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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) January 23, 1998
_______________
SSBH Capital I
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 001-13827 06-6452992
_______________ ___________ ___________________
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
c/o Salomon Smith Barney Holdings Inc.
388 Greenwich Street, New York, NY 10013
________________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(212) 816-6000
______________________________________________________________________________
(Registrant's telephone number, including area code)
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SALOMON SMITH BARNEY HOLDINGS INC.
CURRENT REPORT ON FORM 8-K
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits:
Exhibit No. Description
1.01 Underwriting Agreement, dated January 23, 1998,
among SSBH Capital I, Salomon Smith Barney Holdings
Inc., and Smith Barney Inc., A.G. Edwards & Sons,
Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, PaineWebber
Incorporated and Prudential Securities Incorporated,
as representatives of the several underwriters,
relating to the offer and sale of the 7.200% Trust
Preferred Securities (TRUPS (r)) of SSBH Capital I.
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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.
Dated: January 27, 1998 SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ Mark I. Kleinman
--------------------------------
Mark I. Kleinman
Deputy Treasurer
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EXHIBIT INDEX
Exhibit No. Description
1.01 Underwriting Agreement, dated January 23, 1998,
among SSBH Capital I, Salomon Smith Barney Holdings
Inc., and Smith Barney Inc., A.G. Edwards & Sons,
Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, PaineWebber Incorporated
and Prudential Securities Incorporated, as
representatives of the several undewriters, relating
to the offer and sale of the 7.200% Trust Preferred
Securities (TRUPS (r)) of SSBH Capital I.
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16,000,000
TRUST PREFERRED SECURITIES
SSBH CAPITAL I
7.200% Trust Preferred Securities (TRUPS(R))
(Liquidation amount $25 per Trust Preferred Security)
guaranteed to the extent set forth in the Prospectus
Supplement dated January 23, 1998 by
SALOMON SMITH BARNEY HOLDINGS INC.
UNDERWRITING AGREEMENT
January 23, 1998
SMITH BARNEY INC.
A. G. EDWARDS & SONS, INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
SSBH Capital I (the "Trust"), a statutory business trust organized under
the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Business Code, 12 Del. C. Section 3801 et seq.),
proposes, upon the terms and conditions set forth herein, to issue and sell
7.200% Trust Preferred Securities (TRUPS(R)) with an aggregate liquidation
amount equal to $400,000,000 (the "Preferred Securities") to the several
Underwriters named in Schedule I hereto (the "Underwriters") for whom you (the
"Representatives") are acting as representatives.
The Preferred Securities are to be issued pursuant to the terms of a
declaration of trust, dated as of December 19, 1996 as amended and restated as
of January 28, 1998 (the "Declaration"), among Salomon Smith Barney Holdings
Inc., a Delaware corporation (the "Company" and, together with the Trust, the
"Offerors"), as sponsor, the trustees named therein (the "SSBH Trustees") and
the holders from time to time of undivided beneficial interests in the assets of
the Trust. The Declaration is qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Pursuant to the
Declaration, the number of SSBH Trustees will initially be four. Two of the SSBH
Trustees (the "Regular Trustees") will be persons who are employees or officers
of, or affiliated with, the Company. The third SSBH Trustee will be a financial
institution unaffiliated with the Company that will serve as property trustee
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under the Declaration and as indenture trustee with respect to the Preferred
Securities for purposes of the Trust Indenture Act (the "Institutional
Trustee"). In addition, unless the Institutional Trustee maintains a principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, one SSBH Trustee will have a principal place of business or
reside in the State of Delaware, and meet the requirements of the Delaware Act
(the "Delaware Trustee"). Initially, The Chase Manhattan Bank, a New York
banking association ("Chase"), will act as the Institutional Trustee and Chase
Manhattan Bank Delaware, a banking association with its principal place of
business in the State of Delaware, will act as the Delaware Trustee until
removed or replaced by the holder of the Common Securities. The Preferred
Securities will be guaranteed by the Company on a subordinated basis with
respect to distributions and payments upon liquidation, redemption or otherwise
(the "Guarantee") pursuant to the Preferred Securities Guarantee Agreement dated
as of January 28, 1998 (the "Guarantee Agreement") between the Company and
Chase, as Trustee (the "Guarantee Trustee"). The assets of the Trust will
consist of 7.200% Junior Subordinated Deferrable Interest Debentures due January
28, 2038 (the "Subordinated Debentures") of the Company which will be issued
under an indenture, dated as of January 28, 1998 (the "Indenture"), between the
Company and Chase, as Trustee (the "Indenture Trustee"). Under certain
circumstances, the Subordinated Debentures will be distributable to the holders
of undivided beneficial interests in the assets of the Trust. The Preferred
Securities, the Guarantee and the Subordinated Debentures are referred to herein
as the "Securities."
The Offerors wish to confirm as follows their agreement with you and the
other several Underwriters on whose behalf you are acting, in connection with
the several purchases of the Preferred Securities by the Underwriters.
1. Representations and Warranties. The Offerors represent and warrant to,
and agree with, each of you as set forth below in this Section 1.
(a) A registration statement on Form S-3 (File No. 333-38931), including a
prospectus, relating to the Securities has been prepared by the Company in
conformity in all material respects with the requirements of the Securities Act
of 1933, as amended (the "Act"), the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission and has become effective.
Such registration statement and prospectus may have been amended or supplemented
from time to time prior to the date of this Agreement; any such amendment to the
Registration Statement was so prepared and filed and any such amendment has
become effective. A prospectus supplement (the "Prospectus Supplement"),
including a prospectus, relating to the Securities has been so prepared and will
be filed pursuant to Rule 424 under the Act. Copies of such registration
statement and prospectus, any such amendment or supplement, the Prospectus
Supplement and all documents incorporated by reference therein which were filed
with the Commission on or prior to the date hereof have been delivered to you.
Such registration statement and prospectuses, as amended or supplemented to the
date hereof and as supplemented by the Prospectus Supplement, are herein
collectively referred to as the "Registration Statement" and the "Prospectus,"
respectively. Any references herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein which were filed
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with the Commission on or prior to the date of the Terms Agreement, and any
reference to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing of any document with the Commission deemed to be incorporated by
reference therein after the date of the Terms Agreement.
(b) The Registration Statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, the
Registration Statement and the Prospectus, as of the date hereof and at the
Closing Date (as hereinafter defined), and any amendment or supplement thereto,
conformed or will conform in all material respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations; and no such document
included or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; except that the foregoing shall not
apply to (i) statements or omissions from any such document in reliance upon,
and in conformity with, written information furnished to the Company by or on
behalf of any Underwriter through you, specifically for use in the preparation
thereof or (ii) that part of the Registration Statement which shall constitute
Statements of Eligibility (Forms T-1) under the Trust Indenture Act of each of
the Institutional Trustee, the Guarantee Trustee and the Indenture Trustee.
(c) The documents incorporated by reference in the Registration Statement
or Prospectus, when they became effective or were filed with the Commission, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), conformed and any documents so filed and incorporated by
reference after the date hereof will, when they are filed with the Commission,
conform, in all material respects to the requirements of the Act and the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Trust agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Trust, at a purchase price of $25 per Preferred
Security, plus accrued distributions, if any, from January 28, 1998, the number
of Preferred Securities set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Preferred Securities increased as set forth
in Section 8 hereof).
The Company agrees that, in view of the fact that the proceeds of the sale
of the Preferred Securities will be invested in the Subordinated Debentures, it
shall pay to the Underwriters as compensation ("Underwriters' Compensation") for
their arranging the investment of the proceeds therein, on the Closing Date,
$.7875 per Preferred Security; provided, that such compensation will be $.50 per
Preferred Security for sales to certain institutions.
3. Delivery and Payment. Delivery of and payment for the Preferred
Securities shall be made at 10:00 AM, New York City time, on January 28, 1998,
or at such time on such later date not more than three Business Days after the
foregoing date as the
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Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. Delivery of
the Preferred Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
4. Agreements of the Offerors. The Offerors jointly and severally agree
with the several Underwriters as follows:
(a) The Offerors will cause the Prospectus Supplement to be filed pursuant
to Rule 424 under the Act and will notify you promptly of such filing. During
the period in which a prospectus relating to the Securities is required to be
delivered under the Act, the Offerors will notify you promptly of the time when
any amendment to the Registration Statement has become effective or any
subsequent supplement to the Prospectus has been filed and of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for additional information; the Offerors will prepare and file
with the Commission, promptly upon your request, any amendments or supplements
to the Registration Statement or Prospectus, which, in your opinion, may be
necessary or advisable in connection with the distribution of the Securities by
the Underwriters; the Offerors will file no amendment or supplement to the
Registration Statement or the Prospectus (other than any prospectus supplement
relating to the offering of securities other than the Securities registered
under the Registration Statement or any document required to be filed under the
Exchange Act which upon filing is deemed to be incorporated by reference
therein) to which you shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the filing; and the
Offerors will furnish to you at or prior to the filing thereof a copy of any
such prospectus supplement or any document which upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus.
(b) The Offerors will advise you, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, of the suspension of
the qualification of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such purpose; and it
will promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such a stop order should be issued.
(c) Within the time during which a prospectus relating to the Securities
is required to be delivered under the Act, the Offerors will comply with all
requirements imposed upon the Offerors by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the Securities as
contemplated by the provisions hereof and the Prospectus. If during such period
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a
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material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend or supplement the Registration
Statement or the Prospectus to comply with the Act, the Offerors will promptly
notify you and you will amend or supplement the Registration Statement or the
Prospectus (at the expense of the Offerors) so as to correct such statement or
omission or effect such compliance.
(d) The Offerors will use their best efforts to qualify the Securities for
sale under the securities laws of such jurisdictions as you reasonably
designate, to maintain such qualifications in effect so long as required for the
distribution of the Securities and, if requested by the Underwriters, to arrange
for the determination of the legality of the Securities for purchase by
institutional investors, except that neither the Company nor the Trust shall be
required in connection therewith to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction where it is not now
so subject.
(e) The Offerors will furnish to the Underwriters copies of the
Registration Statement and the Prospectus (including all documents incorporated
by reference therein), and all amendments and supplements to the Registration
Statement or the Prospectus which are filed with the Commission during the
period in which a prospectus relating to the Securities is required to be
delivered under the Act (including all documents filed with the Commission
during such period which are deemed to be incorporated by reference therein), in
each case in such quantities as you may from time to time reasonably request.
(f) The Offerors will make generally available to its security holders and
to you as soon as practicable, but in any event not later than 15 months after
the end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the date upon
which the Prospectus Supplement is filed pursuant to Rule 424 under the Act,
which shall satisfy the provisions of Section 11(a) of the Act.
(g) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses incident
to the performance of the Offerors' obligations hereunder, including, without
limiting the generality of the foregoing, all costs, taxes and expenses incident
to the issue and delivery of the Securities, all fees and expenses of the
Offerors' counsel and accountants, and all costs and expenses incident to the
preparing, printing, filing and distributing of all documents relating to the
offering, and will reimburse the Underwriters for any expenses (including fees
and disbursements of counsel) incurred by them in connection with the matters
referred to in Section 4(d) hereof and the preparation of memoranda relating
thereto, for any filing fee of the National Association of Securities Dealers,
Inc. relating to the Securities, and for any fees charged by investment rating
agencies for rating the Securities. If the sale of Securities provided for in
this Agreement is not consummated by reason of any failure, refusal or inability
on the part of the Offerors to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Offerors is not fulfilled, the Company
will reimburse the Underwriters for all reasonable out-of-pocket
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disbursements (including fees and disbursements of counsel) incurred by the
Underwriters in connection with the proposed purchase and sale of the
Securities.
(h) Each of the Trust and the Company agree, during the period beginning
on the date of this Agreement and continuing to and including the date that is
60 days after the Closing Date, not to offer, sell, contract to offer, sell or
otherwise dispose of any preferred securities or any other securities (including
any backup undertakings for such securities) of the Company or of the Trust, in
each case that are substantially similar to the Preferred Securities, or any
securities convertible into or exchangeable for the Preferred Securities or such
substantially similar securities of either the Trust or the Company, except
preferred securities offered pursuant to the Basic Prospectus, without the prior
written consent of Smith Barney Inc.
5. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Securities as provided herein shall be
subject to the accuracy, as of the date of this Agreement and the Closing Date
(as if made at the Closing Date), of the representations and warranties of the
Offerors herein, to the performance by the Offerors of their obligations
hereunder, and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective change,
in or affecting particularly the business or properties of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters, including any Representatives, materially impairs the investment
quality of the Preferred Securities; (ii) any downgrading in the rating of the
Preferred Securities or the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by Federal or New York authorities; or (v)
any outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, including any Representatives, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Securities.
(c) You shall have received an opinion, dated the Closing Date, of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Offerors,
substantially in the form attached hereto as Exhibit A.
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(d) You shall have received an opinion, dated the Closing Date, of Robert
H. Mundheim, Secretary and General Counsel of the Company, substantially in the
form attached hereto as Exhibit B.
(e) You shall have received an opinion, dated the Closing Date, of
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to the Company and
the Trust, substantially in the form attached hereto as Exhibit C.
(f) You shall have received an opinion, dated the Closing Date, of Seward
& Kissel, counsel to Chase, substantially in the form attached hereto as Exhibit
D.
(g) You shall have received from Cleary, Gottlieb, Steen & Hamilton,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus and other related matters as you may reasonably
require, and the Trust and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(h) The Company and the Trust shall each have furnished to you a
certificate, dated the Closing Date, and, in the case of the Company, signed by
either Co-Chairman of the Board, any Vice Chairman, the Treasurer, any Deputy
Treasurer or any Vice President and by the principal financial or accounting
officer of the Company, and, in the case of the Trust, signed by one of the
Regular Trustees, to the effect that each signatory of such certificate has
carefully examined the Registration Statement, as amended as of the date of such
certificate, the Prospectus, as amended and supplemented as of the date of such
certificate, and this Agreement and that:
(i) the representations and warranties of the Company or the Trust,
as the case may be, in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the Closing Date, and
the Company and the Trust, as the case may be, has complied in all
material respects with all the agreements and satisfied all the conditions
on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of either
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or, to their knowledge, threatened;
(iii) the Registration Statement, including any supplements or
amendments thereto, do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the Prospectus,
including any supplements or amendments thereto, does not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and since the effective date of the Registration Statement
there has not occurred any event concerning which information is required
to be
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contained in an amended or supplemented Prospectus concerning which such
information is not contained therein; and
(iv) there have been no material adverse changes in the general
affairs of the Company and its subsidiaries taken as a whole or the Trust
or in their financial position as shown by information contained in the
Registration Statement and the Prospectus, other than changes disclosed in
or contemplated by the Registration Statement and the Prospectus.
(i) Coopers & Lybrand L.L.P. (and to the extent necessary, as determined
by the Company, Arthur Anderson LLP) or another nationally recognized
independent accounting firm, shall have furnished to you a letter or letters,
dated the Closing Date, substantially in the form heretofore approved by you.
(j) The Preferred Securities shall have been registered under the Exchange
Act and shall have been listed or approved for listing, upon notice of issuance,
on the New York Stock Exchange.
(k) Prior to the Closing Date, the Company shall have furnished to you
such further information, certificates and documents as you may reasonably
request.
6. Indemnification and Contribution. (a) Each of the Trust and the Company
will jointly and severally indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in such registration statement when it became effective,
or in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus supplement, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim damage, liability or action; provided, however, that the
Offerors shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Offerors by or on behalf of any Underwriter through you, specifically for use in
the preparation thereof.
(b) Each Underwriter will indemnify and hold harmless the Trust and the
Company against any losses, claims, damages or liabilities to which the Trust or
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any part of such registration statement when it
became effective, or in the Registration Statement, the Prospectus or any
amendment or supplement thereto, or any related preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
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to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made therein in reliance upon and in conformity
with written information furnished to the Offerors by or on behalf of any
Underwriter, through you, specifically for use in the preparation thereof, and
will reimburse the Trust and the Company for any legal or other expenses
reasonably incurred by the Trust and the Company in connection with
investigating or defending against any such loss, claim, damage, liability or
action.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent that it shall wish, jointly with any other indemnifying
party, similarly notified to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnified party), and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Offerors on
the one hand and the Underwriters on the other from the offering of the
Preferred Securities, or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Offerors on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Offerors on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering of the Preferred Securities (before
deducting expenses) received by the Trust bear to the total commissions received
by the Underwriters, in each case as set forth in the Prospectus Supplement. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Offerors or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Offerors and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose)
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or by any other method of allocation which does not take account of the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim (which shall be limited as provided in subsection (c) above if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Preferred Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute shall be several in proportion to their respective
underwriting obligations and not joint. Promptly after receipt by an indemnified
party under this subsection (d) of the notice of the commencement of any action
against such party in respect of which a claim for contribution may be made
against an indemnifying party under this subsection (d), such indemnified party
shall notify the indemnifying party in writing of the commencement thereof if
the notice specified in subsection (c) above has not been given with respect to
such action; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under this subsection (d).
(e) The obligations of the Offerors under this Section 6 shall be in
addition to any liability which the Offerors may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act or the Exchange Act; and the
obligations of the Underwriters under this Section 6 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company (including
any person who, with his consent, is named in the Registration Statement as
about to become a director of the Company), to each officer of the Company and
SSBH Trustee who has signed the Registration Statement, and to each person, if
any, who controls the Company within the meaning of the Act or the Exchange Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company or the Trust herein or
in certificates delivered pursuant hereto, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, or the Trust or the SSBH Trustees and
shall survive delivery of and payment for the Securities.
8. Substitution of Underwriters. (a) If any Underwriter or Underwriters
shall fail to take up and pay for the principal amount of Preferred Securities
agreed by such Underwriter or Underwriters to be purchased hereunder, upon
tender of such Preferred
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<PAGE> 11
Securities in accordance with the terms hereof, and the principal amount of
Preferred Securities not purchased does not aggregate more than 10% of the total
principal amount of the Preferred Securities, the remaining Underwriters shall
be obligated to take up and pay for (in proportion to the respective
underwriting obligations hereunder as set forth herein except as may otherwise
be determined by you) the Preferred Securities which the withdrawing or
defaulting Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for
the principal amount of Preferred Securities agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Preferred Securities
in accordance with the terms hereof, and the principal amount of Preferred
Securities not purchased aggregates more than 10% of the total principal amount
of Preferred Securities, and arrangements satisfactory to you and the Offerors
for the purchase of such Preferred Securities by other persons are not made
within 36 hours thereafter, this Agreement shall terminate. In the event of a
default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not to exceed seven full business days, as
you shall determine in order that the required changes in the Registration
Statement and the Prospectus or in any other documents or arrangements may be
effected. In the event of any such termination, the Offerors shall not be under
any liability to any Underwriter (except to the extent provided in Section 4(g)
and Section 6 hereof) nor shall any Underwriter (other than an Underwriter who
shall have failed, otherwise than for some reason permitted under this
Agreement, to purchase the principal amount of Preferred Securities agreed by
such Underwriter to be purchased under this Agreement) be under any liability to
the Offerors (except to the extent provided in Section 6 hereof). Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Offerors and any non-defaulting Underwriter for
damages occasioned by its default hereunder.
9. Termination of Agreement. You shall have the right to terminate this
Agreement by giving notice as hereinafter specified at any time at or prior to
the Closing Date if (i) the Company or the Trust shall have failed, refused or
been unable, at or prior to the Closing Date, to perform, in any material
respect, any agreement on its part to be performed hereunder, or (ii) any other
condition of the Underwriters' obligations is not fulfilled in all material
respects. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(g) and Section 6 shall at
all times be effective. If you elect to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by you by telephone,
telecopy or telegram, confirmed by letter.
10. Notices. Except as otherwise provided herein, notice given pursuant to
any provision of this Agreement shall be in writing and shall be delivered (i)
if to the Offerors, to the Company, or to the Trust care of the Company, at the
office of the Company at 388 Greenwich Street, New York, New York 10013,
Attention: Treasurer; or (ii) if to you, as Representatives of the several
Underwriters, care of Smith Barney Inc., 388 Greenwich Street, New York, New
York 10013, Attention: Manager, Investment Banking Division.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Company, the Trust and the Underwriters and their respective successors
and the
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controlling persons, officers and directors referred to in Section 6 hereof, and
no other person shall have any right or obligation hereunder.
In all dealings with the Company and the Trust under this Agreement, you shall
act on behalf of each of the several Underwriters, and any action under this
Agreement taken by you or by any one of you designated in the Terms Agreement
will be binding upon all the Underwriters.
12. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13. Counterparts. The Terms Agreement may be executed by one or more of
you, the Company and the Trust in one or more counterparts, each of which shall
constitute an original and all of which taken together shall constitute one and
the same Agreement.
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<PAGE> 13
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Company and the several Underwriters.
Very truly yours,
SSBH CAPITAL I
By /s/ Charles W. Scharf
---------------------------------
as Regular Trustee
By /s/ Michael J. Day
---------------------------------
as Regular Trustee
SALOMON SMITH BARNEY HOLDINGS INC.
By /s/ Charles W. Scharf
---------------------------------
Name: Charles W. Scharf
Title: Chief Financial Officer
Confirmed as of the date first above mentioned on behalf of themselves and the
other several Underwriters named in Schedule I hereto.
SMITH BARNEY INC.
As Representatives of the Several Underwriters
By SMITH BARNEY INC.
By /s/ Jane E. Wiest
---------------------------------
Vice President
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<PAGE> 14
SCHEDULE I
SSBH CAPITAL I
7.200% Trust Preferred Securities (TRUPS(R))
<TABLE>
<CAPTION>
Number of Firm
Preferred
Underwriters Securities
- ------------ ----------
<S> <C>
Smith Barney Inc...................................... 2,077,500
A.G. Edwards & Sons, Inc.............................. 2,076,250
Goldman, Sachs & Co................................... 2,076,250
Merrill Lynch, Pierce, Fenner &
Smith Incorporated................................. 2,076,250
Morgan Stanley & Co. Incorporated..................... 2,076,250
PaineWebber Incorporated.............................. 2,076,250
Prudential Securities Incorporated.................... 2,076,250
ABN AMRO Chicago Corporation.......................... 95,000
Bear, Stearns & Co. Inc............................... 95,000
BT Alex. Brown Incorporated........................... 95,000
CIBC Oppenheimer Corp................................. 95,000
Dain Rauscher Incorporated............................ 95,000
Donaldson, Lufkin & Jenrette
Securities Corporation............................. 95,000
EVEREN Securities, Inc................................ 95,000
JC Bradford & Co...................................... 95,000
Piper Jaffray Inc..................................... 95,000
Raymond James & Associates, Inc. ..................... 95,000
The Robinson-Humphrey Company, LLC.................... 95,000
Advest, Inc........................................... 21,000
Cowen & Company....................................... 21,000
Craigie Incorporated.................................. 21,000
Fahenstock & Co. Inc.................................. 21,000
Fidelity Capital Markets, a Division of National
Financial Services Corporation..................... 21,000
Gibraltar Securities Co. ............................. 21,000
Gruntal & Co., L.L.C. ................................ 21,000
Janney Montgomery Scott, Inc.......................... 21,000
Legg Mason Wood Walker, Incorporated.................. 21,000
McDonald & Company Securities, Inc.................... 21,000
McGinn, Smith & Co., Inc.............................. 21,000
Mesirow Financial, Inc................................ 21,000
Morgan Keegan & Company, Inc.......................... 21,000
Olde Discount Corporation............................. 21,000
Pryor, McClendon, Counts & Co., Inc................... 21,000
Roney & Co., L.L.C.................................... 21,000
Tucker Anthony Incorporated........................... 21,000
</TABLE>
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<PAGE> 15
<TABLE>
<CAPTION>
Number of Firm
Preferred
Underwriters Securities
- ------------ ----------
<S> <C>
U.S. Clearing Corp.................................... 21,000
Utendahl Capital Partners, L.P........................ 21,000
Wheat, First Securities, Inc.......................... 21,000
==========
TOTAL................................................. 16,000,000
</TABLE>
15
