Calculation of the Registration Fee

Title of Each Class of Securities Offered	Maximum Aggregate Offering Price	Amount of Registration Fee(1)(2)
Notes	$75,187,480.00	$2,308.25

(1) Calculated in accordance with Rule 457(r) of the Securities Act of 1933.

(2) Pursuant to Rule 457(p) under the Securities Act of 1933, filing fees of $1,553,329.95 have already been paid with respect to unsold securities that were previously registered pursuant to a Registration Statement on Form S-3 (No. 333-134553) filed by Lehman Brothers Holdings Inc. and the other Registrants thereto on May 30, 2006, and have been carried forward, of which $2,308.25 is offset against the registration fee due for this offering and of which $1,551,262.10 remains available for future registration fees. No additional registration fee has been paid with respect to this offering.

PRICING SUPPLEMENT NO. 1 (To prospectus dated May 30, 2006 prospectus supplement dated May 30, 2006 underlying supplement no. 120 dated July 16, 2007, underlying supplement no. 100 dated December 12, 2006, underlying supplement no. 940 dated September 21, 2007, underlying supplement no. 160 dated January 11, 2007, and product supplement no. 780-I, dated September 21, 2007) MTNI487 (NKY), MTNI491 (SPX), MTNI492 (NDX), MTNI486 (SX5E)   Return Optimization Securities Linked to an Index

Offering Potential Enhanced Returns in a Moderate-Return Environment

Lehman Brothers Holdings Inc. $2,666,260 Notes Linked to the Nikkei 225^SM Index due April 30, 2009

Lehman Brothers Holdings Inc. $52,814,490 Notes Linked to the S&P 500^® Index due April 30, 2009

Lehman Brothers Holdings Inc. $11,876,070 Notes Linked to the Nasdaq-100 Index^® due April 30, 2009

Lehman Brothers Holdings Inc. $7,830,660 Notes Linked to the Dow Jones EURO STOXX 50^® Index due April 30, 2009

Investment Description

Return Optimization Securities Linked to the Nikkei 225^SM Index (the “Nikkei 225^SM Notes”), Return Optimization Securities Linked to the S&P 500^® Index (the “S&P 500^® Notes”), Return Optimization Securities Linked to the Nasdaq-100 Index^® (the “Nasdaq-100 Notes”) and Return Optimization Securities Linked to the Dow Jones EURO STOXX 50^® Index (the “EURO STOXX 50^® Notes”) (each, a “Note” and, collectively, the “Notes”) are respective issues of Notes issued by Lehman Brothers Holdings Inc. with potential enhanced returns based on the positive performance of the applicable index. The Notes are designed to enhance returns in a moderate-return environment – meaning an environment in which stocks generally experience no more than moderate appreciation. If the applicable Index Return is positive, at maturity you will receive a cash amount per Note equal to your principal plus an amount equal to the product of the Index Return and the Leverage Factor applicable to that issue, up to the applicable Maximum Gain, providing you with an opportunity to outperform the applicable index. If the applicable Index Return is negative, at maturity you will receive your principal reduced by a percentage equal to the absolute value of the applicable Index Return. Investing in the Notes involves significant risks, including potential loss of principal and a capped appreciation at maturity.

Features

q Potential enhanced returns linked to the positive performance of the applicable index

q 3 times or 5 times leverage up to the applicable Maximum Gain on the Notes while maintaining 1-to-1 downside exposure at maturity

Key Dates

Trade Date Settlement Date Final Valuation Date* Maturity Date* October 26, 2007 October 31, 2007 April 27, 2009 April 30, 2009

* Subject to postponement in the event of a market disruption event, as described under “Description of Notes—Market Disruption Events” in the accompanying product supplement no. 780-I.

Security Offerings

We are offering four separate issues of Return Optimization Securities Linked to an Index. Each issue of Notes is linked to a particular index with a specified Leverage Factor and Maximum Gain. The performance of each issue of Notes will not depend on the performance of any other issue of Note. The return on the Note of each issue is subject to, and will not exceed, the Maximum Gain applicable to Notes of that issue. Each Note is offered at a minimum initial investment of $1,000 in denominations of $10 and integral multiples of $10 in excess thereof.

Underlying Index for each Note	Index Ticker	Leverage Factor	Maximum Gain	Index Starting Level	CUSIP	ISIN
Nikkei 225SM Index	NKY	5	33.50%	16,505.63	52522L327	US52522L3270
S&P 500® Index	SPX	3	25.00%	1,535.28	52522L335	US52522L3353
Nasdaq-100 Index®	NDX	3	27.40%	2,194.59	52522L319	US52522L3197
Dow Jones EURO STOXX 50® Index	SX5E	3	27.00%	4,440.23	52522L301	US52522L3015

See “Additional Information about Lehman Brothers Holdings Inc. and the Notes” on page 2. The Notes offered will have the terms specified in underlying supplement no. 120 dated July 16, 2007 for the Nikkei 225^SM Notes, underlying supplement no. 100 dated December 13, 2006 for the S&P 500^® Notes, underlying supplement no. 940 dated September 21, 2007 for the Nasdaq-100 Notes, underlying supplement no. 160 dated January 11, 2007 for the EURO STOXX 50^® Notes (each, an “Underlying Supplement” and, collectively, the “Underlying Supplements”), the base prospectus dated May 30, 2006, the MTN prospectus supplement dated May 30, 2006, product supplement no. 780-I dated September 21, 2007 and this pricing supplement. See “Key Risks” on page 4, the more detailed “Risk Factors” beginning on page SS-3 of product supplement no. 780-I for risks related to an investment in the Notes and “Risk Factors” beginning on page US-1 of the applicable Underlying Supplement for risks related to the applicable index.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Notes or passed upon the accuracy or the adequacy of this pricing supplement, the accompanying base prospectus, MTN prospectus supplement, product supplement no. 780-I or the Underlying Supplements or of any applicable terms supplement. Any representation to the contrary is a criminal offense. The Notes are not deposit liabilities of Lehman Brothers Holdings Inc. and are not FDIC insured.

	Price to Public		Underwriting Discount		Proceeds to Us
Offering of Notes	Total	Per Note	Total	Per Note	Total	Per Note
Nikkei 225SM Notes	$2,666,260.00	100.00%	$46,659.55	1.75%	$2,619,600.45	98.25%
S&P 500® Notes	$52,814,490.00	100.00%	$924,253.58	1.75%	$51,890,236.42	98.25%
Nasdaq-100 Notes	$11,876,070.00	100.00%	$207,831.23	1.75%	$11,668,238.77	98.25%
EURO STOXX 50® Notes	$7,830,660.00	100.00%	$137,036.55	1.75%	$7,693,623.45	98.25%

UBS Financial Services Inc. Lehman Brothers Inc.

Additional Information about Lehman Brothers Holdings Inc. and the Notes

Lehman Brothers Holdings Inc. has filed a registration statement (including a base prospectus) with the U.S. Securities and Exchange Commission, or SEC, for this offering. Before you invest, you should read this pricing supplement together with the base prospectus, as supplemented by the MTN prospectus supplement relating to our Series I medium-term notes of which the Notes are a part, and the more detailed information contained in product supplement no. 780-I (which supplements the description of the general terms of the Notes) and the applicable Underlying Supplements (which describe the Indices, including risk factors specific to each). Buyers should rely upon the base prospectus, the MTN prospectus supplement, product supplement no. 780-I, the applicable Underlying Supplement, this pricing supplement, any other relevant terms supplement and any other relevant free writing prospectus for complete details. This pricing supplement, together with the documents listed below, contains the terms of the Notes and supersedes all prior or contemporaneous communications concerning the Notes. To the extent that there are any inconsistencies among the documents listed below, this pricing supplement shall supersede product supplement no. 780-I, which shall, likewise, supersede the base prospectus and the MTN prospectus supplement. You should carefully consider, among other things, the matters set forth in “Risk Factors” in the accompanying product supplement no. 780-I and “Risk Factors” in the Underlying Supplement applicable to the relevant issue of Notes, as the Notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Notes. You may get these documents and other documents Lehman Brothers Holdings Inc. has filed for free by searching the SEC online database (EDGAR^®) at www.sec.gov, with “Lehman Brothers Holdings Inc.” as a search term or through the links below, or by calling UBS Financial Services Inc. toll-free at 1-877-827-2010 or Lehman Brothers Inc. toll-free at 1-888-603-5847.

You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):

^¨ Product supplement no. 780-I dated September 21, 2007: http://www.sec.gov/Archives/edgar/data/806085/000119312507205375/d424b2.htm

^¨ For Nikkei 225^SM Notes, underlying supplement no. 120 dated July 16, 2007: http://www.sec.gov/Archives/edgar/data/806085/000119312507155621/d424b2.htm

^¨ For S&P 500^® Notes, underlying supplement no. 100 dated December 12, 2006: http://www.sec.gov/Archives/edgar/data/806085/000095013606010223/file1.htm

^¨ For Nasdaq-100 Notes, underlying supplement no. 940 dated September 21, 2007: http://www.sec.gov/Archives/edgar/data/806085/000119312507205374/d424b2.htm

^¨ For EURO STOXX 50^® Notes, underlying supplement no. 160 dated January 11, 2007: http://www.sec.gov/Archives/edgar/data/806085/000110465907002078/a07-1299_5424b2.htm

^¨ MTN Prospectus supplement dated May 30, 2006: http://www.sec.gov/Archives/edgar/data/806085/000104746906007785/a2170815z424b2.htm

^¨ Base Prospectus dated May 30, 2006: http://www.sec.gov/Archives/edgar/data/806085/000104746906007771/a2165526zs-3asr.htm

References to “Lehman Brothers,” “we,” “our” and “us” refer only to Lehman Brothers Holdings Inc. and not to its consolidated subsidiaries. In this document, “Notes” refer collectively to the four different issues of Return Optimization Securities Linked to an Index that are offered hereby, unless the context otherwise requires.

Investor Suitability

The Notes may be suitable for you if, among other considerations:

^¨ You believe that the index to which your Notes are linked will appreciate moderately—meaning that you believe the applicable index will appreciate over the term of the Notes and that such appreciation, as leveraged by the Leverage Factor, is unlikely to exceed the indicative Maximum Gain at maturity applicable to such Notes

^¨ You are willing to risk losing some or all of your investment

^¨ You are willing to hold the Notes to maturity

^¨ You do not seek current income from this investment

^¨ You are willing to invest in the Notes based on the Maximum Gain applicable to your Notes

^¨ You are willing to invest in securities for which there may be little or no secondary market

^¨ You are willing to forgo dividends paid on the stocks included in the applicable index

The Notes may not be suitable for you if, among other considerations:

^¨ You are unable or unwilling to hold the Notes to maturity

^¨ You do not believe the applicable index will appreciate over the term of the Notes, or you believe the leveraged Index Return at maturity will be greater than the Maximum Gain applicable to such Notes

^¨ You prefer the lower risk, and therefore accept the potentially lower returns, of fixed income investments with comparable maturities and credit ratings

^¨ You seek current income from your investments

^¨ You seek an investment for which there will be an active secondary market

^¨ You seek an investment that offers principal protection when the Notes are held to maturity

^¨ You prefer to receive dividends paid on any stocks included in the applicable index

^¨ You are unwilling to make an investment that is exposed to full downside performance risk of the applicable index

The suitability considerations identified above are not exhaustive. Whether or not the Notes are a suitable investment for you will depend on your individual circumstances, and you should reach an investment decision only after you and your investment, legal, tax, accounting, and other advisors have carefully considered the suitability of an investment in the Notes in light of your particular circumstances. You should also review carefully the “Key Risks” on page 4, “Risk Factors” in product supplement no. 780-I, each applicable Underlying Supplement and the MTN prospectus supplement for risks related to an investment in the Notes.

2

Final Terms

Issuer	Lehman Brothers Holdings Inc. (A+/A1/AA-)1
Issue Price	$10 per Note
Term	18 months
Principal Protection	None. You may lose the entire principal amount of your investment.
Payment at Maturity (per $10)	If the product of the applicable Index Return (as defined below) and the applicable Leverage Factor is equal to or greater than the applicable Maximum Gain, you will receive a cash payment, per $10 Note principal amount, equal to: $10 + [$10 × Maximum Gain]
	If the product of the applicable Index Return and the applicable Leverage Factor is positive but less than the applicable Maximum Gain, you will receive a cash payment, per $10 Note principal amount, equal to: $10 + [$10 × Index Return × Leverage Factor]
	If the applicable Index Return is negative or zero, you will receive a cash payment, per $10 Note principal amount, equal to: $10 + [$10 × Index Return] In this scenario, you could lose some or all of your principal, depending on how much the applicable index declines.
Index Return	Index Ending Level - Index Starting Level Index Starting Level
Leverage Factor	Nikkei 225SM Notes	5
	S&P 500® Notes	3
	Nasdaq-100 Notes	3
	EURO STOXX 50® Notes	3
Maximum Gain	Nikkei 225SM Notes	33.50%
	S&P 500® Notes	25.00%
	Nasdaq-100 Notes	27.40%
	EUROSTOXX 50® Notes	27.00%
Index Starting Level	Nikkei 225SM Index	16,505.63
	S&P 500® Index	1,535.28
	Nasdaq-100 Index	2,194.59
	EURO STOXX 50® Index	4,440.23
Index Ending Level	The closing level of the applicable index on the Final Valuation Date

Determining Payment at Maturity

¹ Lehman Brothers Holdings Inc. is rated A+ by Standard & Poor’s, A1 by Moody’s and AA- by Fitch. A credit rating reflects the creditworthiness of Lehman Brothers Holdings Inc. and is not a recommendation to buy, sell or hold securities, and it may be subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated independently of any other rating. The creditworthiness of the issuer does not affect or enhance the likely performance of the investment other than the ability of the issuer to meet its obligations.

3

What are the tax consequences of the Notes?

Lehman Brothers Holdings Inc. intends to treat, and by purchasing a Note, for all tax purposes, you agree to treat, a Note as a cash-settled financial contract, rather than as a debt instrument. See “Certain U.S. Federal Income Tax Consequences” in the accompanying product supplement no. 780-I.

Key Risks

An investment in the Notes involves significant risks. Investing in the Notes is not equivalent to investing directly in the index to which the applicable issue of Notes is linked or any of the stocks included in that index. These risks are explained in more detail in the “Risk Factors” section of the accompanying product supplement no. 780-I and in the “Risk Factors” section of the applicable accompanying Underlying Supplement. You should reach an investment decision only after you have carefully considered with your advisors the suitability of an investment in the Notes in light of your particular circumstances.

^¨ Potentially Full Market Risk; You May Lose Some or All Your Principal: The return on the Notes of each issue at maturity is linked to the performance of the applicable index and will depend on whether, and the extent to which, the applicable Index Return is positive. If the applicable Index Ending Level is less than the applicable Index Starting Level, you will lose 1% of your principal for every 1% of the amount by which the applicable Index Ending Level is less than the applicable Index Starting Level. YOU MAY LOSE THE ENTIRE PRINCIPAL AMOUNT OF YOUR INVESTMENT.

^¨ Maximum Gain: A direct leveraged investment in the applicable index may exceed the applicable Maximum Gain. YOU WILL NOT RECEIVE A RETURN ON THE NOTES GREATER THAN THE APPLICABLE MAXIMUM GAIN EVEN IF THE PRODUCT OF THE APPLICABLE INDEX RETURN AND THE LEVERAGE FACTOR IS GREATER THAN THE APPLICABLE MAXIMUM GAIN.

^¨ No Interest or Dividend Payments or Voting Rights: As a holder of the Notes, you will not receive interest payments, and you will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of stocks included in the applicable index would have.

^¨ Certain Built-in Costs are Likely to Adversely Affect the Value of the Notes Prior to Maturity: While the payment at maturity described in this pricing supplement is based on the full principal amount of your Notes, the original issue price of the Notes includes the agent’s commission and the cost of hedging our obligations under the Notes through one or more of our affiliates, which includes our affiliates’ expected cost of providing such hedge as well as the profit our affiliates expect to realize in consideration for assuming the risks inherent in providing such hedge. As a result, the price, if any, at which Lehman Brothers Inc. will be willing to purchase Notes from you in secondary market transactions, if at all, will likely be lower than the original issue price and any sale prior to the Maturity Date could result in a substantial loss to you. The Notes are not designed to be short-term trading instruments. YOU SHOULD BE WILLING TO HOLD YOUR NOTES TO MATURITY.

^¨ Dealer Incentives: We, our affiliates and agents, and UBS Financial Services Inc., and its affiliates, act in various capacities with respect to the Notes. Lehman Brothers Inc. and other of our and their affiliates may act as a principal, agent or dealer in connection with the Notes. Such affiliates, including the sales representatives, will derive compensation from the distribution of the Notes, and such compensation may serve as an incentive to sell the Notes instead of other investments. We will pay compensation of $0.175 per $10 principal amount Note to the principals, agents and dealers in connection with the distribution of the Notes.

^¨ Lack of Liquidity: The Notes will not be listed on any securities exchange. Lehman Brothers Inc. intends to offer to purchase the Notes in the secondary market but is not required to do so. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the Notes easily. Because other dealers are not likely to make a secondary market for the Notes, the price at which you may be able to trade your Notes is likely to depend on the price, if any, at which Lehman Brothers Inc. is willing to buy the Notes. If you are an employee of Lehman Brothers Holdings Inc. or one of our affiliates, you may not be able to purchase the Notes from us and your ability to sell or trade the Notes in the secondary market may be limited.

^¨ Potential Conflicts: We and our affiliates play a variety of roles in connection with the issuance of the Notes, including acting as calculation agent and hedging our obligations under the Notes. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the Notes.

4

^¨ We and our Affiliates and Agents May Publish Research, Express Opinions or Provide Recommendations that are Inconsistent with Investing in or Holding the Notes. Any Such Research, Opinions or Recommendations Could Affect the Level of the Index and, Consequently, the Value of the Notes: We, our affiliates and agents publish research from time to time on financial markets and other matters that may influence the value of the Notes, or express opinions or provide recommendations that may be inconsistent with purchasing or holding the Notes. We, our affiliates and agents may publish or may have published research or other opinions that are inconsistent with an investment position in the Nikkei 225^SM Index, the S&P 500^® Index, the Nasdaq-100 Index^® or the Dow Jones EURO STOXX 50^® Index. Any research, opinions or recommendations expressed by us, our affiliates or agents may not be consistent with each other and may be modified from time to time without notice. Additionally, UBS Financial Services Inc. and its affiliates may publish or may have published research or other opinions that are inconsistent with an investment position in the Nikkei 225^SM Index, the S&P 500^® Index, the Nasdaq-100 Index^® or the Dow Jones EURO STOXX 50^® Index. Investors should make their own independent investigation of the merits of investing in the Notes.

^¨ Credit of Issuer: An investment in the Notes will be subject to the credit risk of Lehman Brothers Holding Inc., and the actual and perceived creditworthiness of Lehman Brothers Holdings Inc. may affect the market value of the Notes.

^¨ Many Economic and Market Factors Will Impact the Value of the Notes: In addition to the level of the applicable index on any day, the value of the Notes will be affected by a number of economic and market factors that may either offset or magnify each other and which are set out in more detail in the product supplement no. 780-I.

^¨ Uncertain Tax Treatment: Significant aspects of the tax treatment of the Notes are uncertain. You should consult your own tax advisor about your own tax situation before investing in the Notes.

Risks Specific to an Investment in the S&P 500^® Notes

^¨ We are One of the Companies that Make up the S&P 500^® Index: We are one of the companies that make up the S&P 500^® Index. We will not have any obligation to consider your interests as a holder of the S&P 500^® Notes in taking any corporate action that might affect the level of the S&P 500^® Index and the value of the S&P 500^® Notes.

Risks Specific to an Investment in the EURO STOXX 50^® Notes or the Nikkei 225^SM Notes

^¨ The Applicable Index Return Will Not Be Adjusted for Changes in Exchange Rates Relative to the U.S. Dollar: The value of your Notes will not be adjusted for exchange rate fluctuations between the U.S. dollar and the currencies in which the stocks included in the Dow Jones EURO STOXX 50^® Index and the Nikkei 225^SM Index are based. Therefore, if the currencies in which the stocks included in the Dow Jones EURO STOXX 50^® Index or the Nikkei 225^SM Index are denominated appreciate or depreciate relative to the U.S. dollar over the term of the EURO STOXX 50^® Notes and the Nikkei 225 ^SM Notes, as applicable, you will not receive any additional payment or incur any reduction in your return, if any, at maturity.

^¨ Non-U.S. Securities Markets Risks: The stocks included in the Dow Jones EURO STOXX 50^® Index and the Nikkei 225^SM Index are issued by foreign companies in foreign securities markets. These stocks may be more volatile and may be subject to different political, market, economic, exchange rate, regulatory and other risks. This may have a negative impact on the performance of the EURO STOXX 50^® Notes and the Nikkei 225^SM Notes, as applicable.

5

Nikkei 225^SM Index

The Nikkei 225^SM Index is published and disseminated by Nikkei Inc. As discussed more fully in underlying supplement no. 120 under the heading “The Nikkei 225^SM Index”, the Nikkei 225^SM Index is a modified, price-weighted average of 225 Japanese companies listed in the First Section of the Tokyo Stock Exchange that measures the composite price performance of selected Japanese stocks. The 225 companies included in the Nikkei 225^SM Index are divided into six sector categories: Technology, Financials, Consumer Goods, Materials, Capital Goods/Others and Transportation and Utilities.

You can obtain the level of the Nikkei 225^SM Index at any time from the Bloomberg Financial Markets page “NKY <Index> <GO>“ or from the Nikkei Inc. website at www.nni.nikkei.co.jp.

The graph below illustrates the performance of the Nikkei 225^SM Index from October 24, 1997 to October 26, 2007. The historical levels of the Nikkei 225^SM Index should not be taken as an indication of future performance.

Source: Bloomberg L.P.

The Nikkei 225^SM Index closing level on October 26, 2007 was 16,505.63.

The information on the Nikkei 225^SM Index provided in this document should be read together with the discussion under the heading “The Nikkei 225^SM Index” beginning on page US-3 of underlying supplement no. 120. Information contained in the Nikkei Inc. website referenced above is not incorporated by reference in, and should not be considered a part of, this pricing supplement.

Scenario Analysis and Examples at Maturity for the Nikkei 225^SM Notes

The following scenario analysis and examples for the Nikkei 225^SM Notes reflect the Leverage Factor of 5 and the Maximum Gain of 33.50% and assume a range of Nikkei 225^SM Index Returns from +40% to -40%.

Example 1—On the Final Valuation Date, the Nikkei 225^SM Index closes 5% above the Index Starting Level. Since the Index Return is 5%, you will receive five times the Index Return, or a 25% total return, and the payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × 5% × 5) = $10.00 + $2.50 = $12.50.

Example 2—On the Final Valuation Date, the Nikkei 225^SM Index closes 10% above the Index Starting Level. Since five times the Index Return of 10% is more than the Maximum Gain of 33.50%, you will receive the Maximum Gain of 33.50%, or $13.35 per $10 principal amount Note.

Example 3—On the Final Valuation Date, the Nikkei 225^SM Index closes 10% below the Index Starting Level. Since the Index Return is -10%, your investment will be fully exposed to the decline of the Nikkei 225^SM Index and your payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × -10%) = $10.00 – $1.00 = $9.00.

6

S&P 500^® Index

The Standard & Poor’s 500^® Index (the “S&P 500^® Index”) is published by Standard & Poor’s (“S&P”), a division of The McGraw-Hill Companies, Inc. As discussed more fully in underlying supplement no. 100 under the heading “The S&P 500^® Index”, the S&P 500^® Index is intended to provide a performance benchmark for the U.S. equity markets. The calculation of the level of the S&P 500^® Index is based on the relative value of the aggregate market value of the common stocks of 500 companies as of a particular time compared to the aggregate average market value of the common stocks of 500 similar companies during the base period of the years 1941 through 1943. Ten main groups of companies comprise the S&P 500^® Index, with the number of companies included in each group as of September 30, 2007 indicated below: Consumer Discretionary (88); Consumer Staples (39); Energy (33); Financials (93); Health Care (53); Industrials (53); Information Technology (73); Materials (28); Telecommunications Services (9); and Utilities (31).

You can obtain the level of the S&P 500^® Index at any time from the Bloomberg Financial Markets page “SPX <Index> <GO>“ or from the S&P website at www.spglobal.com.

The graph below illustrates the performance of the S&P 500^® Index from October 24, 1997 to October 26, 2007. The historical levels of the S&P 500^® Index should not be taken as an indication of future performance.

Source: Bloomberg L.P.

The S&P 500^® Index closing level on October 26, 2007 was 1,535.28.

The information on the S&P 500^® Index provided in this document should be read together with the discussion under the heading “The S&P 500^® Index” beginning on page US-2 of underlying supplement no. 100. Information contained in the S&P website referenced above is not incorporated by reference in, and should not be considered a part of, this pricing supplement.

Scenario Analysis and Examples at Maturity for the S&P 500^® Notes

The following scenario analysis and examples for the S&P 500^® Notes reflect the Leverage Factor of 3 and the Maximum Gain of 25.00% and assume a range of S&P 500^® Index Returns from +40% to -40%.

Example 1—On the Final Valuation Date, the S&P 500^® Index closes 5% above the Index Starting Level. Since the Index Return is 5%, you will receive three times the Index Return, or a 15% total return, and the payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × 5% × 3) = $10.00 + $1.50 = $11.50.

Example 2—On the Final Valuation Date, the S&P 500^® Index closes 10% above the Index Starting Level. Since three times the Index Return of 10% is more than the Maximum Gain of 25.00%, you will receive the Maximum Gain of 25.00%, or $12.50 per $10 principal amount Note.

Example 3—On the Final Valuation Date, the S&P 500^® Index closes 10% below the Index Starting Level. Since the Index Return is -10%, your investment will be fully exposed to the decline of the S&P 500^® Index and your payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × -10%) = $10.00 – $1.00 = $9.00.

7

Nasdaq-100 Index^®

The Nasdaq-100 Index^® is calculated, maintained, published and disseminated by the Nasdaq Stock Market, Inc. (“Nasdaq”) As discussed more fully in underlying supplement no. 940 under the heading “The Nasdaq-100 Index^®”, the Nasdaq-100 Index^® is a modified market capitalization-weighted index of 100 of the largest stocks of non-financial companies listed on the Nasdaq Global Market or Nasdaq Global Select Market tiers of the Nasdaq. A current list of the stocks that comprise the Nasdaq-100 Index^® is available on the Nasdaq website at www.nasdaq.com.

You can obtain the level of the Nasdaq-100 Index^® at any time from the Bloomberg Financial Markets page “NDX <Index> <GO>“ or from the Nasdaq website at www.nasdaq.com.

The graph below illustrates the performance of the Nasdaq-100 Index^® from October 24, 1997 to October 26, 2007. The historical levels of the Nasdaq-100 Index^® should not be taken as an indication of future performance.

Source: Bloomberg L.P.

The Nasdaq-100 Index^® closing level on October 26, 2007 was 2,194.59.

The information on the Nasdaq-100 Index^® provided in this document should be read together with the discussion under the heading “The Nasdaq-100 Index^®” beginning on page US-2 of underlying supplement no. 940. Information contained in the Nasdaq website referenced above is not incorporated by reference in, and should not be considered a part of, this pricing supplement.

Scenario Analysis and Examples at Maturity for the Nasdaq-100 Notes

The following scenario analysis and examples for the Nasdaq-100 Notes reflect the Leverage Factor of 3 and the Maximum Gain of 27.40% and assume a range of Nasdaq-100 Index^® Index Returns from +40% to -40%.

Example 1—On the Final Valuation Date, the Nasdaq-100 Index^® closes 5% above the Index Starting Level. Since the Index Return is 5%, you will receive three times the Index Return, or a 15% total return, and the payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × 5% × 3) = $10.00 + $1.50 = $11.50.

Example 2—On the Final Valuation Date, the Nasdaq-100 Index^® closes 10% above the Index Starting Level. Since three times the Index Return of 10% is more than the Maximum Gain of 27.40%, you will receive the Maximum Gain of 27.40%, or $12.74 per $10 principal amount Note.

Example 3—On the Final Valuation Date, the Nasdaq-100 Index^® closes 10% below the Index Starting Level. Since the Index Return is -10%, your investment will be fully exposed to the decline of the Nasdaq-100 Index^® and your payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × -10%) = $10.00 – $1.00 = $9.00.

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Dow Jones EURO STOXX 50^® Index

The Dow Jones EURO STOXX 50^® Index was created by STOXX Limited, a joint venture between Deutsche Börse AG, Dow Jones & Company, Inc. and SWX Group. As discussed more fully in underlying supplement no. 160 under the heading “The Dow Jones EURO STOXX 50^® Index”, the Dow Jones EURO STOXX 50^® Index is composed of 50 component stocks of market sector leaders from within the Dow Jones EURO STOXX 50^® Index, which includes stocks selected from the Eurozone. The component stocks have a high degree of liquidity and represent the largest companies across all market sectors defined by the Dow Jones Global Classification Standard. Changes in the composition of the Dow Jones EURO STOXX 50^® Index are made annually to ensure that the Dow Jones EURO STOXX 50^® Index includes the 50 market sector leaders from within the Dow Jones EURO STOXX 50^® Index. A current list of the issuers that comprise the Dow Jones EURO STOXX 50^® Index is available on the STOXX Limited website at www.stoxx.com.

You can obtain the level of the Dow Jones EURO STOXX 50^® Index at any time from the Bloomberg Financial Markets page “SX5E <Index> <GO>“ or from the STOXX Limited website at www.stoxx.com.

The graph below illustrates the performance of the Dow Jones EURO STOXX 50^® Index from October 24, 1997 to October 26, 2007. The historical levels of the Dow Jones EURO STOXX 50^® Index should not be taken as an indication of future performance.

Source: Bloomberg L.P.

The Dow Jones EURO STOXX 50^® Index closing level on October 26, 2007 was 4,440.23.

The information on the Dow Jones EURO STOXX 50^® Index provided in this document should be read together with the discussion under the heading “The Dow Jones EURO STOXX 50^® Index” beginning on page US-3 of underlying supplement no. 160. Information contained in the STOXX Limited website referenced above is not incorporated by reference in, and should not be considered a part of, this pricing supplement.

Scenario Analysis and Examples at Maturity for the EURO STOXX 50^® Notes

The following scenario analysis and examples for the EURO STOXX 50^® Notes reflect the Leverage Factor of 3 and the Maximum Gain of 27.00% and assume a range of Dow Jones EURO STOXX 50^® Index Returns from +40% to -40%.

Example 1—On the Final Valuation Date, the Dow Jones EURO STOXX 50^® Index closes 5% above the Index Starting Level. Since the Index Return is 5%, you will receive three times the Index Return, or a 15% total return, and the payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × 5% × 3) = $10.00 + $1.50 = $11.50.

Example 2—On the Final Valuation Date, the Dow Jones EURO STOXX 50^® Index closes 10% above the Index Starting Level. Since three times the Index Return of 10% is more than the Maximum Gain of 27.00%, you will receive the Maximum Gain of 27.00%, or $12.70 per $10 principal amount Note.

Example 3—On the Final Valuation Date, the Dow Jones EURO STOXX 50^® Index closes 10% below the Index Starting Level. Since the Index Return is -10%, your investment will be fully exposed to the decline of the Dow Jones EURO STOXX 50^® Index and your payment at maturity per $10 principal amount Note will be calculated as follows:

$10.00 + ($10.00 × -10%) = $10.00 – $1.00 = $9.00.

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Supplemental Plan of Distribution

We have agreed to sell to UBS Financial Services Inc. and Lehman Brothers Inc. (together, the “Agents”), and the Agents will agree to purchase, all of the Notes at the price indicated on the cover of this pricing supplement. UBS Financial Services Inc. may allow a concession not in excess of the underwriting discount to its affiliates.

We have agreed to indemnify the Agents against liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments that the Agents may be required to make relating to these liabilities as described in the MTN prospectus supplement and the base prospectus. We have agreed that UBS Financial Services Inc. may sell all or a part of the Notes that it purchases from us to its affiliates at the price that will be indicated on the cover of this pricing supplement that will be available in connection with the sales of the Notes.

Subject to regulatory constraints, Lehman Brothers Inc. has agreed to use reasonable efforts to make a market in the Notes for so long as the Notes are outstanding.

We have, or our affiliate has, entered into swap agreements or related hedge transactions with one of our other affiliates or unaffiliated counterparties in connection with the sale of the Notes and the Agents and/or an affiliate may earn additional income as a result of payments pursuant to the swap or related hedge transactions.

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