8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)      December 3, 2004

Lehman Brothers Holdings Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

1-9466	13-3216325
(Commission File Number)	(IRS Employer Identification No.)
745 Seventh Avenue New York, New York	10019
(Address of Principal Executive Offices)	(Zip Code)

(212) 526-7000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

Lehman Brothers Holdings Inc. grants various awards to its executive officers under the Lehman Brothers Holdings Inc. 1996 Management Ownership Plan, as amended (the “1996 Management Ownership Plan”) and the Amended and Restated Lehman Brothers Holdings Inc. Employee Incentive Plan (the “Employee Incentive Plan”).  Forms of award grant agreements are attached hereto as exhibits and are hereby incorporated by reference.

Item 9.01Financial Statements and Exhibits

(c)Exhibits.

10.1   Form of Agreement evidencing a grant of Restricted Stock Units to Executive Officers under the 1996 Management Ownership Plan.

10.2   Form of Agreement evidencing a grant of Nonqualified Stock Options to Executive Officers under the 1996 Management Ownership Plan.

10.3   Form of Agreement evidencing a grant of Restricted Stock Units to Directors pursuant to the Employee Incentive Plan.

10.4   Form of Nonqualified Stock Option Agreement evidencing a grant of Nonqualified Stock Options to Directors pursuant to the Employee Incentive Plan.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

		LEHMAN BROTHERS HOLDINGS INC.
Date:	December 3, 2004	By:	/s/ James J. Killerlane III
		Name:	James J. Killerlane III
		Title:	Vice President

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EXHIBIT INDEX

Exhibit No.	Exhibit
10.1	Form of Agreement evidencing a grant of Restricted Stock Units to Executive Officers under the 1996 Management Ownership Plan.
10.2	Form of Agreement evidencing a grant of Nonqualified Stock Options to Executive Officers under the 1996 Management Ownership Plan.
10.3	Form of Agreement evidencing a grant of Restricted Stock Units to Directors pursuant to the Employee Incentive Plan.
10.4	Form of Nonqualified Stock Option Agreement evidencing a grant of Nonqualified Stock Options to Directors pursuant to the Employee Incentive Plan.

EX-10.1

Exhibit 10.1

200   RESTRICTED STOCK UNIT AWARD

AGREEMENT EVIDENCING A GRANT OF
RESTRICTED STOCK UNITS

1.   GRANT OF UNITS.  Pursuant to the Lehman Brothers Holdings Inc. (“Holdings”) 1996 Management Ownership Plan (the “Plan”), you are hereby granted, as of          , 200   (the “Date of Grant”), the number of Restricted Stock Units (“Units”) for shares of Holdings’ common stock, par value $.10 per share (the “Common Stock”), set forth on the award statement with your name on it delivered to you herewith (which number of Units may be adjusted pursuant to Paragraph 8 below).

2.   ADDITIONAL DOCUMENTS; DEFINITIONS.  You have been provided with a copy of the Plan, which is incorporated in this instrument by reference and made a part hereof, and a copy of the Plan prospectus.  The Plan and the prospectus should be carefully examined.  In the event of any conflict or ambiguity between this instrument and the Plan, the terms of the Plan shall govern.  All capitalized terms not defined herein or on Annex A attached hereto shall have the meaning ascribed to such terms under the Plan.

3.   VESTING.  Subject to Paragraph 4, Units awarded to you hereunder shall become vested in accordance with the following vesting schedule:

•of the Principal Units (     % of the total award) shall become vested on          , 200  .

•The remaining             Principal Units and all of the Discount Units (    % of the total award) shall become vested on               , 200  .

4.   ENTITLEMENT TO RECEIVE COMMON STOCK.

(a)   General Rule.  Unless otherwise set forth herein, you shall receive one share of Common Stock for each Unit that you hold on         , 200   (the “Maturity Date”) and you shall be entitled to receive freely transferable Shares of Common Stock as soon as practicable after the Maturity Date.

(b)   Effect of Detrimental Activity.  Notwithstanding any other provision of this Agreement if you engage in Detrimental Activity at any time prior to the Share Payment Date, all Units held by you shall be forfeited and canceled.

(c)   Effect of Termination.  In the event of your Termination for any reason or notification of Termination prior to                , 200  , all Units held by you shall be forfeited and cancelled.  In the event of any Termination not described in the preceding sentence, the following rules shall apply:

(i)Voluntary Termination with Competitive Activity.  In the event of your voluntary Termination with Competitive Activity, (i) all Discount Units shall be forfeited and canceled, (ii) if such Termination occurs prior to                 , 200  , all

Principal Units shall be forfeited and canceled and (iii) if such Termination occurs on or subsequent to                , 200  , you shall be entitled to receive freely transferable shares of Common Stock for               of the Principal Units (      % of the total award).

(ii)Voluntary Termination without Competitive Activity.  In the event of your voluntary Termination without Competitive Activity, you shall be entitled to receive (i) freely transferable shares of Common Stock for the Principal Units and (ii) freely transferable shares of Common Stock equal to       % of the Discount Units multiplied by each full year of your employment with Holdings or a Subsidiary after              , 200    and before your Termination.  However, if your Termination is a Full Career Termination, you will be entitled to receive freely transferable shares of Common Stock for all the Discount Units provided you do not engage in Competitive Activity prior to the Share Payment Date.  In the event of Competitive Activity prior to the Share Payment Date, the provisions specified in Paragraph 4(c)(i) shall apply.

(iii)Involuntary Termination with Cause.  In the event of your involuntary Termination with Cause, all Principal Units and Discount Units shall be immediately forfeited and canceled.

(iv)Involuntary Termination without Cause.  In the event of your involuntary Termination without Cause, you shall be entitled to receive (i) freely transferable shares of Common Stock for the Principal Units and (ii) freely transferable shares of Common Stock equal to   % of the Discount Units multiplied by each full year of your employment with Holdings or a Subsidiary after               , 200    and before your Termination.  However, if your Termination is a Full Career Termination, you will be entitled to receive freely transferable shares of Common Stock for all the Discount Units.

(v)Retirement.  Notwithstanding the foregoing provisions of Paragraph 4(c)(i), (ii), (iii) and (iv), in the event of your Retirement and provided you do not engage in Competitive Activity or Detrimental Activity, you shall be entitled to receive freely transferable shares of Common Stock for all Principal Units and Discount Units as soon as practicable after the end of the sixth month following your Retirement.  If you engage in Competitive Activity, the provisions specified in Paragraph 4(c)(i) shall apply as of the date of your Retirement, and you shall be obligated to repay to Holdings the full gross amounts or shares received in excess of those which you would have received under Paragraph 4(c)(i).  If you engage in Detrimental Activity prior to the Share Payment Date, you shall be obligated to repay to Holdings the full gross amounts or shares you received under this Agreement.

(vi)Termination Due to Death; Disability.  Notwithstanding the foregoing provisions of Paragraph 4(c)(i), (ii), (iii), (iv) and (v), in the event of the occurrence (i) your death or Disability or (ii) your death or Disability following a Termination described in Paragraph 4(c)(ii) or (iv) hereof, all outstanding Units held by you shall become immediately payable and you shall, as soon as practicable thereafter, receive freely transferable shares of Common Stock.

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Any shares that become payable pursuant to this Paragraph 4(c) (other than Paragraph (c)(v) or (vi)) shall be issued to you on the Share Payment Date, subject to the application of Paragraph 4(b).  Notwithstanding any other provisions of this Agreement, if any payment otherwise due hereunder would have the effect of making you subject to the provisions of Code Section 409A(a)(1), such payment shall be postponed until the earliest date upon which the payment could be made without subjecting you to the provisions of Code Section 409A(a)(1).  Any remaining Units that are not payable pursuant to the provisions of the Paragraph 4(c) shall be canceled by Holdings.

(d)   Affidavit.  In the event of your Termination on or after                 , 200  , you may be requested, from time to time after your Termination, to complete and sign an affidavit with respect to Competitive Activity or Detrimental Activity, which includes representations and authorizes Holdings to verify the representations.  Any failure on your part to complete, sign and return the affidavit within 60 days may cause you to forfeit all Units held by you at that time.

5.   DIVIDEND EQUIVALENTS.  With respect to each regular cash dividend or distribution paid or made on Common Stock to holders of record on or after                 , 200  , you shall be paid cash and/or credited with a number of additional Units comparable in value to such dividend or distribution.  Such additional Units shall vest and become payable at the same time as the Units to which they are attributable.

6.   LIMITATION ON OBLIGATIONS.  Holdings’ and any Subsidiary’s obligation with respect to the Units granted hereunder is limited solely to the delivery to you of shares of Common Stock on the date when such shares are due to be delivered hereunder, and in no way shall Holdings or any Subsidiary become obligated to pay cash in respect of such obligation (except for cash paid pursuant to Paragraphs 5 and 9 hereof).

7.   NON-ASSIGNMENT.  Units may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of by you, except by will or the laws of descent and distribution.  If you or anyone claiming under or through you attempts to violate this Paragraph 7, such attempted violation shall be null and void and without effect, and Holdings’ obligation to issue any Common Stock hereunder shall terminate.

8.   EQUITABLE ADJUSTMENT.  In the event of a Change in Capitalization occurring on or after the Date of Grant specified above and prior to the Share Payment Date, the number and kind of shares of Common Stock which may be issued with respect to Units shall be adjusted so as to reflect such change.

9.   CHANGE IN CONTROL.  Except as set forth below, upon the occurrence of a Change in Control without the prior approval of a majority of the independent members of the Incumbent Board, your Units shall vest immediately, the sales restrictions shall lapse and shares of Common Stock shall be issued.  Except as set forth below, upon the occurrence of a Change in Control with the prior approval of a majority of the independent members of the Incumbent Board, you shall receive, in the same form of consideration as that received by shareholders generally, the lesser of (a) the undiscounted market value (at the time of grant) of the shares of Common Stock underlying your outstanding Units or (b) the price paid by an

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acquirer for such shares of Common Stock, and the excess, if any, of the price paid by an acquirer over such undiscounted market value shall be deferred for the shorter of (x) two years following such Change in Control or (y) the term of any remaining restrictions (the “Deferred Period”), but your Units shall remain otherwise subject to all issuance restrictions during the Deferred Period.  Neither of the foregoing shall be effective to the extent you have tender or voting rights over shares of Common Stock held in Trust with respect to any Units, in which case you would only be issued Common Stock or receive the undiscounted market value in the same form of consideration as that received by shareholders generally (and after the Deferred Period, the excess price) in respect of such Units upon successful completion of a Change in Control.

10.   TREATMENT IN BANKRUPTCY.  (a) If you are an employee of Holdings, Holdings agrees to deliver, and (b) if you are an employee of a Subsidiary, Holdings agrees to deliver to (or at the direction of) such Subsidiary, shares of Common Stock on the date when such shares are due to be delivered under this Agreement in satisfaction of each Unit granted to you hereunder.  If you are an employee of a Subsidiary, Holdings’ obligation in clause (b) of the preceding sentence is created expressly for the benefit of you, and you shall have the full right to enforce Holdings’ obligation to deliver Common Stock as if such obligation were made directly in favor of you.  All of your claims arising from, in connection with, or in any way relating to, any failure of Holdings to deliver to you, or to a Subsidiary for delivery by such Subsidiary to you, shares of Common Stock on the date when such shares are due to be delivered under this Agreement in satisfaction of each Unit granted to you shall be deemed, in the event of a bankruptcy of Holdings, to be claims for damages arising from the purchase or sale of Common Stock of Holdings, within the meaning of section 510(b) of the Bankruptcy Code and shall have in such bankruptcy the same priority as, and no greater priority than, common stock interests in Holdings.

11.   AMENDMENT.  The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate, provided, however, that no such amendment shall, without your consent, diminish your rights under this Agreement.

12.   BINDING ACTIONS.  Any action taken or decision made by the Committee or its designees arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on you and all persons claiming under or through you.  By accepting this grant or other benefit under the Plan, you and each person claiming under or through you shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Committee or its designees.

13.   NO RIGHT TO CONTINUED EMPLOYMENT.  The grant of Units shall not confer on you any right to be retained in the employ of Holdings or a subsidiary, or to receive subsequent Units or other awards under the Plan.  The right of Holdings or any subsidiary to terminate your employment with it at any time or as otherwise provided by any agreement between Holdings or any subsidiary and you is specifically reserved.

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14.   APPLICABLE LAW.  The validity, construction, interpretation, administration, and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware.

15.   WITHHOLDING/DEDUCTIONS.  Holdings shall have the right to deduct applicable taxes from all amounts payable to you.  It shall be a condition to the obligation of Holdings to issue shares of Common Stock hereunder (a) that you (or, in event of your death, your estate or any person who acquires the right to this award by bequest or inheritance or otherwise by reason of your death) pay to Holdings or its designee, upon its demand, in accordance with the Plan, either in the form of cash or freely transferable shares of Common Stock such amount as may be required by law for the purpose of satisfying its obligation or the obligation of any other person to withhold any taxes required by law which are incurred by reason of the issuance of such shares of Common Stock, and (b) that you (or, in the event of your death, your estate or any person who acquires the right to this award by bequest or inheritance or otherwise by reason of your death) provide Holdings with any forms, documents or other information reasonably required by Holdings in connection with the grant.  If the amount requested for the purpose of satisfying the withholding obligation is not paid, Holdings may refuse to issue shares of Common Stock and/or related dividend equivalents or take any other action it deems necessary to fulfill the withholding obligation.  Holdings shall further have the right to deduct from all amounts remaining payable to you after satisfaction of the minimum statutory withholding obligations described above, the amount of any deficit, debt, tax obligation or other liability or obligation of any kind which you may at that time have with respect to Holdings or any Subsidiary.

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ANNEX A

DEFINITIONS

“Cause” means a material breach by a person of an employment contract between the person and Holdings or any Subsidiary, failure by a person to devote substantially all business time exclusively to the performance of his or her duties for Holdings or any Subsidiary, willful misconduct, dishonesty related to the business and affairs of Holdings or any Subsidiary, conviction of a felony or of a misdemeanor constituting a statutory disqualification under U.S. securities laws (or failure to contest prosecution for a felony or such a misdemeanor), habitual or gross negligence in the performance of the person’s duties, solicitation of employees of Holdings or any Subsidiary to work at another company, improper use or disclosure of confidential information, the violation of policies and practices adopted by Holdings or any Subsidiary including, but not limited to the Code of Conduct, or a material violation of the conflict of interest, proprietary information or business ethics policies of Holdings or any Subsidiary.

“Change in Capitalization” means the occurrence of a circumstance described in Section 14 of the Plan.

“Committee” shall mean the Compensation and Benefits Committee of the Incumbent Board (see definition of Change in Control in the Plan).

“Competitive Activity” means involvement (whether as an employee, proprietor, consultant or otherwise) with any person or entity (including any company and its affiliates) engaged in any business activity which is materially competitive with any business carried on by Holdings or any of its Subsidiaries or affiliates on the date of termination of a person’s employment with Holdings and any of its Subsidiaries, as determined in the sole discretion of the Committee.

“Detrimental Activity” means at any time (i) using confidential information received during a person’s employment with Holdings or any Subsidiary, their affiliates or their clients, in breach of such person’s obligations to keep such information confidential; (ii) directly or indirectly persuading or attempting to persuade, by any means, any employee of Holdings or any Subsidiary to terminate employment with any of the foregoing or to breach any of the terms of his or her employment with the foregoing; (iii) directly or indirectly making any statement that is, or could be, disparaging of Holdings, its Subsidiaries or affiliates, or any of their employees (except as necessary to respond truthfully to any inquiry from applicable regulatory authorities or to provide information pursuant to legal process); or (iv) directly or indirectly engaging in any activity that is substantially injurious to the financial condition, reputation, or goodwill of Holdings or its Subsidiaries or affiliates, in each case as determined in the sole discretion of the Committee.

“Disability” means a disability under both the Long-Term Disability Insurance Plan and the Social Security Act.

“Discount Units” shall mean the number of Units (and any dividend equivalents related thereto) related to the       % discount upon issuance of the award.

“Full Career Termination” means a Termination when (i) a person has at least 20 years of service or (ii) a person meets all of the following criteria: (x) the person’s age plus

years of service with Holdings or any subsidiary equals at least 65, (y) the person is at least 45 years old, and (z) the person has at least 10 years of service with Holdings or any subsidiary.

“Principal Units” shall mean the number of Units (and any dividend equivalents related thereto) related to the undiscounted base portion of the award (       % of the total number of units awarded).

“Retirement” shall mean a Termination of employment which meets the criteria for retirement under Holdings’ qualified defined benefit pension plan, provided that the person has signed an agreement not to engage in Competitive Activity or Detrimental Activity, in a form prescribed in the sole discretion of the Committee.

“Share Payment Date” means as soon as practicable after the earlier of (a) the Maturity Date or (b) the completion of the fiscal quarter following the one-year anniversary of termination of employment.

“Termination” means the end of employment with Holdings or a Subsidiary.  The date of Termination and the reason for Termination are as determined in the sole discretion of the Committee.

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EX-10.2

Exhibit 10.2

200   STOCK OPTION AWARD

AGREEMENT EVIDENCING A GRANT OF A
NON-QUALIFIED STOCK OPTION

1.GRANT OF OPTION.  Pursuant to the Lehman Brothers Holdings Inc. (“Holdings”) 1996 Management Ownership Plan (the “Plan”), you are hereby granted, as of                     , 200  , a nonqualified stock option to purchase the number of common shares (par value $0.10 per share) of Holdings (“Shares”) set forth on the award statement delivered to you herewith (the “Award Statement”) (which number of Shares may be adjusted pursuant to Paragraph 6 below) with an exercise price of $         per Share as specified in the Award Statement (the “Option Exercise Price”).

2.ADDITIONAL DOCUMENTS; DEFINITIONS.  You have been provided with a copy of the Plan, which is incorporated in this instrument by reference and made a part hereof, and a copy of the Plan prospectus.  The Plan and the prospectus then in effect should be carefully examined before any decision is made to exercise the option.  In the event of any conflict or ambiguity between this instrument and the Plan, the terms of the Plan shall govern.  All capitalized terms not defined herein or in Annex A attached hereto shall have the meaning ascribed to such terms under the Plan.

3.EXERCISABILITY.  Subject to the provisions of this Agreement and the applicable provisions of the Plan, you may exercise this option as follows:

(a)No part of this option may be exercised after                     , 200   (the “Expiration Date”).

(b)You may first exercise this option on the later of (i)                            or (ii) any date on which the Fair Market Value of a Share exceeds $        , but this option will first become exercisable in any event no later than                     , regardless of the Fair Market Value of a Share.

This option may not be exercised for a fraction of a Share.

4.CONDITIONS TO EXERCISE.  This option may not be exercised unless all of the following conditions are met:

(a)     Legal counsel for Holdings must be satisfied at the time of exercise that the issuance of Shares upon exercise will be in compliance with the Securities Act of 1933, as amended, and applicable U.S. federal, state, local and foreign laws;

(b)     You (or your permitted transferee under paragraph 5) must pay at the time of exercise the full option price for the Shares being acquired hereunder, by (i) paying in United States dollars by cash (which may be in the form of a certified check), (ii) subject to Holdings’ prior consent, tendering Shares owned by you which have a Fair Market Value on the day of exercise equal to the full purchase price for the Shares being acquired, (iii) subject to Holdings’ prior consent, by delivery of a properly executed

exercise notice together with irrevocable instructions to a securities broker (or, in the case of pledges, lender) approved by Holdings to (a) sell shares of Common Stock subject to the option and to deliver promptly to Holdings a portion of the proceeds of such sale transaction on behalf of the exercising Participant to pay the option price, or (b) pledge shares of Common Stock subject to the option to a margin account maintained with such broker or lender, as security for a loan, and such broker or lender, pursuant to irrevocable instructions, delivers to Holdings loan proceeds at the time of exercise to pay the option price, or (iv) by any combination of (i), (ii) or (iii) above; and

(c)     You must, unless otherwise provided below, at all times during the period beginning with                     , 200   and ending on the date of such exercise, (x) have been employed by Holdings or a Subsidiary thereof or (y) not have engaged in Detrimental Activity.

(i)Termination before                      , 200   .  In the event of your Termination for any reason before                     , 200  , this option shall be forfeited and canceled.

(ii)Voluntary Termination with Competitive Activity.  In the event of your voluntary Termination with Competitive Activity on or after                     , 200  , this option shall be forfeited and canceled.

(iii)Voluntary Termination without Competitive Activity.  In the event of your voluntary Termination without Competitive Activity on or after                     , 200  , you will be permitted to exercise this option, to the extent not previously exercised, subject to the approval of the Committee, until the Expiration Date, provided you enter into an agreement not engage in Competitive Activity or Detrimental Activity during that period of time.  If you do not enter into such an agreement, or if you engage in Competitive Activity, this option, to the extent not previously exercised, shall expire immediately.

(iv)Involuntary Termination with Cause.  In the event of your involuntary Termination with Cause, this option, to the extent not previously exercised, shall be forfeited and canceled immediately.

(v)Involuntary Termination without Cause.  In the event of your involuntary Termination without Cause on or after                     , 200  , you will be permitted to exercise this option, to the extent not previously exercised, until the Expiration Date, subject to the approval of the Committee, provided you do not engage in Detrimental Activity during that period of time.  If you engage in Detrimental Activity, the portion of this option, to the extent not previously exercised, shall expire immediately.

(vi)Termination Due to Death; Disability.  In the event of the occurrence on or after                     , 200   of your death or Disability, you (or in the event of your death, your estate or any person who acquires the right to exercise this option by bequest or inheritance or otherwise by reason of your

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death) will be permitted to exercise this option, to the extent not previously exercised, until the Expiration Date.

Any remaining portion of this option, which is not exercisable pursuant to the provisions of this subparagraph 4(c), shall be canceled by Holdings.

5.NON-ASSIGNMENT.  This option may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by you, except (a) by will or the laws of descent and distribution or (b) to members of your immediate family or to a trust or such other instrument as may be established for the direct benefit of a member of your immediate family and is exercisable during your lifetime only by you or such permitted transferee.  If you or anyone claiming under or through you attempts to violate this Paragraph 5, such attempted violation shall be null and void and without effect, and Holdings’ obligations hereunder shall terminate.

6.EQUITABLE ADJUSTMENTS.  In the event of a Change in Capitalization occurring after the date of grant of this option and prior to the exercise of the option in full, the number and kind of shares of Common Stock for which this option may then be exercised and the option price shall be adjusted so as to reflect such change.

7.CHANGE IN CONTROL.  Upon the occurrence of a Change in Control without the prior approval of the majority of the independent members of the Incumbent Board, all options awarded hereunder will be exercisable in full; provided however, that if the Change in Control occurs with the prior approval of a majority of the independent members of the Incumbent Board, one-half of the options awarded hereunder that are then not exercisable shall become immediately exercisable and remain exercisable through                     , 200  , and the remaining one-half of such options, or the difference in value between the exercise price and the highest price paid by the acquiring entity in such Change in Control (in such form of consideration as is received by shareholders generally) for the remaining one-half of such options, shall become exercisable or be paid, as appropriate, upon the earliest to occur of (a) two years following such Change in Control, (b) the date such options would become exercisable by their terms or (c) your involuntary termination without Cause, provided however, that if such Change in Control occurs within one year after this grant date, and such Change in Control will be effected by a merger involving the issuance of equity shares to Holdings’ stockholders, then the foregoing provisions of this paragraph will not apply and the Committee shall have total discretion as to the impact of such an event on options granted hereunder which are not then exercisable.

8.AMENDMENT.  The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate (including, but not limited to, the acceleration provisions), provided, however, that no such amendment shall, without your consent, diminish your rights under this Agreement.

9.BINDING ACTIONS.  Any action taken or decision made by the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on you and all persons

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claiming under or through you.  By accepting this grant or other benefit under the Plan, you and each person claiming under or through you shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Committee or its designees.

10.NO RIGHT TO CONTINUED EMPLOYMENT.  Neither the grant nor the exercise of the option shall confer on you any right to be retained in the employ of Holdings or its subsidiaries, or to receive subsequent options or other awards under the Plan.  The right of Holdings or any subsidiary to terminate your employment with it at any time or as otherwise provided by any agreement between Holdings or any subsidiary and you is specifically reserved.

11.NO RIGHTS OF A STOCKHOLDER.  Neither you nor your permitted transferee under Paragraph 5 shall have any of the rights of a stockholder with respect to Shares subject to the option except to the extent that such Shares of Common Stock shall have been issued to you or such transferee upon the exercise of the option.

12.APPLICABLE LAW.  The validity, construction, interpretation, administration, and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware.

13.WITHHOLDING.  Holdings shall have the right to deduct applicable taxes from all amounts payable to you.  It shall be a condition to the obligation of Holdings to issue Shares upon exercise of an option hereunder (a) that you (or in the event of your death, your estate or any person who acquires the right to exercise this option by bequest or inheritance or otherwise by reason of your death) pay to Holdings or its designee upon its demand in accordance with the Plan, either in the form of cash or Shares (including Shares otherwise issuable pursuant to exercise this option) such amount as may be required by law for the purpose of satisfying its obligation or the obligation of any other person to withhold any taxes required by law which are incurred by reason of the exercise of the option and (b) that you or your permitted transferee under Paragraph 5 provide Holdings with any forms, documents or other information reasonably required in connection with the grant.  If the amount requested for the purpose of satisfying the withholding obligation is not paid, Holdings may refuse to furnish Shares upon exercise of the option.  Holdings shall further have the right to deduct from all amounts remaining payable to you after satisfaction of the minimum statutory withholding obligations described above, the amount of any deficit, debt, tax obligation or other liability or obligation of any kind which you may at that time have with respect to Holdings or any subsidiary.

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ANNEX A

DEFINITIONS

“Cause” means a material breach by a person of an employment contract between the person and Holdings or any Subsidiary, failure by a person to devote substantially all business time exclusively to the performance of his or her duties for Holdings or any Subsidiary, willful misconduct, dishonesty related to the business and affairs of Holdings or any Subsidiary, conviction of a felony or of a misdemeanor constituting a statutory disqualification under U.S. securities laws (or failure to contest prosecution for a felony or such a misdemeanor), habitual or gross negligence in the performance of the person’s duties, solicitation of employees of Holdings or any Subsidiary to work at another company, improper use or disclosure of confidential information, the violation of policies and practices adopted by Holdings or any Subsidiary, including but not limited to the Code of Conduct, a material violation of the conflict of interest, proprietary information or business ethics policies of Holdings or any Subsidiary.

“Change in Capitalization” means the occurrence of a circumstance described in Section 14 of the Plan.

“Committee” means the Compensation and Benefits Committee of the Incumbent Board (see definition of Change in Control in the Plan).

“Competitive Activity” means involvement (whether as an employee, proprietor, consultant or otherwise) with any person or entity (including any company and its affiliates) engaged in any business activity which is materially competitive with any business carried on by Holdings or any of its Subsidiaries or affiliates on the date of termination of a person’s employment with Holdings or any of its Subsidiaries, as determined in the sole discretion of the Committee.

“Detrimental Activity” means at any time (i) using confidential information received during a person’s employment with Holdings or any Subsidiary, their affiliates or their clients, in breach of such person’s obligations to keep such information confidential; (ii) directly or indirectly persuading or attempting to persuade, by any means, any employee of Holdings or any Subsidiary to terminate employment with any of the foregoing or to breach any of the terms of his or her employment with the foregoing; (iii) directly or indirectly making any statement that is, or could be, disparaging of Holdings, its Subsidiaries or affiliates, or any of their employees (except as necessary to respond truthfully to any inquiry from applicable regulatory authorities or to provide information pursuant to legal process); or (iv) directly or indirectly engaging in any activity that is substantially injurious to the financial condition, reputation or goodwill of Holdings or its Subsidiaries or affiliates, in each case as determined in the sole discretion of the Committee.

“Disability” means a disability under both the Long-Term Disability Insurance Plan and the Social Security Act.

“Termination” means the end of employment with Holdings or any Subsidiary.  The date of Termination and the reason for Termination are as determined in the sole discretion of the Committee.

EX-10.3

Exhibit 10.3

LEHMAN BROTHERS HOLDINGS INC.

AGREEMENT EVIDENCING A GRANT OF
RESTRICTED STOCK UNITS

TO

Number of Restricted Stock Units	Date of Grant
Restricted Stock Units

1)Grant of Units.  Pursuant to the Lehman Brothers Holdings Inc. Employee Incentive Plan (the “Plan”), Lehman Brothers Holdings Inc. (the “Company”) hereby grants you, as of the Date of Grant specified above, the number of Restricted Stock Units (“Units”) specified above (which number of Units may be adjusted pursuant to Paragraph 9 below) subject to the terms and conditions set forth herein and in the Plan.  A Unit represents the right to receive one share of common stock (par value $0.10 per share) of the Company (“Common Stock”).

2)Additional Documents; Definitions.  Enclosed you will find a copy of the Plan which is incorporated in this instrument by reference and made a part hereof, and a copy of the Plan prospectus.  The Plan and the prospectus should be carefully examined.  All capitalized terms not defined herein shall have the meaning ascribed to such terms under the Plan.

3)Vesting.  The Units awarded to you hereunder shall vest immediately upon the Date of Grant.

4)Termination of Service.   Units are payable in shares of Common Stock upon termination of your service on the Board of Directors of the Company.  Delivery of Common Stock hereunder shall be made on, or as soon as practicable after such termination of service.

5)Dividend Equivalents.  As of each date a dividend or other distribution is paid or made on Common Stock to holders of record on and after the Date of Grant specified above, you shall be credited with a number of additional Units equal to the product of (i) the amount of such dividend or distribution paid on one share of Common Stock, multiplied by (ii) the number of Units then held by you, divided by the (iii) closing price of one share of Common Stock on the New York Stock Exchange on such date.  Such additional Units shall vest immediately.

6)Limitation on Obligations.  The Company’s obligation with respect to the Units granted hereunder is limited solely to the delivery to you of shares of Common Stock on the date when such shares are due to be delivered hereunder, and in no way shall the Company

become obligated to pay cash in respect of such obligation (except for cash paid pursuant to Paragraph 8 below).

7)Non-Assignment.  Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by you, except by will or the laws of descent and distribution.  If you or anyone claiming under or through you attempts to violate this Paragraph 7, such attempted violation shall be null and void and without effect, and the Company’s obligation to issue any Common Stock hereunder shall terminate.

8)Change in Control.  Except as set forth below, upon the occurrence of a Hostile Change in Control, the sales restrictions shall lapse and shares of Common Stock shall be issued.  Except as set forth below, upon the occurrence of a Friendly Change in Control, you shall receive in the same form of consideration as that received by shareholders generally, the undiscounted market value (at the time of grant) for your Units, and the excess of the price paid by an acquirer over such undiscounted market value shall be deferred for the shorter of two years from the date of the Friendly Change in Control or the term of any remaining restrictions (the “Deferred Period”), but your Units shall remain otherwise subject to all issuance restrictions during the Deferred Period.  Neither of the foregoing shall be effective to the extent you have tender or voting rights over shares of Common Stock held in trust with respect to any Units, in which case you would only be issued Common Stock or receive such undiscounted market value in the same form of consideration as that received by shareholders generally (and after the Deferred Period, the excess price) in respect of such Units upon successful completion of a Change in Control.  “Hostile Change in Control” means the occurrence of a Change in Control, without the prior approval of a majority of the independent members of the Incumbent Board.  “Friendly Change in Control” means any Change in Control which is not a Hostile Change in Control.

9)Equitable Adjustment.  In the event of any change in the outstanding shares of Common Stock by reason of any Common Stock dividend or split, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate exchange, or any distribution to stockholders of Common Stock other than regular cash dividends, occurring after the Date of Grant specified above, the number and kind of shares of Common Stock which may be issued with respect to Units shall be adjusted so as to reflect such change; provided that with respect to Units granted to you, any adjustments shall be made only as necessary to maintain your proportionate interest in shares of Common Stock and preserve, without exceeding, the value of such Units.

10)Treatment in Bankruptcy.  All of your claims arising from, in connection with or in any way relating to any failure of the Company to deliver to you shares of Common Stock on the date when such shares are due to be delivered under this Agreement in satisfaction of each Unit granted to you shall be deemed, in the event of a bankruptcy of the Company, to be claims for damages arising from the purchase or sale of Common Stock, within the meaning of section 510(b) of the U.S. Bankruptcy Code  and shall have in such bankruptcy the same priority as, and no greater priority than, common stock interests in the Company.

11)Amendment.  The terms of this Agreement may be amended from time to time by the Board in its sole discretion in any manner that it deems appropriate (including, but not limited to, the acceleration provisions).

12)No Right to Continued Service.  The grant of Units shall not confer on you any right to be retained in the service of the Company, or to receive subsequent Units or other Awards under the Plan.  The right of the Company to terminate your service with it at any time or as otherwise provided by any agreement between the Company and you is specifically reserved.

13)Applicable Law.  The validity, construction, interpretation, administration and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware.

14)Withholding.  The Company shall have the right to deduct from all amounts payable to you in cash, any taxes required by law to be withheld therefrom.  It shall be a condition to the obligation of the Company to issue shares of Common Stock hereunder (a) that you (or, in the event of your death, your beneficiary or any person acting on behalf of your estate) pay to the Company or its designee, upon its demand, in accordance with the Plan, such amount as may be required for the purpose of satisfying its obligation or the obligation of any other person to withhold withholding taxes incurred by reason of the  issuance of such shares of Common Stock and (b) that you (or, in the event of your death, your beneficiary or any person acting on behalf of your estate) provide the Company with any forms, documents or other information reasonably required by the Company in connection with the grant.  If the amount requested for the purpose of satisfying the withholding obligation is not paid, the Company may refuse to issue shares of Common Stock.

EX-10.4

Exhibit 10.4

LEHMAN BROTHERS HOLDINGS INC.

AGREEMENT EVIDENCING A GRANT OF A

NON-QUALIFIED STOCK OPTION

TO

	$
Number of Common Shares	Exercise Price
Subject to Options	Per Share
Date of Grant	Option Exercisability Dates

1)Grant of Options. Pursuant to the Lehman Brothers Holdings Inc. Employee Incentive Plan (the “Plan”), Lehman Brothers Holdings Inc. (the “Company”) hereby grants you, as of the Date of Grant specified above, a nonqualified stock option to purchase the number of common shares (par value $0.10 per share) of the Company (“Common Stock” or “Shares”) specified above (which number of Shares may be adjusted pursuant to Paragraph 8 below) at the price per Share specified above (the “Option Price”).

2)Additional Documents; Definitions. Enclosed you will find a copy of the Plan which is incorporated in this instrument by reference and made a part hereof, and a copy of the Plan prospectus.  The Plan and the prospectus then in effect should be carefully examined before any decision is made to exercise the option.  All capitalized terms not defined herein shall have the meaning ascribed to such terms under the Plan.

3)Exercisability. Subject to the provisions of this Agreement and the applicable provisions of the Plan, you may exercise this option as follows:

a)No part of this option may be exercised after                 (the “Expiration Date”).  In addition, unless otherwise determined by the Board of Directors (the “Board”) of the Company, no part of this option may be exercised before the Option Exercisability Dates set forth herein;

b)At any time or times on or after                and thereafter through the Expiration Date you may exercise this option as to                 Shares;

c)At any time or times on or after                 and thereafter through the Expiration Date you may exercise this option as to an additional                   Shares; and

d)At any time or times on or after                 and thereafter through the Expiration Date, you may exercise this option as to an additional                 Shares.

4)This option may not be exercised for a fraction of a Share.

5)Conditions to Exercise.  This option may not be exercised by you unless all of the following conditions are met:

a)Legal counsel for the Company must be satisfied at the time of exercise that the issuance of Shares upon exercise will be in compliance with the Securities Act of 1933, as amended, and applicable U.S. federal, state, local and foreign laws;

b)You must pay, at the time of exercise or as otherwise permitted by the Committee, the full exercise price for the Shares being acquired hereunder, by (i) paying by cash in United States dollars or other currency acceptable to the Committee (which may be in the form of a certified check), (ii) subject to the Company’s prior consent, tendering Shares owned by you which have a Fair Market Value on the day of exercise equal to the full exercise price for the Shares being acquired, (iii) subject to the Company’s prior consent, by withholding from those Shares that would otherwise be obtained upon exercise a number of Shares having a Fair Market Value equal to the option price and/or required withholding taxes, (iv) subject to the Company’s prior consent, by delivery of a properly executed exercise notice together with irrevocable instructions to a securities broker (or, in the case of pledges, lender) approved by the Company to, (a) sell shares of Common Stock subject to the option and to deliver promptly to the Company a portion of the proceeds of such sale transaction on your behalf sufficient to pay the option price, or (b) pledge shares of Common Stock subject to the option to a margin account maintained with such broker or lender, as security for a loan, and such broker or lender, pursuant to irrevocable instructions, delivers to the Company the loan proceeds, sufficient to pay the option price, or (v) by any combination of (i), (ii), (iii), or (iv) above.

c)On the date of your termination of service as a director you (or in the event of your death, your estate or any person who acquires the right to exercise this option by bequest or inheritance or by reason of your death) may exercise this option for all                shares at any time until                .

6)Limitation on Obligations.  Holdings’ obligations with respect to the options granted hereunder is limited to the delivery of shares of Common Stock on the date when you properly exercise an option granted hereunder and satisfy the Conditions to Exercise specified in Paragraph 5.

7)Non-Assignment.  This option may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed by you, except to your immediate family members and except by will or the laws of descent and distribution and is exercisable during your lifetime only by you or any immediate family members to whom options are assigned by you.  If you or anyone claiming under or through you attempts to violate this Paragraph 7, such attempted violation

shall be null and void and without effect, and the Company’s obligation to make any further payments (stock or cash) hereunder shall terminate.

8)Equitable Adjustment.  In the event of any change in the outstanding shares of Common Stock by reason of any Common Stock dividend or split, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate exchange, or any distribution to stockholders of Common Stock other than regular cash dividends, occurring after the Date of Grant specified above and prior to the exercise of the option in full, the number and kind of shares of Common Stock for which this option may then be exercised and the option price shall be adjusted so as to reflect such change.

9)Change in Control.  This option is entitled to the right described in Section 6(d) of the Plan which have been granted by the Committee; provided, however, that if the Change in Control occurs with the prior approval of a majority of the independent members of the Incumbent Board, the Limited Rights shall be effective with respect to only one-half of the options which are then not exercisable, and if applicable, in substitution of the remaining one-half of the options which are then not exercisable, an amount of cash or equity equal to the highest price paid by an acquirer in excess of the option exercise price shall be deferred for the shorter of two years or the term of any remaining restrictions but such cash or equity shall remain otherwise subject to all issuance restrictions during such period.

10)Amendment.  The terms of this Agreement may be amended from time to time by the Board in its sole discretion in any manner that it deems appropriate (including, but not limited to, the acceleration provisions).

11)No Right to Continued Service.  Neither the grant nor the exercise of the option shall confer on you any right to be retained in the service of the Company or to receive subsequent options or other Awards under the Plan.  The right of the Company to terminate your service with it at any time or as otherwise provided by any agreement between the Company and you is specifically reserved.

12)No Rights of a Stockholder.  Neither you (nor, in the event of your assignment to a family member or your death, any person acting under Paragraph 7 above) shall have any of the rights of a stockholder with respect to Shares subject to the option except to the extent that such Shares of Common Stock shall have been issued to you (or, in the event of your assignment to a family member or your death, any person acting under Paragraph 6 above) upon the exercise of the option.

13)Applicable Law.  The validity, construction, interpretation, administration and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware.

14)Withholding.  The Company shall have the right to deduct from all amounts payable to you in cash, any taxes required by law to be withheld therefrom.  It shall be a condition to the obligation of the Company to issue Shares upon exercise of an option hereunder (a) that you

(or, in the event of your death, your beneficiary or any person acting on behalf of your estate) pay to the Company or its designee, upon its demand, in accordance with the Plan, such amount as may be required for the purpose of satisfying its obligation or the obligation of any other person to withhold withholding taxes incurred by reason of the exercise of the option and (b) that you (or, in the event of your death, your beneficiary or any person acting on behalf of your estate) provide the Company with any forms, documents or other information reasonably required by the Company in connection with the grant.  If the amount requested for the purpose of satisfying the withholding obligation is not paid, the Company may refuse to furnish Shares upon exercise of the option.