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)

March 31, 2006

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 1.01.Entry into a Material Definitive Agreement.

Lehman Brothers Holdings Inc. may, from time to time in the future, grant various awards to its directors under the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan, as amended. Forms of award grant agreements are attached hereto as exhibits and are hereby incorporated by reference.

Item 9.01Financial Statements and Exhibits

(d)Exhibits.

10.1Form of Agreement evidencing a grant of Restricted Stock Units to Directors under the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan, as amended.

10.2Form of Agreement evidencing a grant of Nonqualified Stock Options to Directors under the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan, as amended.

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SIGNATURE

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

	LEHMAN BROTHERS HOLDINGS INC.
Date:    March 31, 2006	By:	/s/ James J. Killerlane III
		Name: James J. Killerlane III
		Title: Vice President and Assistant Secretary

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EXHIBIT INDEX

10.1	Form of Agreement evidencing a grant of Restricted Stock Units to Directors under the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan, as amended.
10.2	Form of Agreement evidencing a grant of Nonqualified Stock Options to Directors under the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan, as amended.

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EX-10.1

Exhibit 10.1

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. 2005 Stock 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 the 30^th day following 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.

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, and shall be consistent with the provisions of Code Section 409A.

10)Code Section 409A. It is intended that none of the Units or payments otherwise due hereunder shall be deferred, accelerated, extended, paid out or modified in a manner that would result in the imposition upon you of an additional tax under Section 409A of the Code; provided that neither Holdings nor any of its employees or representatives shall have any liability to you with respect to any such taxes. In the event that it is reasonably determined that, as a result of Section 409A of the Code, payments hereunder may not be made at the time contemplated by the terms of this Agreement or the Plan, as the case may be, without causing you to be subject to taxation under Section 409A of the Code, Holdings will make such payment on the first day that would not result in your incurring any tax liability under Section 409A of the Code.

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.

EX-10.2

Exhibit 10.2

LEHMAN BROTHERS HOLDINGS INC.

AGREEMENT EVIDENCING A GRANT OF A

NON-QUALIFIED STOCK OPTION

TO

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

1)Grant of Options. Pursuant to the Lehman Brothers Holdings Inc. 2005 Stock 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 toShares;

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, 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, delivering 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 [specified amount] shares at any time until [specified date].

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, and shall be consistent with the provisions of Code Section 409A.

9)Change in Control. The option holder has the right to surrender the stock option or any portion thereof to the Company within 30 days following a Change in Control and to receive from the Company in exchange therefor a cash payment in an amount equal to (a) the number of unexercised shares of Common Stock under the option which are being surrendered multiplied by (b) the excess of (i) the greater of (A) the price per share of Common Stock paid in connection with the Change in Control or (B) the highest Fair Market Value per share of Common Stock in the 90-day period preceding such Change in Control, over (ii) the purchase price of the option as set forth in the underlying option agreement (the foregoing, a “Limited Right”).; provided, however, that if a Friendly Change in Control occurs, the Limited Right 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, provided further that no such deferral will subject the option to additional taxation under Code Section 409A.

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.