CALCULATION AGENCY AGREEMENT





                  CALCULATION  AGENCY  AGREEMENT,  dated as of March 21,  2003

(the  "Agreement"),  between  Lehman Brothers Holdings Inc. (the "Company")

and Lehman Brothers Inc., as Calculation Agent.



                  WHEREAS, the Company has authorized the issuance of up to

$17,250,000 aggregate principal amount of YEELDS(TM) 10% Yield Enhanced Equity

Linked Debt Securities Due March 21, 2004 (the "Securities")*;



                  WHEREAS, the Securities will be issued under an Indenture,

dated as of September 1, 1987, between the Company and Citibank, N.A., as

Trustee (the "Trustee"), as supplemented and amended by supplemental indentures

dated as of November 25, 1987, November 27, 1990, September 13, 1991, October 4,

1993, October 1, 1995, and June 26, 1997, and incorporating Standard Multiple

Series Indenture Provisions dated July 30, 1987, as amended November 16, 1987

(collectively, the "Indenture"); and



                  WHEREAS, the Company requests the Calculation Agent to perform

certain services described herein in connection with the Securities;



                  NOW THEREFORE, the Company and the Calculation Agent agree as

follows:



                  1. Appointment of Agent. The Company hereby appoints Lehman

         Brothers Inc. as Calculation Agent and Lehman Brothers Inc. hereby

         accepts such appointment as the Company's agent for the purpose of

         performing the services hereinafter described upon the terms and

         subject to the conditions hereinafter mentioned.



                  2. Calculations and Information Provided. The Calculation

         Agent shall determine (a) the Maturity Payment Amount, (b) the

         Settlement Value, (c) the Closing Price of each Settlement Value

         Security on the Valuation Date, (d) the Multipliers for each of the

         Settlement Value Securities, (e) whether adjustments to the Multipliers

         should be made and (f) whether a Market Disruption Event has occurred.

         The Calculation Agent shall notify the Trustee of all such

         determinations and any such adjustment or if a Market Disruption Event

         has occurred. Annex A hereto sets forth the procedures the Calculation

         Agent will use to determine the information described in this Section

         2.



                  3. Calculations. Any calculation or determination by the

         Calculation Agent pursuant hereto shall (in the absence of manifest

         error) be final and binding. Any calculation made by the Calculation

         Agent hereunder shall, at the Trustee's request, be made available at

         the Corporate Trust Office.



*        "YEELDS" is a trademark of Lehman Brothers Inc.







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                  4. Fees and Expenses. The Calculation Agent shall be entitled

         to reasonable compensation for all services rendered by it as agreed to

         between the Calculation Agent and the Company.



                  5. Terms and Conditions. The Calculation Agent accepts its

         obligations herein set out upon the terms and conditions hereof,

         including the following, to all of which the Company agrees:



                  (a) in acting under this Agreement, the Calculation Agent is

         acting solely as an independent expert of the Company and does not

         assume any obligation toward, or any relationship of agency or trust

         for or with, any of the holders of the Securities;



                  (b) unless otherwise specifically provided herein, any order,

         certificate, notice, request, direction or other communication from the

         Company or the Trustee made or given under any provision of this

         Agreement shall be sufficient if signed by any person who the

         Calculation Agent reasonably believes to be a duly authorized officer

         or attorney-in-fact of the Company or the Trustee, as the case may be;



                  (c) the Calculation Agent shall be obliged to perform only

         such duties as are set out specifically herein and any duties

         necessarily incidental thereto;



                  (d) the Calculation Agent, whether acting for itself or in any

         other capacity, may become the owner or pledgee of Securities with the

         same rights as it would have had if it were not acting hereunder as

         Calculation Agent; and



                  (e) the Calculation Agent shall incur no liability hereunder

         except for loss sustained by reason of its gross negligence or wilful

         misconduct.



                  6. Resignation; Removal; Successor. (a) The Calculation Agent

         may at any time resign by giving written notice to the Company of such

         intention on its part, specifying the date on which its desired

         resignation shall become effective, subject to the appointment of a

         successor Calculation Agent and acceptance of such appointment by such

         successor Calculation Agent, as hereinafter provided. The Calculation

         Agent hereunder may be removed at any time by the filing with it of an

         instrument in writing signed by or on behalf of the Company and

         specifying such removal and the date when it shall become effective.

         Such resignation or removal shall take effect upon the appointment by

         the Company, as hereinafter provided, of a successor Calculation Agent

         and the acceptance of such appointment by such successor Calculation

         Agent. In the event a successor Calculation Agent has not been

         appointed and has not accepted its duties within 90 days of the

         Calculation Agent's notice of resignation, the Calculation Agent may

         apply to any court of competent jurisdiction for the designation of a

         successor Calculation Agent.





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                  (b) In case at any time the Calculation Agent shall resign, or

         shall be removed, or shall become incapable of acting, or shall be

         adjudged bankrupt or insolvent, or make an assignment for the benefit

         of its creditors or consent to the appointment of a receiver or

         custodian of all or any substantial part of its property, or shall

         admit in writing its inability to pay or meet its debts as they mature,

         or if a receiver or custodian of it or all or any substantial part of

         its property shall be appointed, or if any public officer shall have

         taken charge or control of the Calculation Agent or of its property or

         affairs, for the purpose of rehabilitation, conservation or

         liquidation, a successor Calculation Agent shall be appointed by the

         Company by an instrument in writing, filed with the successor

         Calculation Agent. Upon the appointment as aforesaid of a successor

         Calculation Agent and acceptance by the latter of such appointment, the

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