Pricing Supplement No. 781 Dated 8/08/94 Rule 424(b)(3)
(To Prospectus dated December 14, 1993 and File No. 33-51269,
Prospectus Supplement dated December 14, 1993) 33-57922 and 33-49136
SALOMON INC
Medium-Term Notes, Series D
(Registered Notes -- Floating Rate or Indexed Rate)
Due More Than Nine Months from Date of Issue
Principal Amount or Face Amount: $30,000,000.00
Issue Price: 100.0000000%
Proceeds to Company on original issuance: $30,000,000.00
Commission or Discount on original issuance: $.00
Salomon Brothers Inc's capacity on original issuance: |X| As agent
| | As principal
If as principal:
| | The Registered Notes are being offered at varying prices related
to prevailing market prices at the time of resale.
| | The Registered Notes are being offered at a fixed initial public
offering price of % of Principal Amount or Face Amount.
Original Issue Date: 8/9/94
Stated Maturity: 8/9/99, as adjusted as provided in attached
Specified Currency:
(If other than U.S. Dollars)
Authorized Denominations: $2,000,000.
(If other than as set forth in the Prospectus Supplement)
Interest Payment Dates: Each February 9 and August 9, and at stated maturity.
(If other than as set forth in the Prospectus Supplement)
Indexed Principal Note: |x| Yes (see attached) | | No
Floating Rate: || Indexed Rate: |x| (see attached)
Initial Interest Rate: See Attached
Base Rate: | | CD Rate | | Commercial Paper Rate | | Federal Funds Rate
| | LIBOR Telerate | | LIBOR Reuters | | Treasury Rate
| | Treasury Rate Constant Maturity | | Other (see attached)
Interest Reset Period or Interest Reset Dates: See Attached
Index Maturity: N/A
Spread (+/-): N/A
Spread Multiplier: N/A
Spread Reset: | | The Spread or Spread Multiplier may not be changed prior to
Stated Maturity.
| | The Spread or Spread Multiplier may be changed prior to
Stated Maturity (see attached).
Optional Reset Dates (if applicable): N/A
Maximum Interest Rate: N/A
Minimum Interest Rate: See Attached
Amortizing Note: | | Yes |X| No
Amortization Schedule:
Optional Redemption: | | Yes |X| No
Optional Redemption Dates:
Redemption Prices:
Optional Repayment: | | Yes |X| No
Optional Repayment Dates:
Optional Repayment Prices:
Optional Extension of Stated Maturity: | | Yes |X| No
Final Maturity:
Discount Note: | | Yes |X| No
Total Amount of OID:
Yield to Maturity:
Pricing Supplement dated August 9, 1994
(to Prospectus Supplement dated December 14, 1993,
to Prospectus dated December 14, 1993)
This Pricing Supplement relates only to the Notes offered hereby
and does not relate to any Constituent Security (as defined
below). Copies of files, reports, proxy statements and other
information, if any, filed with the Commission pursuant to the
Exchange Act by any Constituent Issuer (as defined below) may be
inspected and copied at certain offices of the Commission at the
addresses listed under "Available Information" in the Prospectus.
Neither the Company nor the Agent has participated in the
preparation of any such documents, or made any due diligence
inquiry with respect to any information provided therein. There
can be no assurance that all events occurring prior to the date
hereof (including events that would affect the accuracy or
completeness of any publicly available documents described in
this paragraph) that would affect the trading price of a
Constituent Security have been publicly disclosed. Because the
principal amount of the Notes payable at maturity is related to
the trading price of each Constituent Security, such events, if
any, would also affect the value of the Notes.
DESCRIPTION OF THE NOTES
General
The description in this Pricing Supplement of the particular
terms of the Indexed Principal Notes offered hereby (the "Notes")
supplements, and to the extent inconsistent therewith replaces,
the descriptions of the general terms and provisions of the
Registered Notes set forth in the accompanying Prospectus and
Prospectus Supplement, to which description reference is hereby
made.
"Business Day" means any day that is not a Saturday, a
Sunday or a day on which the New York Stock Exchange (the
"NYSE"), banking institutions or trust companies in The City of
New York are authorized or obligated by law or executive order to
close.
"Closing Price" of any security on any date of determination
means the closing sale price or last reported sale price of such
security on the NYSE on such date or, if such security is not
listed for trading on the NYSE on any such date, on such other
national securities exchange or association that is the primary
market for the trading of such security.
"Trading Day" means a Business Day on which a subject
security (A) is not suspended from trading on any national
securities exchange or association at the close of business and
(B) has traded at least once on the national securities exchange
or association that is the primary market for the trading of such
security.
Interest
The interest rate on a Note in effect on any day shall be
the rate set out on Schedule I to such Note (a copy of Schedule I
to the Notes as it will appear on the date of issuance of the
Notes is attached hereto as Appendix A), as such rate may be
changed from time by agreement between the Company and the Holder
of such Note, as described under "Substitution of Constituent
Securities" below. Interest shall be payable semi-annually in
arrears on each February 9 and August 9, beginning February 9,
1995, and at Stated Maturity (each an "Interest Payment Date").
Interest shall be computed on the basis of a 360-day year of
twelve 30-day months. Each payment of interest in respect of an
Interest Payment Date shall include interest accrued through the
day before such Interest Payment Date. If an Interest Payment
Date falls on a day that is not a Business Day, the interest
payment to be made on such Interest Payment Date shall be made on
the next succeeding Business Day with the same force and effect
as if made on such Interest Payment Date and no additional
interest will accrue as a result of such delayed payment.
Indexed Principal Amount
The Notes are Indexed Principal Notes. The principal amount
payable at Stated Maturity with respect to a Note will be equal
to the greater of (i) the Face Amount and (ii) the Indexed
Amount. The Indexed Amount shall equal (i) the Face Amount plus
(ii) the product of (A) the Face Amount multiplied by (B) the
result derived from subtracting 132.2 from the Index Value. If
the Index Value is less than 132.2, the Face Amount will be
greater than the Indexed Amount and the Holder of the Note will
receive the Face Amount at Stated Maturity. The Index Value
shall equal the quotient of (i) the value of the Constituent
Securities Index divided by (ii) $300,000. The value of the
Constituent Securities Index shall equal the sum of the products
derived by multiplying (i) the arithmetic average of the Closing
Price of each Constituent Security, for the 10 Trading Days
immediately prior to August 2, 1999 (subject to adjustment as
described under "Stated Maturity" below), by (ii) the number of
shares of each such Constituent Security in the Constituent
Securities Index on the relevant Trading Day.<PAGE>
Constituent Securities Index
The shares of common stock (each, a "Constituent Security")
that are set out on Schedule I to a Note (a copy of Schedule I to
the Notes as it will appear on the date of issuance of the Notes
is attached hereto as Appendix A) shall constitute the
"Constituent Securities Index" with respect to such Note, subject
to substitution as described under "Substitution of Constituent
Securities" below.
Substitution of Constituent Securities
The Company shall from time to time on any Business Day,
provided that the Holder consents to the Interest Rate adjustment
or other adjustment described below, at the request of the Holder
made to the Company and the Calculation Agent, substitute with
respect to such Holder's Note, in whole and not in part, the shares
of any Constituent Security with shares of common stock of any
issuer that is not at the time of such substitution an issuer of a
Constituent Security, and at the effective date of such
substitution and thereafter (subject to further substitution as
provided in this paragraph) such common stock will be a Constituent
Security and such shares of common stock will be a component of the
Constituent Securities Index with respect to such Note; provided,
however, that (i) the aggregate value of the shares to be
substituted shall, on the Business Day immediately prior to the
effective date of such substitution, be equal to the aggregate
value of the shares of the Constituent Security that is being
replaced, (ii) with respect to such Note, the Company will not be
required to (A) make any such substitutions on more than one
Business Day in any quarterly calendar period, (B) replace more
than two Constituent Securities in any quarterly calendar period,
or (C) make any such substitutions during the period commencing 5
Business Days prior to an Interest Payment Date and ending on such
Interest Payment Date, (iii) the Interest Rate, when adjusted as
described in the following sentence, payable on such Note shall be
greater than zero and (iv) the new Constituent Security is traded
on a national securities exchange or by a national securities
association. Unless otherwise agreed as described below, in the
event that the Company makes any such substitution, the Interest
Rate on the Note will be reduced such that the discounted present
value of that portion of the interest payments attributable to such
reduction is an amount equal to the increased risk-adjusted hedging
costs incurred by the Company in connection with such substitution,
which discounted present value and amount of increased risk-
adjusted hedging costs shall be determined by the Company (or the
Calculation Agent on behalf of the Company) in its sole and
absolute discretion. Such risk-adjusted hedging costs ("Adjustment
Costs") shall include, but not be limited to, (i) any transactions
costs involved in modifying the securities position used to hedge
the Company's obligations in respect of the Constituent Securities
to reflect such substitution (including, but not limited to, costs
incurred as a result of the difference in the prices of the
securities purchased and sold in modifying the Company's securities
position), (ii) any change in hedging costs related to the
different volatility of the Constituent Securities resulting from
such substitution and (iii) any change in carrying costs related to
the expected dividend yields of the Constituent Securities
resulting from such substitution. In lieu of reducing the Interest
Rate as discussed above, the Company and the Holder of a Note may
agree to reflect Adjustment Costs by modifying any other terms of
such Note other than Face Amount or Stated Maturity.
Any substitution of a Constituent Security and concomitant
revision of the Interest Rate or other agreed upon adjustment with
respect to a Note shall be evidenced in the following manner. The
Holder shall surrender Schedule I to such Note which shall set
forth the then existing Constituent Securities Index and interest
rate with respect to such Note at the office of the Company
maintained to effect transfers and exchanges of its debt
securities. The Company (after consultation with the Calculation
Agent) shall execute, and the Trustee shall deliver, to the
registered Holder, a new Schedule I to such Note reflecting the
revised Constituent Securities Index and reduced Interest Rate or
other appropriate adjustment.
Dilution Adjustments
The number of shares of any of the Constituent Securities
included in the Constituent Securities Index and the Closing Price
of any of the Constituent Securities on any 10 Trading Days (the
"10 Trading Days") used for the purpose of calculating the
principal amount of a Note payable at Stated Maturity shall be
subject to adjustment as described below to the extent that any of
the events requiring such adjustment (an "Adjustment Event") occur
during the period commencing on the Issue Date and ending at Stated
Maturity (the "Adjustment Period"). If an Adjustment Event occurs
during the Adjustment Period, the Company (or the Calculation Agent
on behalf of the Company) shall notify Holders, in writing, that
such Adjustment Event has occurred, not more than 20 days after the
Company learns that such Adjustment Event has occurred.
(i) Common Stock Dividends and Other Distributions. In
the event that a dividend or other distribution is declared on
any class of capital stock of any issuer of a Constituent
Security (a "Constituent Issuer") (or on any class of capital
stock of a Constituent Survivor, as defined in (iv) below)
payable in shares of such Constituent Security (or shares of
common stock of such Constituent Survivor), the number of
shares of such Constituent Security (or the common stock of
such Constituent Survivor) used to calculate the principal
amount of a Note payable at Stated Maturity on any Trading Day
that follows the date fixed for the determination of the
shareholders entitled to receive such distribution (the
"Record Date") shall be increased by the number of shares of
such Constituent Security constituting the dividend or
distribution with respect to the number of shares of such
Constituent Security included in the Constituent Securities
Index as of the close of trading on such record date.
(ii) Extraordinary Dividends. In the event that an
extraordinary cash dividend or other cash distribution is
declared by a Constituent Issuer on any Constituent Security
in an aggregate amount that exceeds 5% of the market value of
such Constituent Security, calculated as of the close of
trading on the date such dividend is declared, the number of
shares of such Constituent Security included in the
Constituent Securities Index shall be increased as of the
close of trading on the first Trading Day on which such
Constituent Security trades ex-dividend for regular way
settlement, according to the following formula:
"AS" means the number of additional shares of such
Constituent Security to be added to the Constituent Securities
Index as of the close of trading on the first Trading Day on
which such Constituent Security trades ex-dividend for regular
way settlement.
"D" means the amount of the cash dividend or other cash
distribution paid with respect to a single share of such
Constituent Security.
"S" means the number of shares of such Constituent
Security that are in the Constituent Securities Index on the
record date for the dividend or distribution.
"CP" means the Closing Price of the Constituent Security
on the first Trading Day on which such Constituent Security
trades ex-dividend for regular way settlement.
(iii) Subdivisions and Combinations of Common Stock.
In the event that the outstanding shares of any Constituent
Security (or the shares of common stock of any Constituent
Survivor) are subdivided into a greater number of shares, the
number of shares of such Constituent Security (or the common
stock of any Constituent Survivor) used to calculate the
principal amount of a Note payable at Stated Maturity on any
Trading Day that follows the date on which such subdivision
becomes effective shall be proportionately increased, and,
conversely, in the event that the outstanding shares of any
Constituent Security (or the shares of common stock of any
Constituent Survivor) are combined into a smaller number of
shares, the number of shares of such Constituent Security
shall be proportionately reduced.
(iv) Distribution of Rights and Other Transferable
Securities. In the event that a Constituent Issuer issues to
holders of a Constituent Security (A) transferable rights or
warrants ("Rights") to purchase additional shares of such
Constituent Security or (B) any other transferable equity
securities (collectively, upon distribution by the Constituent
Issuer, "Other Transferable Securities"), the number of shares
of such Constituent Security included in the Constituent
Securities Index shall be increased, as of the close of
trading on the second Trading Day on which such Rights or
Other Transferable Securities are freely transferable,
according to the following formula:
"AS" means the number of additional shares of such
Constituent Security to be added to the Constituent Securities
Index as of the close of trading on the second Trading Day on
which the Rights or Other Transferable Securities are freely
transferable.
"RP1" means the Closing Price of the Rights or Other
Transferable Securities on the first Trading Day the Rights or
Other Transferable Securities are freely transferable.
"RP2" means the Closing Price of the Rights or Other
Transferable Securities on the second Trading Day the Rights
or Other Transferable Securities are freely transferable.
"R" means one-half the number of Rights or Other
Transferable Securities that would have been distributed by
the Constituent Issuer to a holder of the Constituent Security
who held, as of the record date for the distribution of the
Rights or Other Transferable Securities by the Constituent
Issuer, the number of shares of the Constituent Security
included in the Constituent Securities Index as of such record
date.
"CP1" means the Closing Price of the Constituent Security
on the first Trading Day the Rights or Other Transferable
Securities are freely transferable.
"CP2" means the Closing Price of the Constituent Security
on the second Trading Day the Rights or Other Transferable
Securities are freely transferable.
(v) Reclassification of Common Stock. In the event
that the outstanding shares of any Constituent Security (or
the shares of common stock of any Constituent Survivor) are
changed into the same or a different number of shares of any
class or classes of stock, whether by capital reorganization,
reclassification or otherwise (except to the extent otherwise
provided in (i) or (ii) above or pursuant to a consolidation,
merger, sale, transfer, lease or conveyance, liquidation,
dissolution or winding up, as described in (vi) below), the
Closing Price of such Constituent Security (or common stock of
any Constituent Survivor) used to calculate the principal
amount of a Note payable at Stated Maturity shall be the
Closing Price or Prices of the share or shares of stock into
which a share of such Constituent Security was changed on any
Trading Day that follows the effectiveness of such change.
(vi) Dissolutions, Mergers, Consolidations or Sales of
Assets. In the event of any (A) consolidation or merger of
any Constituent Issuer, or any surviving entity or subsequent
surviving entity of such Constituent Issuer (a "Constituent
Survivor"), with or into another entity (other than a
consolidation or merger in which such Constituent Issuer is
the surviving entity), (B) sale, transfer, lease or conveyance
of all or substantially all of the assets of any Constituent
Issuer or any Constituent Survivor or (C) liquidation,
dissolution or winding up of such Constituent Issuer or
Constituent Survivor (any such event, a "Reorganization
Event"), for purposes of determining the principal amount of a
Note payable at maturity, the Closing Price of the Constituent
Security issued by such Constituent Issuer on any Trading Day
subsequent to the effective time of any Reorganization Event
the value of the cash and other property received by a holder
of a share of such Constituent Security (or, in the event that
such Constituent Survivor is itself involved in a subsequent
Reorganization Event, by the holder of the securities of such
Constituent Survivor that were initially received in a prior
Reorganization Event by the holder of a share of such
Constituent Security) was thereafter equal to the value of a
share of such Constituent Security. For purposes of
determining the value of such cash and other property, the
value of (A) any cash and other property (other than
securities) received in any such Reorganization Event will be
an amount equal to the value of such cash and other property
at the effective time of such Reorganization Event and (B) any
securities received in any such Reorganization Event will be
an amount equal to the Closing Prices of such securities.
(vii) Distribution of Property. In the event that a
Constituent Issuer issues to holders of a Constituent Security
tangible property (other than cash, cash equivalents or
securities of any type), the Company shall determine in good
faith (A) the first Trading Day on which a holder of the
Constituent Security can exchange the property distributed for
cash (the "Realization Date") and (B) the amount of cash (the
"Cash Equivalent Amount") that can be realized on the
Realization Date by selling the property received by a holder
of the Constituent Security who held, as of the record date
for the distribution of such property by the Constituent
Issuer, the number of shares of the Constituent Security
included in the Constituent Securities Index as of such record
date. Following the close of trading of the Constituent
Security on the Realization Date, the number of shares of the
Constituent Security included in the Constituent Securities
Index shall be increased by an amount equal to the quotient of
the Cash Equivalent Amount divided by the Closing Price of the
Constituent Security on the Realization Date.
Any Dilution Adjustment shall be evidenced in the following
manner. Upon receiving notification of an Adjustment Event from
the Company or the Calculation Agent, each Holder shall surrender
Schedule I to such Holder's Note which shall set forth the then
existing Constituent Securities Index with respect to such Note at
the office of the Company maintained to effect transfers and
exchanges of its debt securities. The Company (after consultation
with the Calculation Agent) shall execute, and the Trustee shall
deliver, to each registered Holder, a new Schedule I to such
Holder's Note reflecting the revised Constituent Securities Index
with respect to such Note as a result of the Dilution Adjustment.
Stated Maturity
In the event that any of the 10 Business Days immediately
prior to August 2, 1999 is not a Trading Day (a "Non-Trading Day")
with respect to one or more Constituent Securities, Stated Maturity
shall be extended one Trading Day for each such Non-Trading Day;
provided, further, that Stated Maturity shall be no later than
September 2, 1999. In the event that Stated Maturity is delayed as
aforesaid, the average Closing Price of each Constituent Security
that was traded on the 10 Business Days prior to August 2, 1999
will be fixed at the price determined as of August 2, 1999. In the
case of any other Constituent Security, its average Closing Price
shall be determined on the basis of the Closing Price on each of
the 10 Business Days prior to August 2, 1999 that are Trading Days
with respect to such Constituent Security and the first Trading
Days following August 2, 1999, such that the average Closing Price
is determined on the basis of 10 Trading Days; provided, however,
if with respect to any Constituent Security, there are fewer than
10 Trading Days during the period beginning 10 Business Days before
August 2, 1999 and ending the day prior to September 2, 1999, its
average Closing Price shall be determined on the basis of such
fewer number of Trading Days; provided, further, if with respect to
any Constituent Security, there are no Trading Days during the
period beginning 10 Business Days before August 2, 1999 and ending
the day prior to September 2, 1999, its average Closing Price shall
be determined on the basis of the last 10 Trading Days with respect
to such Constituent Security.
Each Note will continue to accrue interest until the principal
amount is paid at Stated Maturity, which, in the event that Stated
Maturity is extended as a result of a Non-Trading Day, will be
payable to the Holder of such Note at Stated Maturity.
Certificated Notes and Transfer Restriction
The Notes will not be represented by a Global Security but the
Company will issue individual Debt Securities representing each
Note. Individual Debt Securities so issued will be issued as
Registered Securities in denominations of $2,000,000 or any greater
amount. The Note may be transferred only in minimum denominations
of $2,000,000 to a person that is a "qualified institutional buyer"
as defined in Rule 144A under the Securities Act of 1933.
Events of Default and Acceleration
If an Event of Default shall have occurred and be continuing,
the amount payable to the Registered Holder of a Note upon any
acceleration permitted by the Indenture will be equal to: (i) the
greater of (a) the Face Amount and (b) the Indexed Amount,
calculated as if the date of acceleration were Stated Maturity plus
(ii) all accrued and unpaid interest.
Calculation Agent
The Calculation Agent for the Notes will be Salomon Brothers
Inc, a wholly-owned subsidiary of the Company. The Calculation
Agent will make all calculations and adjustments on behalf of the
Company with respect to the Notes and will notify the Company,
relevant Holders and the Trustee of any such adjustments and
calculations.
<PAGE>
TAXATION
The following summary supplements, and to the extent inconsistent
therewith replaces, the discussion of United States taxation set
forth in the accompanying Prospectus Supplement under the heading
"United States Tax Considerations," to which discussion reference
is hereby made.
Because of the unique characteristics of the Equity-Indexed
Medium Term Notes, including the contingent nature of the principal
amount payable at maturity and the possibility of making additions
and deletions to the Constituent Securities, the U.S. Federal
income tax consequences of purchasing and holding an Equity-Indexed
Medium Term Note are uncertain. Accordingly, an investor should
consult its tax advisors in determining the U.S. Federal income tax
consequences to it of purchasing and holding an Equity-Indexed
Medium Term Note.<PAGE>
APPENDIX A
SCHEDULE I
For Attachment to Note _______
Interest Rate
The interest rate in effect on this Note, on a per annum
basis, is 2%.
Constituent Securities Index
Ticker Stock Shares Weight
CC Circuit City Stores 68,571 5.00%
CPC CPC International 29,925 5.00
CPQ Compaq Computer 45,802 5.00
FNM Federal Natl. Mtg. Assn17,391 5.00
G Gilette Co. 21,314 5.00
GE General Electric 58,968 10.00
INTC Intel Corp 25,105 5.00
KO Coca Cola Co. 33,708 5.00
MCD McDonalds Corp 110,599 10.00
MRK Merck & Co., Inc. 50,633 5.00
MSFT Microsoft Corp. 27,650 5.00
NB Nationsbank Corp 26,966 5.00
SGI Silicon Graphics Inc. 61,951 5.00
T AT&T Corporation 27,523 5.00
USHC U.S. Healthcare 77,887 10.00
WMT Wal-Mart Stores 118,227 10.00
Other Modifications to Terms
The Interest Rate, the Constituent Securities Index and certain other terms
are subject to revision, substitution and adjustment as a result of certain
events as provided in the Pricing Supplement dated August 9, 1994 with respect
to this Note.
Dated: _________, 199_
Salomon Brothers Inc, as
Calculation Agent
By:______________________
Name:
Title:
