CALCULATION AGENCY AGREEMENT

                (0.25% Notes Due June 1, 2008, Performance Linked

                     to a Basket of Seven Technology Stocks)





     AGREEMENT,  dated as of June 1, 2001 between Lehman Brothers  Holdings Inc.

(the "Company") and Lehman Brothers Inc., as Calculation Agent.



     WHEREAS,  the Company has authorized the issuance of $12,950,000  aggregate

principal amount of 0.25% Notes Due June 1, 2008,Performance  Linked to a Basket

of Seven Technology Stocks (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. In response to a request made by

the Trustee for a  determination  of the Maturity  Payment  Amount due at Stated

Maturity of the  Securities,  the  Redemption  Payment Amount and the Repurchase

Payment Amount,  the  Calculation  Agent shall determine such Payment Amount and

notify the Trustee of its  determination.  The  Calculation  Agent shall also be

responsible for (a) the determination of the Basket Level,





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          (b) whether adjustments to the Multipliers should be made and

          (c) whether a Market  Disruption  Event has occurred.  The Calculation

          Agent shall notify the Trustee of 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.



     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:





               (i) 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;



               (ii) 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

               whom  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;



               (iii) the Calculation Agent shall be obliged to perform only such

               duties  as  are  set  out  specifically  herein  and  any  duties

               necessarily incidental thereto;



               (iv) 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

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