemporaneous capital contribution was used by the LLC to purchase the Company Debenture and the remaining 5% of the proceeds was used to purchase Eligible Debt Securities. The purchase of the Company Debenture by the LLC will occurred contemporaneously with the issuance of the LLC preferred securities. The LLC may not sell any Affiliate Debt Instrument.

The Company Debenture

        The Company Debenture was issued pursuant to a subordinated debt indenture between us and JPMorgan Chase Bank, N.A., as the indenture trustee. The indenture is qualified under the Trust Indenture Act of 1939. The terms of the Company Debenture include those stated in the indenture and those made a part of the indenture by the Trust Indenture Act. The following summary of the material terms of the Company Debenture is not intended to be complete and is qualified by the indenture, the Trust Indenture Act and other applicable law. The indenture is filed as an exhibit to the registration statement of which this prospectus is a part. You can obtain a copy of the indenture by following the directions under "Where You Can Find More Information."

        We may, without the consent of the holders of the Company Debenture, create and issue additional subordinated debentures ranking equally with the Company Debenture and otherwise similar in all respects except for the issue date, issue price and the payment of interest accruing prior to the issue date of such additional subordinated debentures. Such further subordinated debentures, if any, would be consolidated and form a single series with the Company Debenture. No additional subordinated debentures can be issued if an event of default has occurred with respect to the Company Debenture.

        The Company Debenture is subordinated to all of our "senior debt" as discussed below under "—Subordination." In addition, the Company Debenture is effectively subordinated to all existing and future obligations of our subsidiaries. Since we are primarily a holding company, our cash flow and consequent ability to satisfy our obligations with respect to the Company Debenture and Investment Guarantees are dependent upon the earnings of our subsidiaries and distribution of those earnings or loans or other payments by those subsidiaries to us. Our subsidiaries have no obligation to pay any amount in respect of the Company Debenture and Investment Guarantees or to make any funds available therefor. Several of our principal subsidiaries are subject to various capital adequacy requirements promulgated by the regulatory, banking and exchange authorities of the countries in which they operate and/or to capital targets established by various ratings agencies. These regulatory rules, and certain covenants contained in various debt agreements, may restrict our ability to withdraw capital from our subsidiaries by dividends, loans or other payments. Further information about these requirements and restrictions is contained or incorporated by reference in our most recent Annual Report on Form 10-K. Additionally, our ability to participate as an equity holder in any distribution of assets of any subsidiary is subordinate to the claims of creditors of the subsidiary, except to the extent that any claims we may have as a creditor of the subsidiary are judicially recognized.

Interest and Maturity

        The Company Debenture will mature on August 19, 2035 and bears interest at an annual rate equal to the Initial Floating Rate until August 19, 2010 and at the Stepped Up Floating Rate from August 19, 2010 until its maturity on August 19, 2035, payable quarterly in arrears on February 19, May 19, August 19 and November 19 of each year, unless interest is deferred as described below.

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Interest not paid on any payment date will accrue and compound quarterly at a rate per annum equal to the then applicable rate on the Company Debenture to but excluding the next payment date.

        "3-month LIBOR", with respect to an interest payment period, means the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the second London business day immediately preceding the first day of such dividend period. A "London business day" means a day other than a Saturday or Sunday on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market. The term "Telerate Page 3750" means the display on Bridge Telerate, Inc. on page 3750 or any successor service or page for the purpose of displaying the London interbank offered rates of major banks.

        If 3-month LIBOR cannot be determined as described above, we will select four major banks in the London interbank market. We will request that the principal London offices of those four selected banks provide their offered quotations to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the second business day immediately preceding the first day of such interest payment period. These quotations will be for deposits in U.S. dollars for a three-month period. Offered quotations must be based on a principal amount equal to an amount that is representative of a single transaction in U.S. dollars in the market at the time.

        If two or more quotations are provided, 3-month LIBOR for the interest payment period will be the arithmetic mean of the quotations. If fewer than two quotations are provided, we will select three major rates quoted by those three major banks in New York City time, on the second London business day immediately preceding the first day of such dividend period. The rates quoted will be for loans in U.S. dollars, for a three -month period. Rates quoted must be based on a principal amount equal to an amount that is representative of a single transaction in U.S. dollars in the market at the time. If fewer than three New York City banks selected by us are quoting rates, 3-month LIBOR for the applicable period will be the same as for the immediately preceding dividend period.

        All percentages resulting from any interest rate calculation will be rounded upward or downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point.

        If any date on which interest would otherwise be payable is not a New York and London business day, then the interest payment date will be the next succeeding New York and London business day unless such day falls in the next calendar month, in which case the interest payment date will be the immediately preceding New York and London business day. "New York business day" means any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed. Interest will accrue to the date that interest is actually paid.

        The amount of interest payable for any period will be computed on the basis of a 360 day year and the actual number of days elapsed.

Calculation Agent

        Calculations relating to LIBOR are made by the calculation agent, an institution that we have appointed as our agent for this purpose. That institution is currently, and at any time in the future may continue to be, one of our affiliates. We may appoint a different institution to serve as calculation agent from time to time without your consent and without notifying you of the change.

Option to Defer Interest Payments

        We can defer interest payments on the Company Debenture (including additional interest) and any other of our Affiliate Debt Instruments and our affiliates may defer interest payments on their Affiliate Debt Instruments for up to 20 consecutive quarterly periods if the Affiliate Debt Instrument is not in

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default. A deferral of interest payments cannot extend, however, beyond the maturity date of the Affiliate Debt Instrument. During the deferral period, interest will continue to accrue on the Affiliate Debt Instrument, compounded quarterly and deferred interest payments will accrue additional interest. No interest will be due and payable on the Affiliate Debt Instrument until the end of the deferral period except upon a redemption of the Affiliate Debt Instrument during a deferral period.

        We may pay at any time all or any portion of the interest accrued to that point during a deferral period. At the end of the deferral period or on any redemption date, we will be obligated to pay all accrued and unpaid interest.

        Once we make all interest payments on the Affiliate Debt Instruments, with accrued and unpaid interest, it can again defer interest payments on the Affiliate Debt Instruments as described above.

        During any deferral period, neither we nor any of our subsidiaries will be permitted to:

•

pay a dividend or make any other payment or distribution on our capital stock;



•

redeem, purchase or make a liquidation payment on any of our capital stock;



•

make an interest, principal or premium payment, or repay, repurchase or redeem, any of our debt securities that rank equal with or junior to our Affiliate Debt Instruments; or



•

make any guarantee payment with respect to any guarantee by us of debt securities of any of our subsidiaries, if the guarantee ranks equal to or junior to our Affiliate Debt Instruments.

        During any deferral period, however, we will be permitted to:

•

pay dividends or distributions by way of issuance of our common stock;



•

make payments under the guarantee in respect of the preferred and common securities;



•

declare or pay a dividend in connection with the implementation of a shareholders' rights plan, or the issuing of stock under such a plan or repurchase such rights;



•

purchase common stock relating to the issuing of common stock or rights under any of our benefit plans; and



•

pay interest on any of our Parity Debt Securities or payments under any Parity Guarantees in respect of interest payments on debt securities of any subsidiary of ours, in each case ratably and in proportion to the respective amount of (x) accreted and unpaid interest on such Parity Debt Securities or guaranteed by such Parity Guarantees, on the one hand, and (y) accumulated and unpaid distributions (including compounded amounts) on the LLC preferred securities, on the other hand.

        We will give the regular trustees and the property trustee notice of our election to defer interest payments one business day prior to the earlier of:

•

the date distributions on the trust preferred securities would be payable, if not for such deferral period, or



•

if applicable, the date the regular trustees are required to give notice to any self-regulatory organization or to holders of the trust preferred securities of the record date or the date such distribution would be payable, if not for such deferral period,

but in any event one business day prior to such record date. The regular trustees will give notice of our selection of the deferral period to the holders of the trust preferred securities.

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Subordination

        The Company Debenture is subordinated and junior in right of payment, to the extent set forth in the indenture, to all our "senior debt" (as defined below). The indenture does not limit our ability to issue or incur senior debt.

        If we default in the payment of any principal of, or premium, if any, or interest on any senior debt when it becomes due and payable after any applicable grace period, then, unless and until the default is cured or waived or ceases to exist, we cannot make a payment on account of or redeem or otherwise acquire the Company Debenture. If there is any insolvency, bankruptcy, dissolution or other similar proceeding relating to us, our creditors or our property, then all senior debt must be paid in full before any payment may be made to the holders of the Company Debenture.

        Furthermore, if a default in the payment of the principal of and accrued interest on the Company Debenture results in a cross-acceleration of our senior debt agreements, holders of that senior debt will first be entitled to receive payment in full in cash before holders of the Company Debenture can receive any payments.

        "Senior debt" means:

(1)

the principal, premium, if any, and interest in respect of (A) our indebtedness for money borrowed and (B) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by us;



(2)

all our capitalized lease obligations;



(3)

all our obligations representing the deferred purchase price of property; and



(4)

all deferrals, renewals, extensions and refundings of obligations of the type referred to in clauses (1) through (3);

but senior debt does not include:

(a)

any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, the Company Debenture; and



(b)

indebtedness for goods or materials purchased in the ordinary course of business or for services obtained in the ordinary course of business or indebtedness consisting of trade payables.

        As of August 31, 2006, our "senior debt" aggregated approximately $72.6 billion, which includes $1.2 billion aggregate principal amount of junior subordinated notes related to the trust preferred securities of four other Delaware statutory trusts wholly owned by us.

Redemption

        The Company Debenture may be redeemed, in whole or in part, at any time on and after August 19, 2010 at our option upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price equal to 100% of the principal amount of the Company Debenture so redeemed, and accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of the holders of record on the relevant record date to receive interest due on the relevant interest payment date), provided that if the LLC preferred securities are not redeemed in whole, at least $50 million aggregate liquidation amount of trust preferred securities (excluding trust preferred securities held by us or any of our affiliates) remains outstanding immediately after any such partial redemption. The redemption date shall be a payment date under the trust preferred securities.

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        We intend that, if we redeem the Company Debenture at our option as described in the preceding paragraph, we will redeem it only to the extent the aggregate redemption price is equal to or less than the net proceeds, if any, received by us or any of our subsidiaries from new issuances by us or any of our subsidiaries to purchasers other than our affiliates during the period commencing on the 180^th calendar day prior to the date of redemption of any securities that have equal or greater equity characteristics for us as the LLC preferred securities and trust preferred securities.

        We also have the right to redeem the Company Debenture in the same manner as described above under "Description of the LLC Preferred Securities—Special Event Redemption or Distribution." The redemption price is equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest and additional interest, if any.

Limitations on Mergers and Sales of Assets

        The indenture provides that we will not merge or consolidate or transfer or lease all or substantially all of our assets, and another person may not transfer or lease all or substantially all of its assets to us, unless:

•

either (1) we are the continuing corporation, or (2) the successor corporation, if other than us, is a U.S. corporation and expressly assumes by supplemental indenture the obligations evidenced by the Company Debenture; and



•

immediately after the transaction, there would not be any default in the performance of any covenant or condition of the indenture.

        Other than the restrictions described above, the indenture does not contain any covenants or provisions that would protect holders of the Company Debenture in the event of a highly leveraged transaction.

Indenture Events of Default

        The indenture provides that the following are events of default relating to the Company Debenture:

•

failure to pay required interest on the Company Debenture when due for 30 days (subject to the interest deferral provisions described above);



•

failure to pay principal on the Company Debenture when due;



•

failure to perform in any material respect for 90 days after notice any other covenant in the indenture other than a covenant included in the indenture solely for the benefit of a series of debt securities other than the Company Debenture;



•

certain events of bankruptcy or insolvency, whether voluntary or not; and



•

certain dissolutions of the trust or the LLC.

        If any indenture event of default occurs and is continuing, the LLC, as the holder of the Company Debenture, will have the right to declare the principal of and the interest on the Company Debenture and any other amounts payable under the indenture to be immediately due and payable. An indenture event of default also constitutes a LLC Enforcement Event and a Trust Enforcement Event. The holders of trust preferred securities in limited circumstances have the right to direct the property trustee, as holder of the LLC preferred securities, to enforce the terms of the LLC preferred securities, including the right as Special Representative to enforce the LLC's rights with respect to the Affiliate Debt Instruments, including the Company Debenture, and the Investment Guarantees. See "Description of the Trust Preferred Securities—Trust Enforcement Events" and "—Voting Rights."

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        If a LLC Enforcement Event has occurred and is continuing and such event is attributable to our failure to pay interest or principal on the Company Debenture when such interest or principal is payable, a holder of LLC preferred securities or trust preferred securities may sue us directly for payment.

Modification of Indenture

        Under the indenture, we and the relevant trustee can enter into supplemental indentures to establish the form and terms of any new series of debt securities without obtaining the consent of any holder of outstanding Company Debenture. In addition, we and the trustee may amend the indenture without the consent of any holder:

•

to cure any ambiguity;



•

to correct or supplement any defective or inconsistent provision; or



•

to make any other change that we believe is necessary or desirable and will not adversely affect the interests of the affected holders in any material respect.

        We and the trustee may, with the consent of the holders of at least 66²/3% in aggregate principal amount of the debt securities of a series, modify the applicable indenture or the rights of the holders of the securities of such series to be affected.

        No such modification may, without the consent of the holder of each security so affected:

•

extend the fixed maturity of any such securities;



•

reduce the rate or change the time of payment of interest on such securities;



•

reduce the principal amount of such securities;



•

change any of our obligations to pay any additional amounts;



•

change the currency or currency unit in which any such securities are payable or any right of selection thereof;



•

impair the right to sue for the enforcement of any such payment on or after the maturity of such securities;



•

reduce the percentage of securities referred to above whose holders need to consent to the modification or a waiver without the consent of such holders; and



•

change any of our obligations to maintain an office or agency.

Agreement by Purchasers of Certain Tax Treatment

        The Company Debenture will provide that, by acceptance of the Company Debenture, or a beneficial interest therein, the holder of the Company Debenture intends that such subordinated debenture constitutes debt and agrees to treat it as debt for United States federal, state and local tax purposes.

Concerning the Indenture Trustee

        We and certain of our subsidiaries may maintain bank accounts, borrow money and have other commercial banking, investment banking and other business relationships with the indenture trustee and its affiliates in the ordinary course of business. The indenture trustee or its affiliates may participate as underwriters, agents or dealers in any offering of our securities.

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Affiliate Debt Instruments

        Any Affiliate Debt Instruments that the LLC invests in from time to time will have terms and conditions substantially similar to the Company Debenture, including the same ability to defer interest payments ranking pari passu and subordinated to all of our senior debt. Certain terms, such as the interest rate, redemption provisions and covenants, will be those appropriate for unsecured debt securities issued by the Company or its affiliates at the time of such issuance pursuant to a public offering or private placement under Rule 144A of a debt security comparable to the Affiliate Debt Instruments as determined by the Independent Financial Advisor, as described below. The Affiliate Debt Instruments will permit redemption following the occurrence of a Special Event, in each case, in the same manner described under "Description of the LLC Preferred Securities—Optional Redemption" and "—Special Event Redemption or Distribution" above. The Affiliate Debt Instruments will also contain customary events of default, including events of default for defaults in payments on such securities when due (provided that no default shall occur upon a valid deferral of an interest payment by an issuer), defaults in the performance of the relevant issuer's obligations under its Affiliate Debt Instrument and certain bankruptcy, insolvency or reorganization events (subject to customary exceptions and grace periods).

        The LLC may, from time to time and subject to the restrictions described below, reinvest payments received with respect to the Affiliate Debt Instruments (including the Company Debenture) and the Eligible Debt Securities in additional Affiliate Debt Instruments and Eligible Debt Securities, provided that the LLC must at all times hold Affiliate Debt Instruments with an aggregate principal amount plus accrued and unpaid interest equal to at least the aggregate liquidation preference of the LLC preferred securities plus accumulated and unpaid distributions.

        The specific terms of all Affiliate Debt Instruments will be determined either by a nationally recognized investment banking firm that does not (and whose directors, officers, employees and affiliates do not) have a direct or indirect material equity interest in us or any of our subsidiaries and that is either among the five largest underwriters of debt or preferred securities in the United States or was selected by us and approved by the holders of a majority in liquidation amount of the LLC preferred securities (the "Independent Financial Advisor").

        The LLC may reinvest in additional Affiliate Debt Instruments only if certain procedures and criteria (the "Reinvestment Criteria") are satisfied with respect to such Affiliate Debt Instruments, including the satisfaction of the following conditions: (i) the stated maturity for such Affiliate Debt Instrument must be no more than 30 years from the date of its issuance and no later than 60 years following the date of issuance of the LLC preferred securities, (ii) (a) for the three years prior to such reinvestment, there shall have been no default under any mortgage, indenture or instrument under which there was issued or guaranteed, or by which there was secured or evidenced, any indebtedness for money borrowed by the issuer of such Affiliate Debt Instrument caused by a failure to pay principal of, or interest or premium, if any, on, such indebtedness when due or that resulted in the acceleration of such indebtedness prior to its express maturity and (b) no arrearages of dividends on preferred stock issued by the issuer of the Affiliate Debt Instruments shall have occurred and shall be continuing, (iii) the applicable terms and provisions with respect to the proposed Affiliate Debt Instruments have been determined by the Independent Financial Advisor to be at least as favorable as terms that could be obtained by the LLC in a public offering or private placement under Rule 144A of a comparable security issued by the relevant issuer, (iv) the issuer shall not be deemed to be an investment company by reason of Section 3(a) or 3(b) of the Investment Company Act or excepted from the definition of investment company by Section 3(c) of the Investment Company Act, (v) any Affiliate Debt Instrument that is not issued by us must be guaranteed by us under an Investment Guarantee, (vi) the investment in such Affiliate Debt Instrument does not result in a downgrading of any then existing rating of the trust preferred securities by a nationally recognized statistical rating organization and (vii) the interest payment dates are the same as the distribution payment dates for the trust preferred securities.

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Affiliate Debt Instruments must be issued by us or any corporation, partnership, limited liability company or other entity (other than the LLC or the trust) that is controlled by us. If the LLC is unable to reinvest payments and proceeds from the Company Debenture in additional Affiliate Debt Instruments meeting the above criteria, the LLC may only invest such funds in Eligible Debt Securities.

Investment Guarantees

General

        We will agree, on a subordinated basis and to the extent set forth in this prospectus, to execute and deliver an Investment Guarantee for the benefit of the holders of LLC preferred securities with respect to each Affiliate Debt Instrument that is not issued by us to the extent set forth below. The Investment Guarantees will be enforceable regardless of any defense, right of set-off or counterclaim that we may have or assert. The Investment Guarantees will be guarantees with respect to the applicable Affiliate Debt Instruments from the time of issuance. The Investment Guarantees will constitute guarantees of payment and not of collection (that is, the guaranteed party may directly institute a legal proceeding against us to enforce its rights under the applicable Investment Guarantee without instituting a legal proceeding against any other person or entity).

        If an event of default under any Affiliate Debt Instrument not issued by us occurs, the Special Representative will have the right to enforce the related Investment Guarantee on behalf of the holders of the LLC preferred securities. The holders of a majority in aggregate liquidation preference of the LLC preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available in respect of any Investment Guarantee, including the giving of directions to the Special Representative. If the Special Representative fails to enforce any Investment Guarantee as above provided, any holder of trust preferred securities may institute its own legal proceeding to enforce such Investment Guarantee. No Investment Guarantee will be discharged except by payment in full of all amounts guaranteed by such Investment Guarantee (without duplication of amounts theretofore paid by the relevant issuer of the Affiliate Debt Instrument).

Amendments and Assignment

        Except with respect to any changes that do not adversely affect the rights of holders of LLC preferred securities (in which case no consent will be required), the Investment Guarantees may be amended only with the prior approval of the holders of a majority in liquidation preference of the outstanding LLC preferred securities, provided that for so long as the property trustee of the trust is the holder of the LLC preferred securities, such amendment will not be effective without the prior written approval of a majority in liquidation amount of the outstanding trust preferred securities.

        All guarantees and agreements contained in the Investment Guarantees will bind our successors, assigns, receivers, trustees and representatives and will inure to the benefit of the holders of LLC preferred securities.

Status of the Investment Guarantees

        Our obligations under the Investment Guarantees will constitute unsecured obligations of ours and will be subordinated and junior in right of payment to all our senior debt to the same extent as the Company Debenture and will rank pari passu with the Company Debenture.

Governing Law

        The Investment Guarantees will be governed by and construed in accordance with the laws of the State of New York.

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Eligible Debt Securities

        The LLC has invested 5% of the proceeds from the initial issuance of the LLC preferred securities and the managing member's contemporaneous capital contribution in Eligible Debt Securities. "Eligible Debt Securities" means cash or book-entry securities, negotiable instruments, or other securities of entities not affiliated with us represented by instruments in registered form which evidence any of the following: (a) any security issued or guaranteed as to principal or interest by the United States, or by a person controlled or supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States, or any certificate of deposit for any of the foregoing, (b) commercial paper issued pursuant to Section 3(a)(3) of the Securities Act and having, at the time of the investment or contractual commitment to invest therein, a rating from each of S&P and Moody's in the highest investment rating category granted by such rating agency and having a maturity not in excess of nine months, (c) demand deposits, time deposits and certificates of deposit that are fully insured by the Federal Deposit Insurance Corporation ("FDIC"), (d) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the Government of the United States of America or any agency or instrumentality thereof, the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company that is an Eligible Institution (as defined in this prospectus) and the deposits of which are insured by the FDIC and (e) any other security that is identified as a permitted investment of a finance subsidiary pursuant to Rule 3a-5 under the Investment Company Act at the time it is acquired by the LLC.

        "Eligible Institution" means a depository institution organized under the laws of the United States or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), (1) (i) that has either (A) a long-term unsecured debt rating of AA or better by S&P and Aa or better by Moody's or (B) a short-term unsecured debt rating or a certificate of deposit rating of A-1+ by S&P and P-1 by Moody's and (ii) the deposits of which are insured by the FDIC or (2) (i) the parent of which has a long-term or short-term unsecured debt rating that signifies investment grade and (ii) the deposits of which are insured by the FDIC.

Form of LLC Investments

        If the property trustee distributes the Affiliate Debt Instruments to the trust preferred and trust common securities holders upon the dissolution of the LLC and the trust, the Affiliate Debt Instruments will be issued in minimum denominations of $100,000 principal amount and integral multiples of $1,000 in excess thereof. We anticipate that the Affiliate Debt Instruments would be distributed in the form of one or more global securities and DTC, or any successor depositary for the trust preferred securities, would act as depositary for the Affiliate Debt Instruments. The depositary arrangements for the Affiliate Debt Instruments would be substantially similar to those in effect for the trust preferred securities.

        For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights, redemption and other notices and other matters, see "Description of the Trust Preferred Securities—Book-Entry Only Issuance—The Depository Trust Company."

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RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE LLC PREFERRED SECURITIES, THE AFFILIATE DEBT INSTRUMENTS AND THE GUARANTEES

Guarantee

        Payments of distributions and other amounts due on the trust preferred securities, LLC preferred securities and Affiliate Debt Instruments not issued by us are irrevocably guaranteed by the Company (to the extent the trust and LLC have funds available for the payment of such distributions, in the case of the trust preferred securities and LLC preferred securities) as set forth under "Description of the Trust Guarantee," "Description of the LLC Guarantee" and "Description of the LLC Investments—Affiliate Debt Instruments—Investment Guarantees." Taken together, our obligations under the trust guarantee, the LLC guarantee, the Company Debenture, any other Affiliate Debt Investments and any Investment Guarantees, and our obligations to pay all costs, expenses and liabilities of the trust and the LLC, provide a guarantee by us of payments of distributions and other amounts due on the trust preferred securities, other than payments of such amounts, if any, as the holders of trust preferred securities are entitled to receive in respect of the Eligible Debt Securities.

        If payments are not made under the Company Debenture or other Affiliate Debt Instruments and any related Investment Guarantees, the LLC and the trust may not have sufficient funds to pay distributions or other amounts due on the LLC preferred securities and trust preferred securities. The LLC guarantee and trust guarantee do not cover payment of distributions when the LLC or the trust do not have sufficient funds to pay such distributions. If the LLC does not have sufficient funds because payments have not been made when due on the Company Debenture or any other Affiliate Debt Instrument (except pursuant to the right to defer interest payments), a holder of trust preferred securities may institute a legal proceeding directly against the issuer of the Company Debenture or other Affiliate Debt Instrument to enforce payment of the Company Debenture or Affiliate Debt Instrument to the LLC in accordance with its terms.

        Our obligations under the trust guarantee, the LLC guarantee, the Company Debenture, any other Affiliate Debt Instruments and any Investment Guarantees are subordinate and junior in right of payment to all senior debt.

Sufficiency of Payments

        As long as payments of principal, interest and other payments are made when due on the Company Debenture and any other Affiliate Debt Instrument and any related Investment Guarantees, those payments, together with those amounts, if any, as the holders of trust preferred securities are entitled to receive in respect of the Eligible Debt Securities, will be sufficient to cover payments of the liquidation preference of and distributions on the LLC preferred securities, and therefore, the liquidation amount and distributions on the trust preferred securities, because of the following factors: the aggregate principal amount of the Company Debenture and any other Affiliate Debt Instrument will not be less than the aggregate liquidation preference of the LLC preferred securities held by the trust; the distributions to which the holders of the LLC preferred securities and the trust preferred securities are entitled will not exceed the amounts that are paid on the Company Debenture and other Affiliate Debt Instruments, together with such amounts, if any, as the holders of trust preferred securities are entitled to receive in respect of the Eligible Debt Securities; the payment dates of the LLC preferred securities and trust preferred securities will match the payment dates on the Company Debenture and other Affiliate Debt Instruments; we will pay, and the LLC and the trust will not be obligated to pay, all costs, expenses and liabilities of the LLC and the trust except the LLC's obligations under the LLC preferred securities and the trust's obligations under the trust securities; and the LLC Agreement and declaration of trust further provide that the LLC and the trust will not engage in any activity that is not consistent with the limited purposes of the LLC and the trust, respectively.

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        We have the right to set off any payment we are otherwise required to make under the Company Debenture or other Affiliate Debt Instruments with and to the extent we make a related payment under the trust guarantee, the LLC guarantee and any Investment Guarantee (collectively, the "guarantees").

Enforcement Rights of Holders of LLC Preferred Securities and Trust Preferred Securities

        If an LLC Enforcement Event occurs and is continuing, the holders of LLC preferred securities, by vote of a majority in aggregate liquidation preference of such holders (or, for so long as the LLC preferred securities are held by the property trustee, the property trustee as holder of the LLC preferred securities), will have the right to enforce the terms of the LLC Agreement and the LLC guarantee. If the Special Representative fails to enforce its rights on behalf of the LLC under the Affiliate Debt Instruments after a holder of LLC preferred securities has made a written request, such holder may on behalf of the LLC institute a legal proceeding against the issuer of any Affiliate Debt Instrument, or us as guarantor under the Investment Guarantee, as the case maybe, to enforce the LLC's rights. In addition, if any issuer of an Affiliate Debt Instrument has failed to make any required payment when due on the Affiliate Debt Instrument or we have failed to make any required payment when due on any Investment Guarantee, then a holder of trust preferred securities may on behalf of the LLC or the trust, as the case may be, directly institute a proceeding against such issuer with respect to such Affiliate Debt Instrument or against us with respect to such Investment Guarantee, in each case for enforcement of payment. The indenture trustees will give holders of Affiliate Debt Instruments notice of all events of default within 30 days after occurrence.

        If a Trust Enforcement Event occurs, the holders of trust preferred securities would rely on the enforcement by the property trustee of its rights as registered holder of LLC preferred securities. In addition, the holders of a majority in liquidation amount of the trust preferred securities will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the property trustee or to direct the exercise of any trust or power conferred upon the property trustee under the declaration of trust, including the right to direct the property trustee to exercise the remedies available to it as the holder of the LLC preferred securities and as Special Representative of the LLC.

        If the property trustee fails to enforce its rights as holder of the LLC preferred securities or as Special Representative of the LLC or, in the event the LLC has been dissolved, to enforce its rights on behalf of the trust under the Affiliate Debt Instruments and Investment Guarantees after a holder of trust preferred securities has made a written request, such holder may, to the extent permitted by applicable law, institute a legal proceeding against the LLC and the Special Representative or against any issuer of any Affiliate Debt Instrument, or us as guarantor, as the case maybe, to enforce the property trustee's rights. In addition, for so long as the trust is the holder of any LLC preferred securities, any Affiliate Debt Instrument or any Investment Guarantee, if any issuer of an Affiliate Debt Instrument has failed to make any required payment when due on any Affiliate Debt Instruments or we have failed to make any required payment when due on any Investment Guarantee, then a holder of trust preferred securities may on behalf of the LLC or the trust, as the case may be, directly institute a proceeding against such issuer with respect to such Affiliate Debt Instrument or against us with respect to such Investment Guarantee, in each case for enforcement of payment.

        In connection with such any direct action, we will have the right under the indenture to set off any payment made to such holder by us.

Limited Purposes of Trust and the LLC

        The trust preferred securities evidence beneficial ownership interests in the trust, and the trust exists for the sole purpose of issuing the trust securities and investing the proceeds thereof in LLC preferred securities. The LLC exists for the sole purpose of investing in the Affiliate Debt Instruments

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and Eligible Debt Securities as described under "Description of the LLC Investments." Neither the trust nor the LLC is permitted to incur any debt or other obligations.

Rights Upon Termination

        Upon any dissolution of the trust, the holders of the trust preferred securities will be entitled to receive, out of assets held by the trust, subject to the rights of any creditors of the trust, the trust liquidation amount in the form of cash or Affiliate Debt Instruments. Upon any voluntary or involuntary dissolution or bankruptcy of us or any other issuer of an Affiliate Debt Instrument, the holder of the Affiliate Debt Instrument would be a subordinated creditor of us or such other issuer, subordinated in right of payment to all of our or such other issuer's debt other than any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, the Affiliate Debt Instrument or certain indebtedness incurred in the ordinary course of business, but entitled to receive payment in full of principal and interest before any of our stockholders receive payments or distributions, except to the extent described under "Description of Trust Preferred Securities—Distributions—Subordination of Certain Distributions in Bankruptcy or Dissolution." Because we are the guarantor under the guarantees and have agreed to pay for all costs, expenses and liabilities of the LLC (other than the LLC's obligations to the holders of the LLC preferred securities) and the trust (other than the trust's obligations to the holders of the trust preferred securities), the positions of a holder of trust preferred securities and the LLC, as holder of the Affiliate Debt Instruments, relative to other creditors and to our stockholders in the event of our dissolution or bankruptcy would be substantially the same.

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

        The following is a summary of the material U.S. federal income tax consequences of the ownership of the trust preferred securities. Except where noted, this summary deals only with a trust preferred security held as a capital asset by a U.S. holder and it does not deal with special situations. For example, this summary does not address:

•

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, tax-exempt entities or insurance companies;



•

tax consequences to investors that are pass-through entities;



•

tax consequences to persons holding the trust preferred securities as part of a hedging, integrated, constructive sale or conversion transaction or a straddle;



•

tax consequences to holders of the trust preferred securities whose "functional currency" is not the U.S. dollar;



•

alternative minimum tax consequences, if any; or



•

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 prospectus. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed below.

        A "U.S. holder" means a person that is for U.S. federal income tax purposes any of the following:

•

an individual citizen or resident of the United States;



•

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



•

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or



•

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

        A "non-U.S. holder" is a beneficial owner of trust preferred securities (other than a partnership) that is not a U.S. holder. Special rules may apply to certain non-U.S. holders such as "controlled foreign corporations", "passive foreign investment companies" or, in certain circumstances, individuals who are U.S. expatriates. Such persons should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.

        If a partnership holds the trust preferred securities, 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 the trust preferred securities, you should consult your own tax advisors.

        No statutory, administrative or judicial authority addresses the treatment of the trust preferred securities or instruments similar to the trust preferred securities for U.S. federal income tax purposes and no rulings have been sought or are expected to be sought from the Internal Revenue Service (the "IRS") with respect to any of the U.S. federal income tax consequences regarding this particular

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offering. As a result, we cannot assure you that the IRS will agree with the tax characterizations and the tax consequences described below.

If you are a holder of trust preferred securities, you should consult your own tax advisors concerning the U.S. federal tax consequences in light of your particular situation and any consequences arising under the laws of any other taxing jurisdiction.

Classification of the Trust

        Tax Counsel is of the opinion that, under current law and assuming full compliance with the terms of the declaration of trust, and based on certain representations, the trust will not be treated as an association or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. It is intended that the trust will be treated as a grantor trust for U.S. federal income tax purposes. Under this treatment, holders will generally be treated as owning an undivided beneficial interest in the LLC preferred securities and thus required to include in gross income their allocable share of income attributable to the LLC preferred securities.

        There is no assurance that the IRS will agree with the treatment of the trust as a grantor trust and the IRS could assert that the trust is properly characterized as a partnership for U.S. federal income tax purposes. Such treatment could affect the amount, timing and character of income, gain or loss in respect of an investment in the trust preferred securities. Holders should consult their own advisors regarding the tax consequences of the trust being classified as a partnership for U.S. federal income tax purposes.

        By purchasing trust preferred securities, each holder agrees, and we, the trust and the LLC agree, to treat the trust as a grantor trust and holders of the trust preferred securities as holders of an undivided interest in the trust assets, including the LLC preferred securities, and not as holders of a direct interest in us or in any other person. The remainder of this discussion assumes that the trust will be treated as a grantor trust.

Classification of the LLC

        Tax Counsel is of the opinion that, under current law and assuming full compliance with the terms of the declaration of trust, and based on certain representations, the LLC will not be treated as an association or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. By purchasing the trust preferred securities, each holder of trust preferred securities agrees, and we, the trust and the LLC agree, to treat the LLC as a partnership for U.S. federal income tax purposes and to treat the LLC preferred securities as equity interests in such partnership and not as a direct interest in us or in any other person. If, however, the LLC were to constitute a publicly traded partnership taxable as a corporation, the LLC would be subject to U.S. federal income tax at the applicable corporate rates. The remainder of this discussion assumes that the LLC will be treated as a partnership.

Classification of the Company Debenture

        By purchasing the trust preferred securities, each holder agrees, and we, the trust, and the LLC agree to treat the Company Debenture as indebtedness for all U.S. federal income tax purposes. Tax Counsel has advised that, in its opinion, while the matter is not free from doubt, the Company Debenture will be characterized as indebtedness. However, such position is not binding on the IRS or the courts. Therefore, while Tax Counsel believes that its conclusions would be sustained if challenged, there can be no assurance that this will be the case.

        The transactions described in this prospectus are complex and other characterizations are possible. Any differing treatment arising from a recharacterization could affect the amount, timing and character

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of income, gain or loss in respect of an investment in the trust preferred securities. Unless indicated otherwise, the remainder of this discussion assumes that the Company Debenture will be classified as our indebtedness.

Income and Deductions

        As a partnership, the LLC will not be a taxable entity for U.S. federal income tax purposes. Instead, U.S. holders will generally be required to include in gross income for their taxable year in which the LLC's taxable year ends (or in the case of a U.S. holder that disposes of its entire interest in the trust preferred securities, the taxable year including the date of disposition) their distributive share of income on the Affiliate Debt Instruments and the Eligible Debt Securities and any other items of income, gain, loss, and deduction of the LLC. Unless payments of interest on the Affiliate Debt Instruments or distributions on the LLC preferred securities are deferred, a U.S. holder's distributive share of income will generally equal the amount of cash distributed with respect to the trust preferred securities. Holders that are individuals, trusts or estates may be subject to limitations on their pro rata share of expenses attributable to the LLC preferred securities.

        Income that accrues on the Affiliate Debt Instruments and Eligible Debt Securities will be allocated to holders of the trust preferred securities on a daily accrual basis, regardless of a U.S. holder's method of accounting. Distributions of cash, however, will generally not be separately taxable except to the extent that the cash received exceeds the holder's basis in the LLC preferred securities or trust preferred securities. If payments of interest on the Affiliate Debt Instruments or distributions on the LLC preferred securities are deferred, U.S. holders will generally recognize income in advance of the receipt of payments to which such income is attributable. No amount includible in income with respect to the trust preferred securities will be eligible for the dividends-received deduction.

Liquidation of the LLC

        Under certain circumstances, the LLC may be dissolved and a combination of Affiliate Debt Instruments and cash may be distributed to the trust. Such a dissolution would generally constitute a taxable exchange only to the extent a holder's share of the cash distributed exceeds such holder's basis in the trust preferred securities.

Sale or Redemption of Trust Preferred Securities for Cash

        If a holder sells its trust preferred securities or receives solely cash in redemption of the holder's interest in the Trust, it will recognize gain or loss equal to the difference between the amount realized on the sale or redemption of the trust preferred securities and its adjusted tax basis in its trust preferred securities sold or redeemed. Such gain or loss will be a capital gain or loss and generally will be a long-term capital gain or loss if the trust preferred securities have been held for more than one year. Long-term capital gains of individuals derived with respect to capital assets held for more than one year are subject to reduced rates of taxation. The deductibility of capital losses is subject to limitations.

Other Partnership Provisions

        Under section 708 of the Code, a partnership will be deemed to terminate for federal income tax purposes if 50% or more of the capital and profits interests in such partnership are sold or exchanged within a 12-month period. If such termination occurs, a partnership would be considered to transfer its assets and liabilities to a new partnership in exchange for interests in the new partnership and to distribute such interests to the partners. The LLC will not comply with certain technical requirements that might apply when such a constructive termination occurs. As a result, the LLC may be subject to certain tax penalties and may incur additional expenses if it is required to comply with those

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requirements. We have agreed to pay any taxes (other than withholding taxes except to the extent otherwise described in this prospectus) or other expenses of the LLC.

Information Reporting and Backup Withholding

        Income on the trust preferred securities will be reported to holders on an IRS Form 1099. Payments made on and proceeds from the sale of trust preferred securities may be subject to a backup withholding tax unless the holder complies with certain identification requirements. Any withheld amount generally will be allowed as a credit against the holder's U.S. federal income tax, provided the required information is timely filed with the IRS.

Non-U.S. Holders

        The LLC intends to conduct its affairs in such a manner that its income is not effectively connected with a U.S. trade or business and, accordingly, the LLC and trust do not intend to withhold tax applicable to effectively connected income for non-U.S. holders. However, should such withholding be required, the LLC and the trust may withhold the amounts from other distributions payable to the applicable holder.

        Because of the "portfolio interest" exception, the LLC and the trust intend not to withhold on distributions in respect of interest to a non-U.S. holder provided the non-U.S. holder (1) is not actually or constructively a "10 percent shareholder" of us, a "controlled foreign corporation" with respect to which we are a "related person" within the meaning of the Code, or a bank whose receipt of interest on the Affiliate Debt Instruments is described in section 881(c)(3)(A) of the Code, and (2) provides an appropriate statement, signed under penalties of perjury, certifying that the beneficial owner of the Affiliate Debt Instruments is a non-U.S. Holder and providing certain other information. It is possible that the Company Debenture might be recharacterized in which case a 30% withholding tax (or lower applicable treaty rate) could apply to payments on the Affiliate Debt Instruments or distributions on the trust preferred securities.

        Any gain realized on the sale, redemption, retirement or other taxable disposition of the trust preferred securities or LLC preferred securities will be exempt from U.S. federal income and withholding tax, provided that (1) the gain is not effectively connected with the conduct of a trade or business in the United States by such non-U.S. holder, and (2) in the case of a non-U.S. Holder that is a foreign individual, such non-U.S. holder is not present in the United States for 183 days or more in the taxable year.

        Trust preferred securities held by an individual non-U.S. holder at the time of death may be included in such holder's gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Non-U.S. holders of the trust preferred securities should consult their own tax advisors.

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CERTAIN ERISA CONSIDERATIONS

        The following is a summary of certain considerations associated with the purchase of the trust preferred securities by employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of the Code or ERISA (collectively, "Similar Laws"), and entities whose underlying assets are considered to include "plan assets" of such plans, accounts and arrangements (each, a "Plan").

General Fiduciary Matters

        ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an "ERISA Plan") and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.

        In considering an investment in the trust preferred securities (of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary's duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.

Prohibited Transaction Issues

        Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are "parties in interest," within the meaning of ERISA, or "disqualified persons," within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code.

        Whether or not the underlying assets of the Issuer were deemed to include "plan assets," as described below, the acquisition and/or holding of the trust preferred securities by an ERISA Plan with respect to which we or the trust are considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor (the "DOL") has issued prohibited transaction class exemptions, or "PTCEs," that may apply to the acquisition and holding of the trust preferred securities. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers, although there can be no assurance that all of the conditions of any such exemptions will be satisfied.

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Plan Asset Issues

        ERISA and the Code do not define "plan assets." However, regulations (the "Plan Asset Regulations") promulgated under ERISA by the DOL generally provide that when an ERISA Plan acquires an equity interest in an entity that is neither a "publicly-offered security" nor a security issued by an investment company registered under the Investment Company Act, the ERISA Plan's assets include both the equity interest and an undivided interest in each of the underlying assets of the entity unless it is established either that equity participation in the entity by "benefit plan investors" is not significant or that the entity is an "operating company," in each case as defined in the Plan Asset Regulations. For purposes of the Plan Asset Regulations, equity participation in an entity by benefit plan investors will not be significant if they hold, in the aggregate, less than 25% of the value of any class of such entity's equity, excluding equity interests held by persons (other than benefit plan investors) with discretionary authority or control over the assets of the entity or who provide investment advice for a fee (direct or indirect) with respect to such assets, and any affiliates thereof. For purposes of this 25% test, "benefit plan investors" include all employee benefit plans, whether or not subject to ERISA or the Code, including "Keogh" plans, individual retirement accounts and pension plans maintained by foreign corporations, as well as any entity whose underlying assets are deemed to include "plan assets" under the Plan Asset Regulations (e.g., an entity of which 25% or more of the value of any class of equity interests is held by benefit plan investors and which does not satisfy another exception under the Plan Asset Regulations). The DOL has stated that, in its view, for purposes of determining whether equity participation in an entity by benefit plan investors is "significant" within the meaning of the significant participation test contained within the Plan Asset Regulations, only the proportion of an insurance company general account's equity investment in the entity that represents plan assets should be taken into account and, therefore, the proportion of that investment that represents plan assets would equal the proportion of the insurance company general account as a whole that constitutes plan assets (59 FR 43134, 43136).

        For purposes of the Plan Asset Regulations, a "publicly offered security" is a security that is (a)"freely transferable," (b) part of a class of securities that is "widely held," and (c) (i) sold to the Plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act of 1933 and the class of securities to which such security is a part is registered under the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year of the issuer during which the offering of such securities to the public has occurred, or (ii) is part of a class of securities that is registered under Section 12 of the Exchange Act.

        It is not anticipated that (i) the trust preferred securities will constitute "publicly offered securities" for purposes of the Plan Asset Regulations, (ii) the trust will be an investment company registered under the Investment Company Act or (iii) the trust will qualify as an operating company within the meaning of the Plan Asset Regulations. In addition, if benefit plan investors were permitted to invest in the trust preferred securities, the trust would not be in a position to monitor whether investment in the trust preferred securities by benefit plan investors will be "significant" for purposes of the Plan Asset Regulations.

Plan Asset Consequences

        If the assets of the trust were deemed to be "plan assets" under ERISA, this would result, among other things, in (i) the application of the prudence and other fiduciary responsibility standards of ERISA to investments made by the trust, and (ii) the possibility that certain transactions in which the trust might seek to engage could constitute "prohibited transactions" under ERISA and the Code.

74

Representation

        Accordingly, by acceptance of the trust preferred securities, each purchaser and subsequent transferee of the trust preferred will be deemed to have represented and warranted either that (i) for the entire period during which such purchaser or transferee holds its interest in the trust preferred securities, no portion of such purchaser's or transferee's assets will constitute assets of any "employee benefit plan" within the meaning of Section 3(3) of ERISA, whether or not subject to Title I of ERISA, including any U.S. governmental or non-U.S. pension plan, or any "plan" subject to Section 4975 of the Code (each a "Covered Plan") or (ii) (x) the assets used by such purchaser or transferee to acquire the trust preferred securities constitute assets of an insurance company general account, (y) for the entire period during which such purchaser or transferee holds its interest in the trust preferred securities, less than 25% of the assets of such insurance company general account will constitute "plan assets" of any Covered Plan and (z) the acquisition and holding of the trust preferred securities by such purchaser or transferee will satisfy the requirements of DOL Prohibited Transaction Class Exemption 95-60 and will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

        The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the trust preferred securities on behalf of, or with the assets of, any employee benefit plan, consult with their counsel to determine whether such employee benefit plan is subject to Title I of ERISA, Section 4975 of the Code or any Similar Laws.

75

PLAN OF DISTRIBUTION

        This prospectus is to be used by Lehman Brothers Inc. in connection with offers and sales of the trust preferred securities in market-making transactions effected from time to time. Lehman Brothers Inc. may act as principal or agent in such transactions. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices.

        Lehman Brothers Inc. acted as initial purchaser in connection with the sale of the trust preferred securities and received customary fees. Lehman Brothers Inc. or their affiliates have in the past engaged, and may in the future engage, in transactions with and perform services for, including commercial banking, financial advisory and investment banking services, us and our affiliates in the ordinary course of business; and for which they have received customary fees and expenses.

        We have been advised by Lehman Brothers Inc. that, subject to applicable laws and regulations, they currently intend to make a market in the notes. However, Lehman Brothers Inc. is not obligated to do so, and any such market-making may be interrupted or discontinued at any time without notice.

LEGAL MATTERS

        Barrett S. DiPaolo, Associate General Counsel of Lehman Brothers Holdings, and Richards, Layton & Finger, P.A., Wilmington, Delaware, have rendered opinions to Lehman Brothers Holdings, the trust and the LLC regarding the validity of the securities to be offered by this prospectus. Mr. DiPaolo beneficially owns, or has rights to acquire under Lehman Brothers Holdings' employee benefit plans, an aggregate of less than 1% of Lehman Brothers Holdings' common stock. Simpson Thacher & Bartlett LLP, New York, New York has acted as special tax counsel ("Tax Counsel") to Lehman Brothers Holdings. Simpson Thacher & Bartlett LLP from time to time acts as counsel for Lehman Brothers Holdings and its subsidiaries

EXPERTS

        The consolidated financial statements and financial statement schedule of Lehman Brothers Holdings Inc. appearing in Lehman Brothers Holdings Inc.'s Annual Report (Form 10-K) for the year ended November 30, 2005 (including schedules appearing therein), and management's assessment of the effectiveness of internal control over financial reporting as of November 30, 2005 included therein, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements and management's assessment are, and audited consolidated financial statements and management's assessments of the effectiveness of internal control over financial reporting to be included in subsequently filed documents will be, incorporated herein in reliance upon the reports of Ernst & Young LLP pertaining to such consolidated financial statements and management's assessments to the extent covered by consents filed with the Securities and Exchange Commission, given on the authority of such firm as experts in accounting and auditing.

        With respect to the unaudited consolidated interim financial information of Lehman Brothers Holdings Inc. for the three-, six- and nine-month periods ended February 28, May 31 and August 31, 2006 and February 28, May 31 and August 31, 2005, incorporated herein by reference, Ernst & Young LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports dated April 10, July 10 and October 10, 2006, included in Lehman Brothers Holdings Inc.'s Quarterly Reports on Form 10-Q for the quarters ended February 28, May 31 and August 31, 2006, and incorporated by reference herein, state that they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited

76

nature of the review procedures applied. Ernst & Young LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited interim financial information because these reports are not a "report" or a "part" of the Registration Statement prepared or certified by Ernst & Young LLP within the meaning of Sections 7 and 11 of the Securities Act of 1933.

        The consolidated financial statements of Lehman Brothers Holdings E-Capital Trust I and financial statements of Lehman Brothers Holdings E-Capital LLC I appearing in Lehman Brothers Holdings E-Capital Trust I's and Lehman Brothers Holdings E-Capital LLC I's Annual Reports (Form 10-K) for the year ended December 31, 2005 (including schedules appearing therein) have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon., included therein, and incorporate herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

        Lehman Brothers Holdings, the trust and the LLC have filed a registration statement on Form S-3 under the Securities Act with the Commission, which is referred to as the "registration statement," with respect to the trust preferred securities offered hereby. This prospectus is a part of the registration statement and does not contain all of the information in the registration statement, which includes additional information. Statements made in this prospectus concerning the contents of documents referred to in this prospectus are not necessarily complete and in each case are qualified in all respects by reference to the copies of such documents filed as exhibits to the registration statement. You may review a copy of the registration statement at the Commission's public reference room or through the Commission's website, which are described below.

        We file annual, quarterly and current reports, proxy statements and other information with the Commission. The trust and the LLC file annual, quarterly and current reports with the Commission. You may read and copy these filings at the Commission's public reference room, which is located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. In addition, the filings are available to the public through the Commission's website at http://www.sec.gov.

        The following documents which we have filed with the Commission are hereby incorporated by reference in, and shall be deemed to be a part of, this prospectus:

•

Annual Report on Form 10-K, as amended by Form 10-K/A, for the year ended November 30, 2005;



•

Quarterly Report on Form 10-Q for the quarters ended February 28, 2006, May 31, 2006 and August 31, 2006;



•

Current Reports on Form 8-K, filed with the SEC on December 6, December 13 and December 15, 2005, January 17, January 23, January 26, February 10, February 21, February 24, March 3, March 10, March 15, March 16, March 24, March 28, March 31, April 4, April 24, May 3, May 24, May 30, May 31, June 12, June 29, July 3, July 21, July 26, August 3, August 16, August 30, September 13, September 15, and October 2, 2006; and



•

All documents filed with the Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (other than information in the documents or filings that is deemed to have been furnished and not filed) after the date of this prospectus and before termination of the offering of the trust preferred securities in market-making transactions.

77

        The following documents which the trust and LLC have filed with the Commission are hereby incorporated by reference in, and shall be deemed to be a part of, this prospectus:

•

Quarterly Report on Form 10-Q for the quarter ended June 30, 2006; and



•

All documents filed with the Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (other than information in the documents or filings that is deemed to have been furnished and not filed) after the date of this prospectus and before termination of the offering of the trust preferred securities in market-making transactions.

        References in this prospectus to this prospectus will be deemed to include the documents incorporated by reference, which are an integral part of this prospectus. You should obtain and review carefully copies of the documents incorporated by reference. Any statement contained in the documents incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in a subsequently dated document incorporated by reference or in this prospectus modifies or supersedes the statement. Information that we file later with the Commission will automatically update the information incorporated by reference and the information in this prospectus. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus. The information on our website and any other website that is referred to in this prospectus is not a part of this prospectus.

        You may request a copy of these filings and copies of the declaration of trust, the LLC Agreement, the trust guarantee, the LLC guarantee and the indenture, as amended by the supplemental indenture, at no cost, by writing or telephoning us at the following address:

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

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INDEX TO FINANCIAL STATEMENTS

	Page
Lehman Brothers Holdings E-Capital Trust I
As of December 31, 2005 and for the period from August 16, 2005 (Inception) to December 31, 2005
Consolidated Statement of Financial Condition	F-2
Consolidated Statement of Income	F-3
Consolidated Statement of Changes in Stockholder's Equity	F-4
Consolidated Statement of Cash Flows	F-5
Notes to Consolidated Financial Statements	F-6
Report of Independent Registered Public Accounting Firm	F-9
Lehman Brothers Holdings E-Capital LLC I
As of December 31, 2005 and for the period from August 16, 2005 (Inception) to December 31, 2005
Statement of Financial Condition	F-10
Statement of Income	F-11
Statement of Changes in Member's Capital	F-12
Statement of Cash Flows	F-13
Notes to Financial Statements	F-14
Report of Independent Registered Public Accounting Firm	F-16

F-1

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
Consolidated Statement of Financial Condition

In thousands, except for security amounts	December 31, 2005
Assets
Investment in LBHI junior subordinated debt	$	300,001
Commercial paper		16,023
Interest receivable		1,759
Total assets	$	317,783
Liabilities and Stockholder's Equity
Trust preferred securities (ECAPS)	$	300,000
Minority interest in consolidated subsidiary		16,023
Interest payable		1,759
Total liabilities		317,782
Stockholder's Equity
Trust common security 1 security authorized, issued, and outstanding; $1,000 liquidation amount		1
Total stockholder's equity		1
Total liabilities and stockholder's equity	$	317,783

See Notes to Consolidated Financial Statements.

F-2

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
Consolidated Statement of Income

In thousands For the period from August 16, 2005 (Inception) to December 31, 2005
Interest income	$	5,588
Interest expense		5,355
Minority interest expense		233
Total expenses		5,588
Net income	$	0

See Notes to Consolidated Financial Statements.

F-3

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
Consolidated Statement of Changes in Stockholder's Equity

In thousands For the period from August 16, 2005 (Inception) to December 31, 2005
Trust common security
	Beginning balance	$	0
	Issuance		1
	Ending balance		1
Total stockholder's equity		$	1

See Notes to Consolidated Financial Statements.

F-4

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I

Consolidated Statement of Cash Flows

In thousands For the period from August 16, 2005 (Inception) to December 31, 2005
Cash Flows From Operating Activities
Net income		$	0
Adjustments to reconcile net income to net cash used in operating activities:
	Accretion of interest income		(233	)
	Minority interest expense		233
Net change in:
	Investment in LBHI junior subordinated debt		(300,001	)
	Interest receivable		(1,759	)
	Interest payable		1,759
Net cash used in operating activities			(300,001	)
Cash Flows From Financing Activities
	Issuance of trust preferred securities (ECAPS)		300,000
	Contribution from minority interest		15,790
	Issuance of trust common security		1
Net cash provided by financing activities			315,791
Cash Flows From Investing Activities
	Purchase of commercial paper		(15,790	)
Net cash used in investing activities			(15,790	)
Net change in cash and cash equivalents			0
Cash and cash equivalents, beginning of period			0
Cash and cash equivalents, end of period		$	0
Supplemental Disclosure of Cash Flow Information (in thousands):
Interest paid totaled $3,596 in 2005.

See Notes to Consolidated Financial Statements.

F-5

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
Notes to Consolidated Financial Statements

1.    Organization and Purpose

        Lehman Brothers Holdings E-Capital Trust I (the "Trust") is a statutory business trust formed under the Delaware Business Trust Act, as amended, pursuant to the filing of a certificate of trust with the Secretary of State on August 16, 2005 and the execution of a declaration of trust dated as of August 19, 2005. The Trust exists for the exclusive purposes of (i) issuing trust securities, consisting of Floating Rate Enhanced Capital Advantage Preferred Securities (the "Trust Preferred Securities" or "ECAPS") and trust common securities (the "Trust Common Securities"), representing undivided beneficial ownership interests in the assets of the Trust, (ii) investing the gross proceeds of the trust securities in the preferred securities (the "LLC Preferred Securities") issued by Lehman Brothers Holdings E-Capital LLC I (the "LLC"), and (iii) engaging in only those other activities necessary or incidental thereto. Lehman Brothers Holdings Inc. ("LBHI") is the sole owner of the Trust Common Securities.

        LBHI paid all expenses related to the offering of the Trust Preferred Securities. LBHI also has agreed to (i) pay all fees and expenses related to the organization and operations of the Trust and LLC (including taxes (other than withholding taxes), duties, assessments, or government charges of whatever nature imposed by the United States of America or any other domestic taxing authority upon the Trust) and the offering of the Trust Preferred Securities and (ii) be responsible for all debts and other obligations of the Trust (other than with respect to the Trust Preferred Securities and the Trust Common Securities). LBHI has agreed to indemnify the trustees of the Trust and certain other persons.

2.    Summary of Significant Accounting Policies

Basis of Presentation

        The financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates that affect reported amounts. As such, actual results could differ from those estimates.

        Financial Accounting Standards Board ("FASB") Interpretation No. 46(R), "Consolidation of Variable Interest Entities (revised December 2003)—an interpretation of ARB No. 51" ("FIN 46(R)"), defines the criteria used in determining when a special purpose entity qualifies as a variable interest entity ("VIE"), and when that VIE should be consolidated. Under FIN 46(R), the LLC is deemed to be a VIE, and the Trust consolidates the LLC as its primary beneficiary. The primary beneficiary is the party that has either a majority of the expected losses or a majority of the expected residual returns of such entity, as defined.

Investments

        The investment in LBHI junior subordinated debt is carried at cost, with the related accrued interest receivable included in the Consolidated Statement of Financial Condition. The investment in commercial paper is carried at cost plus accrued interest in the Consolidated Statement of Financial Condition. The fair values of the investments approximate their carrying values.

Trust Preferred Securities

        The Trust Preferred Securities (ECAPS) are carried at cost, with the related accrued interest payable included in the Consolidated Statement of Financial Condition.

F-6

Minority Interest

        The minority interest as shown in the Consolidated Statement of Financial Condition represents the investment made by LBHI in the LLC. See Note 3 for additional information.

Revenue Recognition

        Interest income is recognized on an accrual basis and presented in the Consolidated Statement of Income.

Income Taxes

        The Trust is characterized as a grantor trust for United States federal income tax purposes and will not be taxed as a corporation. For income tax purposes, the holders' proportionate interests in any income or losses from the Trust are passed through to the holders of the Trust Preferred Securities and Trust Common Securities. Therefore, no provision for income taxes has been included in the consolidated financial statements.

3.    Trust Preferred Securities (ECAPS)

        The Trust issued $300 million of Trust Preferred Securities (ECAPS) and $1,000 of Trust Common Securities on August 19, 2005. The Trust used the offering proceeds to purchase $300 million of LLC Preferred Securities. Contemporaneous with the issuance of the LLC Preferred Securities, the LLC also issued common securities with an aggregate liquidation preference of $15.8 million, representing 5% of the total initial capital of the LLC (the "Minority Interest"). The LLC used the proceeds from the issuance of the LLC Preferred Securities and Minority Interest to purchase a LBHI floating rate subordinated debenture due 2035 (the "Company Debenture") in a principal amount of $300,001,000 and certain U.S. government obligations and commercial paper of entities not affiliated with LBHI and its subsidiaries (the "Eligible Debt Securities").

        Holders of the Trust Preferred Securities (ECAPS) receive distributions of their pro rata portion of any cash payments received by the Trust on the LLC Preferred Securities. Distributions on the LLC Preferred Securities accumulate from August 19, 2005, the date of original issuance of the old LLC Preferred Securities, and are payable quarterly in arrears on each February 19, May 19, August 19 and November 19 (or the next succeeding business day if not a business day), at an annual rate of 3-month LIBOR for the related distribution period plus a margin equal to 0.78% until August 19, 2010 and at an annual rate of 3-month LIBOR plus a margin equal to 1.78% from August 19, 2010 until August 19, 2035, and thereafter as set forth in the limited liability company agreement of the LLC. The LLC is entitled to receive interest payments on the Company Debenture on the same dates and in the same amounts until its maturity on August 19, 2035. Distributions on the Minority Interest accumulate at an annual rate of 3-month LIBOR for each distribution period plus a margin equal to 2.78% until August 19, 2010 and thereafter at an annual rate of 3-month LIBOR plus a margin equal to 3.78%. If earnings on the Company Debenture and the Eligible Debt Securities exceed the aggregate amounts payable on the LLC Preferred Securities and the Minority Interest as described above, 50% of such excess will be distributed on the LLC Preferred Securities and the balance will be distributed on the Minority Interest.

        The LLC Preferred Securities are redeemable for cash, at the option of LBHI as the managing member of the LLC, in whole or in part, from time to time after August 19, 2010, at an amount per LLC Preferred Security equal to the $1,000 liquidation preference plus accumulated and unpaid

F-7

distributions on a compounded basis (the "Redemption Price"). Upon any redemption of the LLC Preferred Securities, the Trust Preferred Securities and Trust Common Securities will be redeemed on a pro rata basis and the Trust Preferred Securities will be redeemed at a corresponding Redemption Price. Neither the LLC Preferred Securities nor the Trust Preferred Securities are redeemable at any time at the option of the holders thereof.

        LBHI has guaranteed, on a subordinated basis, the payment in full of all distributions and other payments on the Trust Preferred Securities to the extent that the Trust has funds available therefor.

        Generally, holders of the Trust Preferred Securities will not have any voting rights.

4.    Concentration of Credit Risk

        The credit risk of the Trust principally relates to LBHI as issuer of the Company Debenture, and the possibility of LBHI's non-performance in fulfilling its contractual obligations pursuant to this transaction.

5.    Related Parties

        On November 21, 2005, the LLC received its scheduled interest payment on the Company Debenture at an annual rate of 4.59% (approximately $3.6 million in the aggregate) and paid the same amount on the LLC preferred securities to the Trust.

        In addition, LBHI has guaranteed certain payments as described in Note 3.

F-8

Report of Independent Registered Public Accounting Firm

The Trustees of Lehman Brothers Holdings E-Capital Trust I and the Board of Directors of Lehman Brothers Holdings Inc.

        We have audited the accompanying consolidated statement of financial condition of Lehman Brothers Holdings E-Capital Trust I (the "Company") as of December 31, 2005, and the related consolidated statements of income, changes in stockholder's equity and cash flows for the period from August 16, 2005 (inception) to December 31, 2005. These financial statements are the responsibility of the trustees of the Company and management of Lehman Brothers Holdings Inc. Our responsibility is to express an opinion on these financial statements based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Lehman Brothers Holdings E-Capital Trust I at December 31, 2005, and the consolidated results of its operations and its cash flows for the period from August 16, 2005 (inception) to December 31, 2005, in conformity with U.S. generally accepted accounting principles.

New York, New York

May 10, 2006

F-9

LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I

Statement of Financial Condition

In thousands	December 31, 2005
Assets
Investment in LBHI junior subordinated debt	$	300,001
Commercial paper		16,023
Interest receivable		1,759
Total assets	$	317,783
Liabilities and Member's Capital
LLC preferred securities	$	300,001
Interest payable		1,759
Total liabilities		301,760
Member's Capital
Contributed capital		15,790
Retained earnings		233
Total member's capital		16,023
Total liabilities and member's capital	$	317,783

See Notes to Financial Statements.

F-10

LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I

Statement of Income

In thousands For the period from August 16, 2005 (Inception) to December 31, 2005
Interest income	$	5,588
Interest expense		5,355
Net income	$	233

See Notes to Financial Statements.

F-11

LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I
Statement of Changes in Member's Capital

In thousands For the period from August 16, 2005 (Inception) to December 31, 2005
Contributed capital
	Beginning balance	$	0
	Contribution		15,790
	Ending balance		15,790
Retained earnings
	Beginning balance		0
	Net income		233
	Ending balance		233
Total member's capital		$	16,023

See Notes to Financial Statements.

F-12

LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I
Statement of Cash Flows

In thousands For the period from August 16, 2005 (Inception) to December 31, 2005
Cash Flows From Operating Activities
Net income		$	233
Adjustments to reconcile net income to net cash used in operating activities:
	Accretion of interest income		(233	)
Net change in:
	Investment in LBHI junior subordinated debt		(300,001	)
	Interest receivable		(1,759	)
	interest payable		1,759
Net cash used in operating activities			(300,001	)
Cash Flows From Financing Activities
	Issuance of LLC preferred securities		300,001
	Contributed capital		15,790
Net cash provided by financing activities			315,791
Cash Flows From Investing Activities
	Purchase of commercial paper		(15,790	)
Net cash used in investing activities			(15,790	)
Net change in cash and cash equivalents			0
Cash and cash equivalents, beginning of period			0
Cash and cash equivalents, end of period		$	0
Supplemental Disclosure of Cash Flow Information (in thousands):
Interest paid totaled $3,596 in 2005.

See Notes to Financial Statements.

F-13

LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I

Notes to Financial Statements

1.     Organization and Purpose

        Lehman Brothers Holdings E-Capital LLC I (the "LLC") is a limited liability company formed under the Delaware Limited Liability Company Act, as amended, pursuant to the filing of a certificate of formation with the Secretary of State on August 16, 2005 and the execution of a limited liability company agreement dated as of August 19, 2005. Lehman Brothers Holdings Inc. ("LBHI") is the sole managing member of the LLC. Upon the issuance of the LLC preferred securities to Lehman Brothers Holdings E-Capital Trust I (the "Trust"), which securities represent preferred interests in the LLC (the "LLC Preferred Securities"), the Trust became the sole non-managing member of the LLC. Contemporaneous with the issuance of the LLC Preferred Securities, LBHI as managing member contributed capital to the LLC in an amount equal to 5% of the total initial capital of the LLC for its purchase of the common securities of the LLC (the "LLC Common Securities"). The LLC exists for the sole purpose of (i) issuing its interests, (ii) investing the proceeds thereof in LBHI junior subordinated debt ("Affiliate Debt Instruments") and certain U.S. government obligations and commercial paper of entities not affiliated with LBHI and its subsidiaries (the "Eligible Debt Securities"), and (iii) engaging in only those other activities necessary or incidental thereto.

        LBHI has agreed to (i) pay all fees and expenses related to the organization and operations of the LLC, including taxes (other than withholding taxes), duties, assessments, or government charges of whatever nature imposed by the United States of America or any other domestic taxing authority upon the LLC, and (ii) be responsible for all debts and other obligations of the LLC, other than with respect to the LLC Preferred Securities and the LLC Common Securities.

2.     Summary of Significant Accounting Policies

Basis of Presentation

        The financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates that affect reported amounts. As such, actual results could differ from those estimates.

Investments

        The investment in LBHI junior subordinated debt is carried at cost, with the related accrued interest receivable included in the Statement of Financial Condition. The investment in commercial paper is carried at cost plus accrued interest in the Statement of Financial Condition. The fair values of the investments approximate their carrying values.

LLC Preferred Securities

        The LLC Preferred Securities are carried at cost, with the related accrued interest payable included in the Statement of Financial Condition.

Revenue Recognition

        Interest income is recognized on an accrual basis and presented in the Statement of Income.

Income Taxes

        The LLC is characterized for United States federal income tax purposes as a partnership and will not be taxed as a corporation. For income tax purposes, the holders' proportionate interests in any income or losses from the LLC are passed through to the holders of the LLC Preferred Securities and LLC Common Securities. Therefore, no provision for income taxes has been included in the financial statements.

F-14

3.     LLC Preferred Securities

        The LLC issued $300 million of LLC Preferred Securities, which were purchased by the Trust. Contemporaneous with the issuance of the LLC Preferred Securities, the LLC also issued LLC Common Securities with an aggregate liquidation preference of $15.8 million, representing 5% of the total initial capital of the LLC. The LLC used the proceeds from the issuance of the LLC Preferred and Common Securities to purchase a Lehman Brothers Holdings Inc. ("LBHI") floating rate subordinated debenture due 2035 (the "Company Debenture") in a principal amount of $300,001,000 and Eligible Debt Securities.

        Distributions on the LLC Preferred Securities accumulate from August 19, 2005, the date of original issuance of the old LLC Preferred Securities, and are payable quarterly in arrears on each February 19, May 19, August 19 and November 19 (or the next succeeding business day if not a business day), at an annual rate of 3-month LIBOR for the related distribution period plus a margin equal to 0.78% until August 19, 2010 and at an annual rate of 3-month LIBOR plus a margin equal to 1.78% from August 19, 2010 until August 19, 2035, and thereafter as set forth in the limited liability company agreement of the LLC. The LLC is entitled to receive interest payments on the Company Debenture on the same dates and in the same amounts until its maturity on August 19, 2035. Distributions on the LLC Common Securities accumulate at an annual rate of 3-month LIBOR for each distribution period plus a margin equal to 2.78% until August 19, 2010 and thereafter at an annual rate of 3-month LIBOR plus a margin equal to 3.78%. If earnings on the Company Debenture and the Eligible Debt Securities exceed the aggregate amounts payable on the LLC Preferred Securities and the LLC Common Securities as described above, 50% of such excess will be distributed on the LLC Preferred Securities and the balance will be distributed on the LLC Common Securities.

        The LLC Preferred Securities are redeemable for cash, at the option of LBHI as the managing member of the LLC, in whole or in part, from time to time after August 19, 2010, at an amount per LLC Preferred Security equal to the $1,000 liquidation preference plus accumulated and unpaid distributions on a compounded basis (the "Redemption Price"). The LLC Preferred Securities are not redeemable at any time at the option of the holders.

        LBHI has guaranteed, on a subordinated basis, the payment in full of all distributions and other payments on the LLC Preferred Securities to the extent that the LLC has funds available therefor.

4.     Concentration of Credit Risk

        The credit risk of the LLC principally relates to LBHI as issuer of the Company Debenture, and the possibility of LBHI's non-performance in fulfilling its contractual obligations pursuant to this transaction.

5.     Related Parties

        On November 21, 2005, the LLC received its scheduled interest payment on the Company Debenture at an annual rate of 4.59% (approximately $3.6 million in the aggregate) and paid the same amount on the LLC preferred securities to the Trust.

        In addition, LBHI has guaranteed certain payments as described in Note 3.

F-15

Report of Independent Registered Public Accounting Firm

The Managing Member of Lehman Brothers Holdings E-Capital LLC I and the Board of Directors of Lehman Brothers Holdings Inc.

        We have audited the accompanying statement of financial condition of Lehman Brothers Holdings E-Capital LLC I (the "Company") as of December 31, 2005, and the related statements of income, changes in member's capital and cash flows for the period from August 16, 2005 (inception) to December 31, 2005. These financial statements are the responsibility of the managing member of the Company and management of Lehman Brothers Holdings Inc. Our responsibility is to express an opinion on these financial statements based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lehman Brothers Holdings E-Capital LLC I at December 31, 2005, and the result of its operations and its cash flows for the period from August 16, 2005 (inception) to December 31, 2005, in conformity with U.S. generally accepted accounting principles.

New York, New York

May 10, 2006

F-16

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
(ECAPS^SM)

FLOATING RATE
ENHANCED CAPITAL ADVANTAGED PREFERRED SECURITIES
(Liquidation amount $1,000 per trust preferred security)
guaranteed, to the extent set forth herein, by

LEHMAN BROTHERS HOLDINGS INC.

PROSPECTUS
NOVEMBER 3, 2006

LEHMAN BROTHERS

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.    Other Expenses of Issuance And Distribution

        The following are the estimated expenses to be incurred and paid by the Registrants in connection with the offerings described in this Registration Statement (other than underwriting discounts and commissions).

SEC registration fee		$	*
NASD fee			75,500
Rating Agency fees			1,000,000
Exchange listing fees			250,000
Legal fees and expenses			500,000
Accounting fees and expenses			200,000
Transfer Agent and Trustees fees and expenses			650,000
Blue Sky qualification fees and expenses			15,000
Printing and engraving fees and expenses			600,000
Miscellaneous fees and expenses			404,500
	Total	$	*

*

Deferred in reliance upon Rules 456(b) and 457(r).

Item 15.    Indemnification of Directors and Officers

        Lehman Brothers is a Delaware corporation. Section 145 of the General Corporation Law of the State of Delaware empowers a Delaware corporation to indemnify any persons who are, or are threatened to be made, parties to any threatened, pending, or completed legal action, suit, or proceedings, whether civil, criminal, administrative, or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding, provided that such officer or director acted in good faith and in a manner such person reasonably believed to be in or not opposed to the corporation's best interests, and, for criminal proceedings, had no reasonable cause to believe such person's conduct was illegal, provided that, in an action by or in the right of a corporation, a corporation may indemnify only for expenses and no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation in the performance of such person's duty. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, Lehman Brothers must indemnify such person against the expenses which such officer or director actually and reasonably incurred.

        Lehman Brothers' certificate of incorporation provides that the liability of Lehman Brothers' directors to Lehman Brothers or to Lehman Brothers' stockholders for monetary damages for breach of fiduciary duty will be eliminated to the fullest extent permissible under Delaware law except for (a) breaches of duty of loyalty to Lehman Brothers or its stockholders, (b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) the payment of unlawful dividends or unlawful stock repurchases or redemptions or (d) for any transaction from which the director derives an improper personal benefit.

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        The effect of these provisions is to eliminate the rights of Lehman Brothers and its stockholders to recover monetary damages against a director for breach of fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in certain limited situations. These provisions do not limit or eliminate the rights of Lehman Brothers or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director's fiduciary duty of care. In addition, these provisions do not alter the liability of directors under federal securities law.

        Lehman Brothers' by-laws provide that Lehman Brothers will indemnify each present and former director or officer of Lehman Brothers to the full extent and in the manner permitted by Delaware law.

        Lehman Brothers has purchased liability insurance for its officers and directors as permitted by Section 145 of the General Corporation Law of the State of Delaware.

        The Declaration of each Trust also provides that Lehman Brothers Holdings will indemnify, to the full extent permitted by law, any Regular Trustee, affiliate of any Regular Trustee or any officers, directors, shareholders, members, partners, employees, representatives or agents of any Regular Trustee or any affiliate thereof; or any officer, employee or agent of such Trust or its affiliates (each, a "Debenture Issuer Indemnified Person") who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such Trust) by reason of the fact that he is or was a Debenture Issuer Indemnified Person against expenses (including attorney fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of such Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Debenture Issuer Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of such Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The Declaration of each Trust also provides that Lehman Brothers Holdings shall indemnify, to the full extent permitted by law, any Debenture Issuer Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was a Debenture Issuer Indemnified Person against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Debenture Issuer Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper. The Declaration of each Trust further provides that expenses (including attorneys' fees) incurred by a Debenture Issuer Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in the immediately preceding two sentences shall be paid by Lehman Brothers Holdings in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Debenture Issuer Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by Lehman Brothers Holdings as authorized in the Declaration.

        The LLC Agreement provides that Lehman Brothers Holdings will indemnify, to the fullest extent permitted by law, any Special Representative, any affiliate of Lehman Brothers Holdings or any Special

II-2

Representative and any officers, directors, shareholders, members, partners, employees, representatives or agents of Lehman Brothers Holdings or any Special Representative, or any of their respective affiliates, or any representative, employee or agent of the LLC (each, an "Indemnified Person") against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the LLC and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by the LLC Agreement, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of gross negligence or willful misconduct with respect to such acts or omissions. To the fullest extent permitted by law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Managing Member prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Managing Member of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in the LLC Agreement.

        Any underwriting agreement or agency agreement with respect to an offering of securities registered hereunder will provide for indemnification of Lehman Brothers Holdings and its officers and directors and the Trustees who signed this Registration Statement by the underwriters or agents, as the case may be, against certain liabilities including liabilities under the Securities Act of 1933 (the "Act").

Item 16.    Exhibits

        The Exhibit Index beginning on page E-1 is hereby incorporated by reference.

Item 17.    Undertakings

        Each of the undersigned Registrants hereby undertakes:

a)

1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:



i)

to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the "Act");



ii)

to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and



iii)

to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that the undertakings set forth in paragraphs (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by Lehman Brothers Holdings pursuant to Section 13 or Section 15(d) of the Securities Exchange

II-3

Act of 1934 that are incorporated by reference in the Registration Statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.

2)

That, for the purpose of determining any liability under the Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.



4)

That, for the purpose of determining liability under the Act to any purchaser:



i)

Each prospectus filed by the Registrants pursuant to Rule 424(b)(3) shall be deemed to be part of the Registration Statement as of the date the filed prospectus was deemed part of and included in the Registration Statement; and



ii)

Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Act shall be deemed to be part of and included in the Registration Statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the Registration Statement relating to the securities in the Registration Statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such effective date.



5)

That, for the purpose of determining liability of the Registrants under the Act to any purchaser in the initial distribution of the securities:

The undersigned Registrants undertake that in a primary offering of securities of the undersigned Registrants pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrants will be sellers to the purchaser and will be considered to offer or sell such securities to such purchaser:

i)

Any preliminary prospectus or prospectus of the undersigned Registrants relating to the offering required to be filed pursuant to Rule 424;



ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrants or used or referred to by the undersigned Registrants;



iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrants or its securities provided by or on behalf of the undersigned Registrants; and

II-4

iv)

Any other communication that is an offer in the offering made by the undersigned Registrants to the purchaser.

b)

That, for purposes of determining any liability under the Act, each filing of Lehman Brothers Holdings' annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

c)

Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described under Item 15 above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-5

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, Lehman Brothers Holdings Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on November 3, 2006.

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Vice President

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

Dated: November 3, 2006

Signature	Title
* Richard S. Fuld Jr.	Chairman of the Board of Directors and Chief Executive Officer (principal executive officer)
* Christopher M. O'Meara	Chief Financial Officer, Controller and Executive Vice President (principal financial and accounting officer)
* Michael L. Ainslie	Director
* John E. Akers	Director
* Roger S. Berlind	Director
* Thomas H. Cruikshank	Director
* Marsha Johnson Evans	Director

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* Sir Christopher Gent	Director
* Roland A. Hernandez	Director
* Henry Kaufman	Director
* John D. Macomber	Director

*By:
/s/  BARRETT S. DIPAOLO Name: Barrett S. DiPaolo
Title: Attorney-in-fact

II-7

        Pursuant to the requirements of the Securities Act of 1933, Lehman Brothers Holdings Capital Trust VII, Lehman Brothers Holdings Capital Trust VIII, Lehman Brothers Holdings Capital Trust IX, Lehman Brothers Holdings Capital Trust X, Lehman Brothers Holdings Capital Trust XI, Lehman Brothers Holdings Capital Trust XII, Lehman Brothers Holdings E-Capital Trust I and Lehman Brothers Holdings E-Capital LLC I each certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on November 3, 2006.

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VI
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Trustee
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Trustee
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST IX
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Trustee

II-8

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST X
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Trustee
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST XI
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Trustee
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST XII
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Trustee
By:	/s/  JAMES J. KILLERLANE James J. Killerlane Trustee

II-9

LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
By:	/s/  KAREN B. CORRIGAN Karen B. Corrigan Regular Trustee
By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Regular Trustee
By:	/s/  JEFFREY A. WELIKSON Jeffrey A. Welikson Regular Trustee

LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I
By:	LEHMAN BROTHERS HOLDINGS INC., as Managing Member
	By:	/s/  BARRETT S. DIPAOLO Barrett S. DiPaolo Vice President

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EXHIBIT INDEX

1.01	Form of underwriting agreement for debt securities*
1.02	Form of underwriting agreement (including delayed delivery contract) for debt securities, warrants, purchase contracts and units*
1.03	Form of underwriting agreement for preferred stock*
1.04	Form of underwriting agreement for depositary shares**
1.05	Form of underwriting agreement for common stock*
1.06	Form of underwriting agreement for trust preferred securities*
1.07	Form of Distribution Agreement for Medium Term Notes of Lehman Brothers Holdings Inc.**
1.08	Form of Distribution Agreement for Lehman Notes of Lehman Brothers Holdings Inc.**
4.01	Standard multiple series indenture provisions with respect to the senior and subordinated debt securities—Incorporated by reference to Exhibit 4(a) of Post-Effective Amendment No. 1 to Registration Statement (No. 33-16141) filed with the SEC on November 16, 1987
4.02	Indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(b) of Post-Effective Amendment No. 1 to Registration Statement (No. 33-16141) filed with the SEC on November 16, 1987
4.03	First supplemental indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(m) of Registration Statement (No. 33-25797) filed with the SEC on November 25, 1988
4.04	Second supplemental indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(e) of Registration Statement (No. 33-49062) filed with the SEC on June 30, 1992
4.05	Third supplemental indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(f) of Registration Statement (No. 33-46146) filed with the SEC on March 10, 1992
4.06	Fourth supplemental indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(f) of Form 8-A filed with the SEC on October 7, 1993
4.07	Fifth supplemental indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(h) of Post-Effective Amendment No. 1 to Registration Statement (No. 33-56615) filed with the SEC on August 24, 1995
4.08	Sixth supplemental indenture with respect to the senior debt securities—Incorporated by reference to Exhibit 4(h) of S-3 Registration Statement (No. 333-38227) filed with the SEC on October 17, 1997
4.09	Form of senior debt security—fixed rate note—Incorporated by reference to Exhibit 4.09 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.10	Form of senior debt security—variable rate note—Incorporated by reference to Exhibit 4.10 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.11	Form of senior debt security—zero coupon note—Incorporated by reference to Exhibit 4.1 of Current Report on Form 8-K filed with the SEC on April 27, 1988

E-1

4.12	Form of senior debt security—index note—Incorporated by reference to Exhibit 4.12 of S-3 Registration Statement (No. 333-61878) filed with the SEC on May 30, 2001
4.13	Form of senior debt security—medium-term note (fixed rate)**
4.14	Form of senior debt security—medium-term note (floating rate)**
4.15	Senior debt security—medium term note—(Lehman Notes—master note)**
4.16	Form of senior debt security—medium term note (Synthetic Convertibles)**
4.17	Form of senior debt security—medium term note (YEELDS)**
4.18	Form of senior debt security—medium term note (RANGERS)**
4.19	Form of senior debt security—medium term note (RANGERS Plus)**
4.20	Form of senior debt security—medium-term note (indexed)*
4.21	Indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 2 of Form 8-A filed with the SEC on February 8, 1996
4.22	First supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 3 of Form 8-A filed with the SEC on February 8, 1996
4.23	Second supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.1 of Form 8-K filed with the SEC on January 27, 1999
4.24	Third supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.1 of Form 8-K filed with the SEC on April 20, 1999
4.25	Fourth supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.01 of Form 8-K filed with the SEC on March 17, 2003
4.26	Fifth supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.01 of Form 8-K filed with the SEC on October 31, 2003
4.27	Sixth supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.01 of Form 8-K filed with the SEC on April 22, 2004
4.28	Seventh supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.01 of Form 8-K filed with the SEC on January 18, 2005
4.29	Eighth supplemental indenture with respect to the subordinated debt securities—Incorporated by reference to Exhibit 4.04 of Registration Statement on Form S-4 (No. 333-129195-02) filed with the SEC on October 21, 2005
4.30	Form of subordinated debt security—Incorporated by reference to Exhibit 4.17 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.31	Form of subordinated debt security to be issued to each trust—Incorporated by reference to Exhibit 4.18 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.32	Certificate(s) of designations with respect to the offered preferred stock*
4.33	Form of deposit agreement with respect to the depositary shares (including the form of depositary receipt to be issued thereunder)—Incorporated by reference to Exhibit 4.20 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.34	Form of Warrant Agreement, including form of warrant.*
4.35	Form of Prepaid Unit Agreement, including form of prepaid unit certificate.*

E-2

4.36	Form of Non-Prepaid Unit Agreement.*
4.37	Form of Prepaid Purchase Contract.*
4.38	Form of Non-Prepaid Purchase Contract.*
4.39	Specimen of certificate representing Lehman Brothers Holdings Inc.'s common stock, par value $0.10 per share —Incorporated by reference to Exhibit 4.9 of S-4 Registration Statement (No. 333-108025) filed with the SEC on September 17, 2003
4.40	Certificate of Trust of Lehman Brothers Holdings Capital Trust VII—Incorporated by reference to Exhibit 4.34 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.41	Certificate of Trust of Lehman Brothers Holdings Capital Trust VIII—Incorporated by reference to Exhibit 4.35 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.42	Certificate of Trust of Lehman Brothers Holdings Capital Trust IX—Incorporated by reference to Exhibit 4.36 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.43	Certificate of Trust of Lehman Brothers Holdings Capital Trust X—Incorporated by reference to Exhibit 4.37 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.44	Certificate of Trust of Lehman Brothers Holdings Capital Trust XI—Incorporated by reference to Exhibit 4.38 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.45	Certificate of Trust of Lehman Brothers Holdings Capital Trust XII—Incorporated by reference to Exhibit 4.39 of S-3 Registration Statement (No. 333-12106) filed with the SEC on May 17, 2005
4.46	Declaration of Trust of Lehman Brothers Holdings Capital Trust VII—Incorporated by reference to Exhibit 4.40 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.47	Declaration of Trust of Lehman Brothers Holdings Capital Trust VIII—Incorporated by reference to Exhibit 4.41 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.48	Declaration of Trust of Lehman Brothers Holdings Capital Trust IX—Incorporated by reference to Exhibit 4.42 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.49	Declaration of Trust of Lehman Brothers Holdings Capital Trust X—Incorporated by reference to Exhibit 4.43 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.50	Declaration of Trust of Lehman Brothers Holdings Capital Trust XI—Incorporated by reference to Exhibit 4.44 of S-3 Registration Statement (No. 333-12106) filed with the SEC on December 8, 2004
4.51	Declaration of Trust of Lehman Brothers Holdings Capital Trust XII—Incorporated by reference to Exhibit 4.45 of S-3 Registration Statement (No. 333-12106) filed with the SEC on May 17, 2005

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4.52	Form of Amended and Restated Declaration of Trust for each trust (including the forms of preferred security and common security to be issued thereunder)—Incorporated by reference to Exhibit 4.31 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.53	Form of Guarantee with respect to the preferred securities of each trust—Incorporated by reference to Exhibit 4.32 of S-3 Registration Statement (No. 333-60474) filed with the SEC on May 9, 2001
4.54	Restated Certificate of Incorporation of Lehman Brothers Holdings dated October 10, 2006—Incorporated by reference to Exhibit 3.04 to Quarterly Report on Form 10-Q filed with the SEC on October 10, 2006
4.55	Amended and Restated By-Laws of Lehman Brothers Holdings, amended as of April 5, 2006—Incorporated by reference to Exhibit 3.09 of Quarterly Report on Form 10-Q filed with the SEC on April 10, 2006
4.56	Certificate of Formation of Lehman Brothers Holdings E-Capital LLC I—Incorporated by reference to Exhibit 4.05 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.57	Limited Liability Company Agreement of Lehman Brothers Holdings E-Capital LLC I, dated as of August 19, 2005 —Incorporated by reference to Exhibit 4.06 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.58	Amendment No. 1, dated as of May 3, 2006, to Limited Liability Company Agreement of Lehman Brothers Holdings E-Capital LLC I, dated as of August 19, 2005—Incorporated by reference to Exhibit 4.07 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on May 10, 2006
4.59	Certificate of Trust of Lehman Brothers Holdings E-Capital Trust I—Incorporated by reference to Exhibit 4.07 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.60	Declaration of Trust of Lehman Brothers Holdings E-Capital Trust I, dated as of August 19, 2005—Incorporated by reference to Exhibit 4.08 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.61	LLC Guarantee Agreement, dated as of August 19, 2005—Incorporated by reference to Exhibit 4.09 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.62	Trust Guarantee Agreement, dated as of August 19, 2005—Incorporated by reference to Exhibit 4.10 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.63	Forms of global certificate of trust preferred security—Included in Exhibit 4.70 above
4.64	Certificate of trust common security—Incorporated by reference to Exhibit 4.12 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
4.65	Form of certificate of LLC preferred security (included in Exhibit 4.68 above)
4.66	Form of junior subordinated deferrable interest debenture due 2035 (included in Exhibit 4.29 above)
5.01	Opinion and consent of Barrett S. DiPaolo, Associate General Counsel of Lehman Brothers Holdings, as to the validity of the debt securities, warrants, purchase contracts, preferred stock, depositary shares, common stock, units, and guarantees being registered**

E-4

5.02	Opinion and consent of Barrett S. DiPaolo, Associate General Counsel of Lehman Brothers Holdings, as to the validity of the Floating Rate Enhanced Capital Advantaged Preferred Securities
5.03	Opinion and consent of Richards, Layton & Finger, P.A., as to the validity of the trust preferred securities being registered
5.04	Opinion and consent of Richards, Layton & Finger, P.A., as to the validity of the Enhanced Capital Advantaged Preferred Securities—Incorporated by reference to Exhibit 5.01 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005)
8.01	Opinion and consent of Simpson Thacher & Bartlett LLP regarding certain tax matters**
8.02	Opinion and consent of Simpson Thacher & Bartlett LLP regarding certain tax matters of the Floating Rate Enhanced Capital Advantaged Preferred Securities
12.01	Computation in support of ratio of earnings to fixed charges—Incorporated by reference to Exhibit 12.01 of Annual Report on Form 10-K for the fiscal year ended November 30, 2005, Exhibit 12.01 of Quarterly Report on Form 10-Q filed with the SEC on April 10, 2006 and Exhibit 12.01 of Quarterly Report on Form 10-Q filed with the SEC on October 10, 2006
12.02	Computation in support of ratio of earnings to combined fixed charges and preferred stock dividends—Incorporated by reference to Exhibit 12.01 of Annual Report on Form 10-K for the fiscal year ended November 30, 2005 and Exhibit 12.01 of Quarterly Report on Form 10-Q filed with the SEC on April 10, 2006
15.01	Letter re unaudited interim financial information**
23.01	Consent of Barrett S. DiPaolo, Associate General Counsel of Lehman Brothers Holdings
23.02	Consent of Richards, Layton & Finger, P.A.
23.03	Consent of Ernst & Young LLP
23.04	Consent of Ernst & Young LLP concerning the Floating Rate Enhanced Capital Advantaged Preferred Securities and related securities registered with this Post- Effective Amendment No. 2 to Form S-3
23.05	Consent of Simpson Thacher & Bartlett LLP
24.01	Powers of attorney**
25.1	Form T-1 statement of eligibility and qualification under the Trust Indenture Act of 1939 (a "Form T-1") of Citibank, N.A. as trustee under the indenture with respect to the senior debt securities**
25.2	Form T-1 of JPMorgan Chase Bank, N.A. ("JPM Chase") as trustee under the indenture with respect to the subordinated debt securities**
25.3	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings Capital Trust VII**
25.4	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings Capital Trust VIII**
25.5	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings Capital Trust IX**

E-5

25.6	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings Capital Trust X**
25.7	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings Capital Trust XI**
25.8	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings Capital Trust XII**
25.9	Form T-1 of JPM Chase as trustee under the guarantee for the benefit of holders of trust preferred securities of Lehman Brothers Holdings Capital Trust VII**
25.10	Form T-1 of JPM Chase as trustee under the guarantee for the benefit of holders of trust preferred securities of Lehman Brothers Holdings Capital Trust VIII**
25.11	Form T-1 of JPM Chase as trustee under the guarantee for the benefit of holders of trust preferred securities of Lehman Brothers Holdings Capital Trust IX**
25.12	Form T-1 of JPM Chase as trustee under the guarantee for the benefit of holders of trust preferred securities of Lehman Brothers Holdings Capital Trust X**
25.13	Form T-1 of JPM Chase as trustee under the guarantee for the benefit of holders of trust preferred securities of Lehman Brothers Holdings Capital Trust XI**
25.14	Form T-1 of JPM Chase as trustee under the guarantee for the benefit of holders of trust preferred securities of Lehman Brothers Holdings Capital Trust XII**
25.15	Form T-1 of JPM Chase as trustee under the indenture with respect to the subordinated debt securities —Incorporated by reference to Exhibit 25.01 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
25.16	Form T-1 of JPM Chase as trustee under the declaration of trust of Lehman Brothers Holdings E-Capital Trust I —Incorporated by reference to Exhibit 25.02 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
25.17	Form T-1 of JPM Chase as trustee under the trust guarantee for the benefit of the holders of trust securities —Incorporated by reference to Exhibit 25.03 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005
25.18	Form T-1 of JPM Chase as trustee under the LLC guarantee for the benefit of the holders of LLC preferred securities — Incorporated by reference to Exhibit 25.04 of registration statement on Form S-4 (Reg. No. 333-129195-02) filed with the SEC on October 21, 2005

*

To be filed as an exhibit to a Current Report on Form 8-K and incorporated herein by reference.

**

Previously filed as an exhibit to this Registration Statement.

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QuickLinks

EXPLANATORY NOTE
TABLE OF CONTENTS
ECAPS STRUCTURE
GENERAL INFORMATION
SUMMARY
Our Company
The Securities
Risk Factors
RISK FACTORS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
RATIOS OF EARNINGS TO FIXED CHARGES
ACCOUNTING TREATMENT
LEHMAN BROTHERS HOLDINGS INC.
LEHMAN BROTHERS HOLDINGS E-CAPITAL TRUST I
LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I
SELECTED FINANCIAL DATA FOR THE TRUST
SELECTED FINANCIAL DATA FOR THE LLC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE TRUST AND THE LLC
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
DESCRIPTION OF THE TRUST GUARANTEE
DESCRIPTION OF THE LLC PREFERRED SECURITIES
DESCRIPTION OF THE LLC GUARANTEE
DESCRIPTION OF THE LLC INVESTMENTS
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE LLC PREFERRED SECURITIES, THE AFFILIATE DEBT INSTRUMENTS AND THE GUARANTEES
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
CERTAIN ERISA CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
INDEX TO FINANCIAL STATEMENTS
LEHMAN BROTHERS HOLDINGS E-CAPITAL LLC I Statement of Cash Flows
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
EXHIBIT INDEX

EX-5.1

Exhibit 5.1

November 3, 2006

Lehman Brothers Holdings E-Capital Trust I

Lehman Brothers Holdings E-Capital LLC I

c/o Lehman Brothers Holdings Inc.

747 Seventh Avenue

New York, NY 10019

Re:Lehman Brothers Holdings E-Capital Trust I and

Lehman Brothers Holdings E-Capital LLC I

Ladies and Gentlemen:

We have acted as special Delaware counsel for Lehman Brothers Holdings E-Capital Trust I, a Delaware statutory trust (the “Trust”), Lehman Brothers Holdings E-Capital LLC I, a Delaware limited liability company (the “LLC”), and Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), in connection with the matters set forth herein. This opinion is being delivered to you at your request.

For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following:

(a)The Certificate of Trust of the Trust (the “Certificate of Trust”), as filed in the office of the Secretary of State of the State of Delaware (the “Secretary of State”) on August 16, 2005;

(b)The Declaration of Trust for the Trust, dated as of August 19, 2005 (the “Declaration of Trust”), among the Company, the trustees of

the Trust named therein (the “Trustees”), and the holders, from time to time, of the undivided beneficial ownership interests in the assets of the Trust (including Exhibits A-1 and A-2 thereto);

(c)The Certificate of Formation of the LLC (the “Certificate of Formation”), as filed in the office of the Secretary of State on August 16, 2005;

(d)The Limited Liability Company Agreement of the LLC, dated as of August 19, 2005 (the “LLC Agreement”), between the Company, as managing member, and the Trust, as non-managing member (including Annex A attached thereto);

(e)The Post-Effective Amendment No. 2 to the Registration Statement (the “Registration Statement”) on Form S-3, including a prospectus (the “Prospectus”) relating to the Floating Rate Enhanced Capital Advantage Preferred Securities of the Trust representing preferred undivided beneficial ownership interests in the assets of the Trust (each, a “Trust Preferred Security” and collectively, the “Trust Preferred Securities”), to be filed by, inter alia, the Company, the Trust and the LLC with the Securities and Exchange Commission on or about October     , 2006; and

(f)A Certificate of Good Standing for each of the Trust and the LLC, dated October     , 2006, obtained from the Secretary of State.

Initially capitalized terms used herein and not otherwise defined are used as defined in the Declaration of Trust.

For purposes of this opinion, we have not reviewed any documents other than the documents listed above, and we have assumed that there exists no provision in any document that we have not reviewed that bears upon or is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects.

With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures.

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For purposes of this opinion, we have assumed (i) that the Declaration of Trust constitutes the entire agreement among the parties thereto with respect to the subject matter thereof, including with respect to the creation, operation and termination of the Trust, and that the Declaration of Trust and the Certificate of Trust are in full force and effect and have not been amended, (ii) that the LLC Agreement constitutes the entire agreement among the parties thereto with respect to the subject matter thereof, including with respect to the admission of members to, and the formation, operation, management and termination of, the LLC, and that the LLC Agreement and the Certificate of Formation are in full force and effect and have not been amended, (iii) except to the extent provided in paragraphs 1 and 4 below, the due creation or due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its creation, organization or formation, (iv) the legal capacity of natural persons who are parties to the documents examined by us, (v) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (vi) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vii) the receipt by each Person to whom a Trust Preferred Security is issued by the Trust of a Trust Preferred Security Certificate for such Trust Preferred Security and the payment for the Trust Preferred Security acquired by it, in accordance with the Declaration of Trust and the Registration Statement, (viii) that the Trust Preferred Securities are issued and sold to the Trust Preferred Security Holders in accordance with the Declaration of Trust and the Registration Statement, and (ix) that the LLC Preferred Securities (the “LLC Preferred Securities”) are issued and sold to the Trust in accordance with the LLC Agreement and the Registration Statement.

This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect.

Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that:

1.The Trust has been duly created and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act.

2.The Trust Preferred Securities represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and non-assessable undivided beneficial ownership interests in the Trust.

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3.The Trust Preferred Securities Holders, as beneficial owners of the Trust, are entitled to the same limitation of personal liability under Delaware law as extended to stockholders of private corporations for profit. We note that the Trust Preferred Security Holders are required to make payment or provide indemnity or security as set forth in the Declaration of Trust and will be subject to the withholding provisions of Section 10.4 of the Declaration of Trust.

4.The LLC has been duly formed and is validly existing in good standing as a limited liability company under the Delaware Limited Liability Company Act.

5.The LLC Preferred Securities represent valid and, subject to the qualifications in paragraph 6 below, fully paid and non-assessable limited liability company interests in the LLC.

6.The holders of the LLC Preferred Securities, as members of the LLC, will be not be obligated personally for any of the debts, obligations or liabilities of the LLC, whether arising in contract, tort or otherwise solely by reason of being a member of the LLC. We note that the holders of the New LLC Preferred Securities may be obligated to make payments provided for in the LLC Agreement and to repay any funds wrongfully distributed to them and will be subject to the withholding provisions of Section 6.5 of the LLC Agreement.

We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. We hereby consent to the use of our name under the heading “Legal Matters” in the Prospectus. We hereby consent to the reliance on the foregoing opinions by Barrett S. DiPaolo, Associate General Counsel of Company. In giving the foregoing consents, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose.

	Very truly yours,
CDK/pm	/s/ Richards, Layton & Finger

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EX-5.2

Exhibit 5.02

[Letterhead of Lehman Brothers Holdings Inc.]

                                                                                                                November 3, 2006

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Ladies and Gentlemen:

I am Senior Vice President and Associate General Counsel of Lehman Brothers Inc., and I have acted as counsel to Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), in connection with Post-Effective Amendment No. 2 (the “Post-Effective Amendment”) to the Registration Statement on Form S-3 (the “Registration Statement”) filed by the Company, Lehman Brothers Holdings E-Capital LLC I, a Delaware limited liability company (the “LLC”), Lehman Brothers Holdings E-Capital Trust I, a Delaware statutory trust (the “Trust”), and the other registrants named therein, with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, for the purpose of adding a prospectus dated as of November 3, 2006, for use in connection with market-making transactions with respect to:

(i) $300,000,000 aggregate liquidation amount of the Trust’s Floating Rate Enhanced Capital Advantaged Preferred Securities (the “Trust Preferred Securities”),

(ii)$300,001,000 aggregate liquidation preference of the LLC’s preferred securities (the “LLC Preferred Securities”) and

(iii)(a)   $300,001,000 aggregate principal amount of the Company’s Floating Rate Junior Subordinated Deferrable Interest Debenture due 2035 (the “Company Debenture”),

(b)   a  guarantee by the Company of the LLC Preferred Securities (the “LLC Guarantee”) and

(c)   a  guarantee by the Company of the  Trust Preferred Securities (the “Trust Guarantee”).

The  Trust Preferred Securities were issued under the Declaration of Trust of the Trust, dated as of August 19, 2005 (the “Declaration of Trust”), among the Company, as Sponsor, Barrett DiPaolo, Karen Corrigan and James Killerlane III, as the initial Regular Trustees, JPMorgan Chase Bank, N.A., as the initial Property Trustee, and Chase Bank USA, National Association, as the initial Delaware Trustee.  The  LLC Preferred Securities were issued by the LLC under the Limited Liability Company Agreement of the LLC, dated as of August 19, 2005 (the “LLC Agreement”), among the Company, as Managing Member, and the Trust, as Non-Managing Member.  The  Company Debenture was issued under the

Indenture, dated as of February 1, 1996 (the “Indenture”), as amended and supplemented by the First Supplemental Indenture, dated as of February 1, 1996, and the Eighth Supplemental Indenture, dated as of August 19, 2005, between the Company and JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank and prior thereto as Chemical Bank, as Indenture Trustee.  The  LLC Guarantee was issued by the Company under the LLC Guarantee Agreement, dated as of August 19, 2005, between the Company and JPMorgan Chase Bank, N.A., as trustee, for the benefit of the holders of the LLC Preferred Securities.  The  Trust Guarantee was issued by the Company under the Trust Guarantee Agreement, dated as of August 19, 2005, between the Company and JPMorgan Chase Bank, N.A., as trustee, for the benefit of the holders of the Trust Securities (as defined in the Trust Guarantee).

I have examined, or have had members of my staff examine, the Registration Statement, the Post-Effective Amendment, the LLC Agreement, the Declaration of Trust, the LLC Guarantee, the Trust Guarantee and the Indenture, which have been filed with the Commission as exhibits to, or incorporated by reference in, the Registration Statement.  I also have examined, or have had members of my staff examine, the originals, or duplicates or certified or conformed copies, of such corporate records, agreements, documents and other instruments and have made such other investigations as I have deemed relevant and necessary in connection with the opinions hereinafter set forth, including, without limitation, the resolutions adopted by the Executive Committee of the Board of Directors of the Company authorizing the issuance of the aforementioned securities.  As to questions of fact material to this opinion, I have relied upon certificates or comparable documents of public officials and of officers and representatives of the Company.

In rendering the opinions set forth below, I have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents.

Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, I am of the opinion that:

1.The  Company Debenture has been duly executed and, assuming that it has been duly authenticated in accordance with the provisions of the Indenture, has been duly issued and delivered and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms.

2.Assuming that the LLC Preferred Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the LLC Agreement, the  LLC Guarantee has been duly issued and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms.

3.Assuming that the Trust Preferred Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Declaration of Trust, the  Trust Guarantee has been duly issued and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms.

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My opinions set forth above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

Insofar as the opinions expressed herein relate to or are dependent upon matters governed by the law of the State of Delaware, I have relied upon the opinion of Richards Layton & Finger, P.A., dated the date hereof.

I do not express any opinion herein concerning any law other than the law of the State of  York, the federal law of the United States of America and, to the extent set forth herein, the law of the State of Delaware.

I hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the use of my name under the caption “Legal Matters” in the Prospectus included in the Registration Statement.

Very truly yours,

/s/ Barrett S. DiPaolo

Barrett S. DiPaolo

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EX-8.2

Exhibit 8.02

November 3, 2006

Re: Floating Rate Enhanced Capital Advantaged Preferred Securities
(“ECAPS”), Lehman Brothers Holdings E-Capital Trust I

Lehman Brothers Holdings Inc.
745 Seventh Avenue

New York, NY  10019

Lehman Brothers Holdings E-Capital LLC I

745 Seventh Avenue

New York, NY 10019

Lehman Brothers Holdings E-Capital Trust I
745 Seventh Avenue

New York, NY  10019

This opinion letter was written to support the promotion or marketing of the transaction addressed in this opinion letter and was not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties under federal, state, or local tax law.  Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

Ladies and Gentlemen:

We have acted as special tax counsel (“Tax Counsel”) to Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), Lehman Brothers Holdings E-Capital LLC I, a Delaware limited liability company (the “LLC”) and Lehman Brothers Holdings E-Capital Trust I, a Delaware statutory trust (the “Trust”), in connection with the filing of Post-Effective Amendment No. 2 to the Registration Statement on Form S-3 filed for the purpose of adding a prospectus dated as of November 3, 2006 (the “Post-Effective Amendment”) for use in connection with

market-making transactions with respect to:  (i) the $300,001,000 floating rate subordinated debenture due 2035 (the “Subordinated Debenture”) issued by the Company pursuant to the Indenture between the Company and JPMorgan Chase Bank, N.A., as trustee (in such capacity, the “Debenture Trustee”), as amended and supplemented (collectively, the “Indenture”); (ii) the LLC Preferred Securities and the LLC Common Securities (collectively, the “LLC Securities”) issued by the LLC pursuant to the Limited Liability Company Agreement (the “LLC Agreement”) among the Company, as Managing Member, and the Trust, as Non-Managing Member; and (iii) the Trust Preferred Securities and Trust Common Securities (collectively, the “Trust Securities”) issued by the Trust pursuant to the Declaration of Trust (the “Trust Agreement”) among the Company, as sponsor, JPMorgan Chase Bank, N.A., as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee and the Regular Trustees named therein.  The LLC Preferred Securities are guaranteed by the Company with respect to the payment of distributions and payments upon liquidation, redemption and otherwise pursuant to, and to the extent set forth in, the LLC Guarantee Agreement (the “LLC Guarantee”) between the Company and JPMorgan Chase Bank, N.A., as trustee (in such capacity, the “LLC Guarantee Trustee”), for the benefit of the holders of the LLC Preferred Securities.  The Trust Securities are guaranteed by the Company with respect to the payment of distributions and payments upon liquidation, redemption and otherwise pursuant to, and to the extent set forth in, the Trust Guarantee Agreement (the “Trust Guarantee”) between the Company and JPMorgan Chase Bank, N.A., as trustee (in such capacity, the “Trust Guarantee Trustee”), for the benefit of the holders of the Trust Securities.  The Trust Preferred Securities were issued to investors pursuant to the Offering Memorandum dated August 12, 2005.  All

2

capitalized terms used in this opinion letter and not otherwise defined herein shall have the meaning ascribed to such terms in the Post-Effective Amendment.

In delivering this opinion letter, we have reviewed and relied upon:  (i) the Post-Effective Amendment; (ii) the Indenture; (iii) the Subordinated Debenture; (iv) the LLC Agreement; (iv) the Trust Agreement; (v) the LLC Guarantee; (vi) the Trust Guarantee; (vii) the LLC Securities; (viii) forms of the Trust Securities; and (ix) the representation letter to us from the Company dated November 3, 2006.  We also have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company, the LLC and the Trust and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

In our examination of such material, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies of documents submitted to us.  In addition, we also have assumed that the transactions related to the issuance of the Subordinated Debenture, the LLC Securities and the Trust Securities have been consummated in accordance with the terms of the documents described herein.

Based on our consideration of the relevant authorities and subject to the assumptions and qualifications herein, we are of the opinion that if the Subordinated Debenture were issued directly to third-party purchasers, the Subordinated Debenture would be treated as debt for federal income tax purposes.

The characterization of a security as indebtedness for federal income tax purposes is dependent on the terms of the security and the circumstances surrounding its issuance.  We have considered the effect of the issuance of the Subordinated Debenture as part of the ECAPS

3

structure and the favorable rating agency treatment that is thereby obtained.  We do not believe that these circumstances should affect the characterization of the Subordinated Debenture as debt for federal income tax purposes.  However, it is possible that the Internal Revenue Service or the courts might assert that the terms of the Subordinated Debenture include the deferral and subordination provisions of the LLC Preferred Securities and the Trust Preferred Securities.  It is also possible that the Internal Revenue Service or the courts might recharacterize the Subordinated Debenture as having a term of 60 years based upon the possible reinvestment of the proceeds upon maturity of the Subordinated Debenture in other debt of the Company or its affiliates if certain reinvestment criteria are met.  We do not believe that such recharacterizations would be appropriate.  However, should such a recharacterization occur, we are of the opinion that, while the matter is not free from doubt, the Subordinated Debenture would, nevertheless, be characterized as indebtedness by a court with jurisdiction in a properly presented case.

In addition, based on the assumptions and qualifications herein, (i) assuming that the Trust was formed and will be maintained in compliance with the terms of the Trust Agreement and assuming that the LLC was formed and will be maintained in compliance with the terms of the LLC Agreement, we are of the opinion that each of the Trust and the LLC will not be characterized as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes and (ii) we are of the opinion that the statements made in the Post-Effective Amendment under the caption “Certain United States Federal Income Tax Considerations” insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.

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We express no opinion with respect to the transactions referred to herein or in the Post-Effective Amendment other than as expressly set forth herein.  Moreover, we note that there is no authority directly on point dealing with securities such as the Trust Securities, the LLC Securities or transactions of the type described herein and that our opinion is not binding on the Internal Revenue Service or the courts, either of which could take a contrary position.  Nevertheless, we believe that if challenged, the opinions we express herein would be sustained by a court with jurisdiction in a properly presented case.

We do not express any opinion herein concerning any law other than the federal tax law of the United States.

Very truly yours,

/s/ Simpson Thacher & Bartlett LLP

SIMPSON THACHER & BARTLETT LLP

5

EX-23.03

Exhibit 23.03

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” in Amendment No.2 to the Registration Statement (Form S-3 No. 333-1344553) and related Prospectus of Lehman Brothers Holdings Inc., Lehman Brothers Holdings E-Capital LLC I and Lehman Brothers Holdings E-Capital Trust I for the registration and exchange of $300,000,000 of Lehman Brothers Holding E-Capital Trust  I floating rate enhanced capital advantaged preferred securities and related securities and to the incorporation by reference therein of our reports dated February 13, 2006, with respect to the consolidated financial statements of Lehman Brothers Holding Inc., Lehman Brothers Holdings Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Lehman Brothers Holdings Inc., included in its Annual Report (Form 10-K) for the year ended November 30, 2005, filed with the securities and Exchange Commission.

/s/ Ernst & Young LLP

New York, New York

November 3, 2006

EX-23.04

Exhibit 23.04

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our reports dated May 10, 2006, in Amendment No. 2 to the Registration Statement (Form S- 3 No. 333-1344553) and related Prospectus of Lehman Brothers Holdings Inc., Lehman Brothers Holdings E-Capital Trust I and Lehman Brothers Holdings E-Capital LLC I for the registration and exchange of $300,000,000 of Lehman Brothers Holdings E-Capital Trust I floating rate enhanced capital advantage preferred securities and related securities.

/s/ Ernst & Young LLP
New York, New York
November 3, 2006