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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Prusuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
April 29, 1996
SALOMON INC
(Exact name of registrant as specified in its charter)
Delaware I-4346 22-1660266
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
Seven World Trade Center, New York, New York 10048
(Address of Principal Executive Offices) (Zip Code)
(212) 783-7000
(Registrant's Telephone No.)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements
NONE
(b) Pro Forma Financial Information
NONE
(c) Exhibits
4. Eighth Supplemental Indenture dated as of May 8, 1996 between
Salomon Inc and Citibank, N.A.
25. Form T-1 Statement of Eligibility and Qualification of
Chemical Bank Under the Trust Indenture Act of 1939.
Page 2
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Salomon Inc
(Registrant)
Date: May 16, 1996 by: /s/ Richard Carbone
Controller
Page 3
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EXHIBIT INDEX
Exhibit 4. - Eighth Supplemental Indenture dated as of May 8, 1996 between
Salomon Inc and Citibank, N.A.
Exhibit 25. - Form T-1 Statement of Eligibility and Qualification of Chemical
Bank Under the Trust Indenture Act of 1939.
Page 4
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Exhibit 4
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SALOMON INC
TO
CITIBANK, N.A.
Trustee
EIGHTH SUPPLEMENTAL INDENTURE
Dated as of May 8, 1996
Supplemental to Indenture dated as of December 1, 1988
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This Eighth Supplemental Indenture (the "Supplemental Indenture") is
made and entered into as of May 8, 1996 between Salomon Inc, a Delaware
corporation (the "Company"), and Citibank, N.A., a national banking association
(the "Trustee"), as Trustee under the Indenture dated as of December 1, 1988, as
amended by the First Supplemental Indenture dated September 7, 1990, the Second
Supplemental Indenture thereto dated June 12, 1991, the Third Supplemental
Indenture thereto dated July 1, 1992, the Fourth Supplemental Indenture thereto
dated October 29, 1992, the Fifth Supplemental Indenture thereto dated December
14, 1993, the Sixth Supplemental Indenture thereto dated December 29, 1994 and
the Seventh Supplemental Indenture thereto dated February 1, 1996 between the
Company and the Trustee (as amended to the date hereof, the "Indenture").
WHEREAS, the parties hereto previously entered into the Indenture to
provide for the issuance and sale by the Company from time to time of its Senior
Debt Securities (the "Debt Securities");
WHEREAS, Sections 1101(2), (5) and (6) of the Indenture provide that
the Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into an indenture supplemental to the
Indenture, in form satisfactory to the Trustee, without the consent of any
holder of Debt Securities, (a) to add to the covenants of the Company, for the
benefit of all or any series of Debt Securities and the Coupons, if any,
pertaining thereto (and, if such covenants are to be for the benefit of less
than all such series, stating that such covenants are expressly being included
solely for the benefit of such series), (b) to change or eliminate any of the
provisions of the Indenture, provided that any such change or elimination shall
become effective only when there is no Outstanding Debt Security or Coupon (as
such terms are defined in the Indenture) of any series created prior to the
execution of such supplemental indenture that is entitled to the benefit of such
provision and as to which such supplemental indenture would apply and (c) to
establish the form or terms of Debt Securities and Coupons, if any, of any
series as permitted by Section 201 and 301 of the Indenture.
WHEREAS the Company has duly authorized the creation of a series of
its Debt Securities denominated its "7 5/8% Exchangeable Notes Due May 15, 1999"
representing up to 9,796,303 of its "Debt Exchangeable for Common Stock (SM)"
(such Debt Securities being referred to herein as the "DECS (SM)"), the
principal amount of which is mandatorily exchangeable at Maturity into shares of
Common Stock, par value $.01 per share (the "FSA Holdings Common Stock"), of
Financial Security Assurance Holdings Ltd., a New York corporation ("FSA
Holdings"), or, at the option of the Company under certain circumstances, cash,
in either case at the Exchange Rate (as defined herein); and
WHEREAS the entry into this Supplemental Indenture by the parties
hereto is in all respects authorized by the provisions of the Indenture; and
WHEREAS the Company has duly authorized the execution and delivery
of this Supplemental Indenture, and all things necessary have been done to make
the DECS,
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when executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Supplemental Indenture a valid agreement of the Company, in accordance with
their and its terms:
NOW, THEREFORE:
For and in consideration of the premises and purchase of the Debt
Securities of any series issued hereunder by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Debt Securities of any such series, as follows:
ARTICLE I
Certain Provisions of General Application
SECTION 1.01. Definitions.
For all purposes of the Indenture and this Supplemental Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
the terms defined in this Article have the meanings assigned to them
in this Article;
the words "herein", "hereof" and "hereunder" and other words of
similar import refer to the Indenture and this Supplemental Indenture as a whole
and not to any particular Article, Section or other subdivision; and
capitalized terms used but not defined herein are used as they are
defined in the Indenture.
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which the NYSE or 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, if no closing price is reported, the last reported
sale price) of such security (regular way) on the NYSE on such date or, if such
security is not listed for trading on the NYSE on any such date, as reported in
the composite transactions for the principal United States securities exchange
on which such security is so listed, or if such security is not so listed on a
United States national or regional securities exchange, as reported by the
Nasdaq National Market of the National Association of Securities Dealers, Inc.
Automated Quotation System, or, if such security is not so reported, the last
quoted bid price for such security in the over-the-counter market as reported by
the National Quotation Bureau or similar organization.
"DECS" has the meaning set forth in the recitals to this
Supplemental Indenture.
"Dilution Event" has the meaning set forth in Section 2.05(a)(ii).
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"Exchange Rate" means a rate equal to, (a) if the Maturity Price
per share of FSA Holdings Common Stock is greater than or equal to $32.48 (the
"Threshold Appreciation Price"), 0.8197 shares of FSA Holdings Common Stock per
DECS, (b) if the Maturity Price is less than the Threshold Appreciation Price
but is greater than the Initial Price, a fractional share of FSA Holdings Common
Stock per DECS so that the value thereof (determined at the Maturity Price) is
equal to the Initial Price (such fractional share being calculated to the
nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next highest 1/10,000th of a share) and (c) if the Maturity Price
is less than or equal to the Initial Price, one share of FSA Holdings Common
Stock per DECS; provided, however, that the Exchange Rate is subject to
adjustment from time to time pursuant to Section 2.04(a).
"Extraordinary Cash Dividend" has the meaning set forth in paragraph
(a)(vi) of Section 2.04(a).
"FSA Holdings Common Stock" has the meaning set forth in the
recitals to this Supplemental Indenture.
"Initial Price" means $26.625 per share of FSA Holdings Common
Stock.
"Maturity Price" means the average Closing Price per share of FSA
Holdings Common Stock on the 20 Trading Days immediately prior to, but not
including, the date of Maturity; provided, however, that if there are not 20
Trading Days for the FSA Holdings Common Stock occurring later than the 60th
calendar day immediately prior to, but not including, the date of Maturity,
Maturity Price means the market value per share of FSA Holdings Common Stock as
of Maturity as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company.
"NYSE" means the New York Stock Exchange, Inc.
"Reorganization Event" has the meaning set forth in Section 2.04(b).
"Share Components" means the numbers of shares of FSA Holdings
Common Stock per DECS specified in clauses (a) and (c) of the definition of
"Exchange Rate" set forth in this Article.
"Threshold Appreciation Price" has the meaning specified in the
definition of "Exchange Rate" set forth in this Article.
"Trading Day" means a day on which the security the Closing Price of
which is being determined (a) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (b) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of such security.
"Transaction Value" means (a) for any cash received in any
Reorganization Event, the amount of cash received per share of FSA Holdings
Common Stock, (b) for any property other than cash or securities received in any
Reorganization Event, an amount equal to the market value at Maturity of such
property received per share of FSA Holdings
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Common Stock as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company and (c) for any securities
received in any Reorganization Event, an amount equal to the average Closing
Price per share of such securities on the 20 Trading Days immediately prior to
Maturity multiplied by the number of such securities received for each share of
FSA Holdings Common Stock; provided, however, that in the case of clause (c), if
there are not 20 Trading Days for such securities occurring later than the 60th
calendar day immediately prior to, but not including, the date of Maturity,
Transaction Value means the market value per share of such securities as of
Maturity as determined by a nationally recognized independent investment banking
firm retained for such purpose by the Company multiplied by the number of such
securities received for each share of FSA Holdings Common Stock.
SECTION 1.02. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 1.03. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
SECTION 1.04. Separability.
In case any provision in this Supplemental Indenture or the DECS
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.05. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Supplemental Indenture
by any of the provisions of the Trust Indenture Act, such required provision
shall control.
SECTION 1.06. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, expressed or implied, shall
give to any person, other than the parties hereto and their successors
hereunder, and the Holders of the DECS any benefit or any legal or equitable
right, remedy or claim under this Supplemental Indenture.
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SECTION 1.07. Application of Supplemental Indenture.
This Supplemental Indenture shall take effect on the date hereof,
and shall apply only to the DECS. This Supplemental Indenture shall have no
effect on any other Debt Securities, whether originally issued prior to the date
hereof or thereafter.
SECTION 1.08. Governing Law.
THIS SUPPLEMENTAL INDENTURE AND THE DECS SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS SUPPLEMENTAL
INDENTURE AND EACH SUCH DECS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
ARTICLE II
The DECS
SECTION 2.01. Title and Terms.
There is hereby created under the Indenture a series of Debt
Securities known and designated as the "7 5/8% Exchangeable Notes Due May 15,
1999" of the Company to be issued from time to time. The aggregate principal
amount of DECS that may be authenticated and delivered under this Indenture is
limited to $260,826,567.38, except for DECS authenticated and delivered upon
reregistration of, transfer of, or in exchange for, or in lieu of, other DECS
pursuant to Section 304, 305, 306, 1106 or 1308 of the Indenture.
The Stated Maturity for payment of principal of the DECS shall be
May 15, 1999 and the DECS shall bear interest at the rate of 7 5/8% per annum,
from May 13, 1996 or the most recent Interest Payment Date to which interest has
been paid or duly provided for, payable quarterly in arrears on February 15, May
15, August 15 and November 15 of each year (commencing August 15, 1996), to the
persons in whose names the DECS (or any predecessor securities) are registered
at the close of business on the last day of the calendar month immediately
preceding such interest payment date, until principal thereof is paid or made
available for payment.
The DECS shall be issuable in denominations of $26.625 and any
integral multiple thereof.
The DECS shall not be issued as Discount Securities.
The DECS shall be initially issued in the form of a Global Security
and the Depositary for the DECS shall be the Depository Trust Company, New York,
New York.
The DECS shall be issuable as Registered Securities only, without
coupons.
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The Company shall not be obligated to pay any additional amount on
the DECS in respect of taxes, except as otherwise provided in Sections 2.06 and
3.02.
The form of DECS attached hereto as Exhibit A is hereby adopted,
pursuant to Section 1101(6) of the Indenture, as a form of Debt Securities of a
series that consists of DECS.
The DECS shall be mandatorily exchangeable as provided in Section
2.02.
SECTION 2.02. Exchange at Maturity.
Subject to Section 2.04(b), at Maturity the principal amount of each
DECS shall be mandatorily exchanged by the Company into a number of shares of
FSA Holdings Common Stock at the Exchange Rate; provided, however, that,
pursuant to Section 2.03, no fractional shares of FSA Holdings Common Stock
shall be issued. The Holders of the DECS shall be responsible for the payment of
any and all brokerage costs upon the subsequent sale of such shares. The Company
may, at its option, in lieu of delivering shares of FSA Holdings Common Stock,
deliver cash in an amount (calculated to the nearest 1/100th of a dollar per
DECS or, if there is not a nearest 1/100th of a dollar, then to the next higher
1/100th of a dollar) equal to the product of the number of shares of FSA
Holdings Common Stock otherwise deliverable on the date of Maturity multiplied
by the Maturity Price; provided, however, that if such option is exercised, the
Company shall deliver cash with respect to all, but not less than all, of the
shares of FSA Holdings Common Stock that would otherwise be deliverable, except
to those Holders with respect to whom the Company has determined delivery of
cash may violate applicable state law and to whom it will deliver shares of FSA
Holdings Common Stock as provided herein. In determining the amount of cash
deliverable in exchange for the DECS in lieu of shares of FSA Holdings Common
Stock pursuant to the prior sentence hereof, if more than one DECS shall be
surrendered for exchange at one time by the same Holder, the amount of cash
which shall be delivered upon exchange shall be computed on the basis of the
aggregate number of DECS so surrendered at Maturity.
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SECTION 2.03. No Fractional Shares.
If more than one DECS shall be surrendered for exchange pursuant to
Section 2.02 at one time by the same Holder, the number of full shares of FSA
Holdings Common Stock which shall be delivered upon such exchange, in whole or
in part, as the case may be, shall be computed on the basis of the aggregate
number of DECS surrendered. No fractional shares or scrip representing
fractional shares of FSA Holdings Common Stock shall be issued or delivered upon
any exchange pursuant to Section 2.02 of any DECS. In lieu of any fractional
share of FSA Holdings Common Stock which, but for the immediately preceding
sentence, would otherwise be deliverable upon such exchange, the Company,
through any applicable Paying Agent, shall make a cash payment in respect of
such fractional interest in an amount equal to the value of such fractional
shares at the Maturity Price. The Company shall, upon such exchange of any DECS,
provide cash to any applicable Paying Agent in an amount equal to the cash
payable with respect to any fractional shares of FSA Holdings Common Stock
deliverable upon such exchange, and the Company shall retain such fractional
shares of FSA Holdings Common Stock.
SECTION 2.04. Adjustment of Exchange Rate.
(a) Adjustment for Distributions, Reclassifications, etc. The
Exchange Rate shall be subject to adjustment from time to time as follows:
(i) If FSA Holdings shall:
(A) pay a dividend or make a distribution, in either case,
with respect to the FSA Holdings Common Stock in shares of such
stock;
(B) subdivide or split the outstanding shares of FSA Holdings
Common Stock into a greater number of shares;
(C) combine the outstanding shares of FSA Holdings Common
Stock into a smaller number of shares; or
(D) issue by reclassification (other than a reclassification
upon a Reorganization Event, as defined in paragraph (b) of this
Section) of shares of FSA Holdings Common Stock any shares of common
stock of FSA Holdings;
then, in any such event, the Exchange Rate shall be adjusted by adjusting
each of the Share Components of the Exchange Rate in effect immediately
prior to such event so that a Holder of any DECS shall be entitled to
receive, upon mandatory exchange pursuant to Section 2.02 of the principal
amount of such DECS at Maturity pursuant to either Share Component of the
Exchange Rate, the number of shares of FSA Holdings Common Stock (or, in
the case of a reclassification referred to in clause (D) of this sentence,
the number of shares of other common stock of FSA Holdings issued pursuant
thereto) which such Holder of such DECS would have owned or been entitled
to receive immediately following such event had such DECS been exchanged
pursuant
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to either Share Component of the Exchange Rate immediately prior
to such event or any record date with respect thereto. Each such
adjustment shall become effective at the opening of business on the
Business Day next following the record date for determination of Holders
of FSA Holdings Common Stock entitled to receive such dividend or
distribution in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision, split, combination or reclassification. Each such adjustment
shall be made successively.
(ii) If FSA Holdings shall, after the date hereof, issue rights
or warrants to all holders of FSA Holdings Common Stock entitling them to
subscribe for or purchase shares of FSA Holdings Common Stock (other than
rights to purchase FSA Holdings Common Stock pursuant to a plan for the
reinvestment of dividends or interest) at a price per share less than the
current market price of FSA Holdings Common Stock (determined
for purposes of this paragraph (a)(ii) as the average Closing Price per
share of FSA Holdings Common Stock on the 20 Trading Days immediately
prior to the date such rights or warrants are issued; provided, however,
that if there are not 20 Trading Days for the FSA Holdings Common Stock
occurring later than the 60th calendar day immediately prior to, but not
including, such date, such current market price shall be determined as the
market value per share of FSA Holdings Common Stock as of such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company), then in each case the Exchange
Rate shall be adjusted by multiplying each of the Share Components of the
Exchange Rate in effect immediately prior to the date of issuance of such
rights or warrants, by a fraction, of which the numerator shall be the
number of shares of FSA Holdings Common Stock outstanding on the date of
issuance of such rights or warrants, immediately prior to such issuance,
plus the number of additional shares of FSA Holdings Common Stock offered
for subscription or purchase pursuant to such rights or warrants, and of
which the denominator shall be the number of shares of FSA Holdings Common
Stock outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of additional shares
of FSA Holdings Common Stock which the aggregate offering price of the
total number of shares of FSA Holdings Common Stock so offered for
subscription or purchase pursuant to such rights or warrants would
purchase at such current market price (calculated as the average Closing
Price per share of FSA Holdings Common Stock on the 20 Trading Days
immediately prior to the date such rights or warrants are issued;
provided, however, that if there are not 20 Trading Days for the FSA
Holdings Common Stock occurring later than the 60th calendar day
immediately prior to, but not including, such date, such current market
price shall be determined as the market value per share of such FSA
Holdings Common Stock as of such date as determined by a nationally
recognized independent investment banking firm retained for this purpose
by the Company), which shall be determined by multiplying such total
number of shares by the exercise price of such rights or warrants and
dividing the product so obtained by such current market price. Such
adjustment shall become effective at the opening of business on the
Business Day next following the record date for the determination of
stockholders entitled to receive such rights or warrants. To the extent
that shares of
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FSA Holdings Common Stock are not delivered after the expiration of such
rights or warrants, the Exchange Rate shall be readjusted to the Exchange
Rate which would then be in effect had such adjustments for the issuance
of such rights or warrants been made upon the basis of delivery of only
the number of shares of FSA Holdings Common Stock actually delivered. Each
such adjustment shall be made successively.
(iii) If FSA Holdings shall pay a dividend or make a
distribution to all holders of FSA Holdings Common Stock of evidences of
its indebtedness or other assets (excluding any dividends or distributions
referred to in clause (A) of paragraph (a)(i) of this Section, any shares
of common stock issued pursuant to a reclassification referred to in
clause (D) of paragraph (a)(i) of this Section above or any ordinary
periodic cash dividends that do not constitute Extraordinary Cash
Dividends) or shall issue to all holders of FSA Holdings Common Stock
rights or warrants to subscribe for or purchase any of its
securities (other than those referred to in paragraph (a)(ii) of this
Section), then in each such case, the Exchange Rate shall be adjusted by
multiplying each of the Share Components of the Exchange Rate in effect on
the record date mentioned below, by a fraction of which the numerator
shall be the current market price per share of the FSA Holdings Common
Stock on the record date for the determination of stockholders entitled to
receive such dividend or distribution (such current market price being
determined for purposes of this paragraph (a)(iii) as the average Closing
Price per share of FSA Holdings Common Stock on the 20 Trading Days
immediately prior to such record date; provided, however, that if there
are not 20 Trading Days for the FSA Holdings Common Stock occurring later
than the 60th calendar day immediately prior to, but not including, such
record date, such current market price shall be determined as the market
value per share of such FSA Holdings Common Stock as of such record date
as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company), and of which the
denominator shall be such current market price per share of FSA Holdings
Common Stock less the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and
described in a resolution adopted with respect thereto) as of such record
date of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights or warrants applicable to one
share of FSA Holdings Common Stock. Each such adjustment shall become
effective on the opening of business on the Business Day next following
the record date for the determination of stockholders entitled to receive
such dividend or distribution. Each such adjustment shall be made
successively.
(iv) Any shares of FSA Holdings Common Stock issuable in payment
of a dividend shall be deemed to have been issued immediately prior to the
close of business on the record date for such dividend for purposes of
calculating the number of outstanding shares of FSA Holdings Common Stock
under paragraph (a)(ii) of this Section.
(v) All adjustments to the Exchange Rate shall be calculated to
the nearest 1/10,000th of a share of FSA Holdings Common Stock (or if
there is not a nearest 1/10,000th of a share to the next lower 1/10,000th
of a share). No adjustment in the Exchange Rate shall be required unless
such adjustment would require an increase or decrease of at least one
percent
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therein; provided, however, that any adjustments which by reason
of this paragraph (a)(v) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. If an
adjustment is made to the Exchange Rate pursuant to paragraphs (a)(i),
(a)(ii) or (a)(iii) of this Section, an adjustment shall also be made to
the Maturity Price solely to determine which of clauses (a), (b) or (c) of
the definition of Exchange Rate set forth in Section 1.01 will apply upon
an exchange at Maturity pursuant to Section 2.02. The required adjustment
to the Maturity Price shall be made at Maturity by multiplying the
Maturity Price by the number or fraction determined under paragraphs
(a)(i), (a)(ii) or (a)(iii) of this Section by which the then existing
Exchange Rate was multiplied to adjust such rate. In the case of the
reclassification of any shares of FSA Holdings Common Stock into any
shares of common stock of FSA Holdings other than FSA Holdings Common
Stock, such shares of common stock shall be deemed shares of FSA Holdings
Common Stock solely to determine the Maturity Price and to apply the
Exchange Rate at Maturity. Each such adjustment to the Exchange Rate and
the Maturity Price shall be made successively. This paragraph (a)(v) shall
be so used to adjust the definition of Maturity Price only as such term is
used for the first time in each of subparagraphs (a), (b) and (c) of the
definition of Exchange Rate set forth in Section 1.01.
(vi) For purposes of the foregoing, the term "Extraordinary Cash
Dividend" shall mean, with respect to any consecutive 365-day period, any
cash dividend with respect to FSA Holdings Common Stock the amount of
which, together with the aggregate amount of all other such cash dividends
on the FSA Holdings Common Stock occurring in such 365-day period, exceeds
on a per share basis 10% of the average of the Closing Prices per share of
the FSA Holdings Common Stock over such 365-day period, and for purposes
of applying the formula set forth in clause (iii) above, the fair market
value of such dividends being calculated pursuant to such clause (iii)
shall be equal to (x) the aggregate amount of such cash dividend together
with the amounts of such other cash dividends occurring in such period
minus (y) the aggregate amount of such other cash dividends occurring in
such period for which a prior adjustment in the Exchange Rate was
previously made under this paragraph (a). In making the determinations
required by the foregoing sentence, the amount of cash dividends paid on a
per share basis shall be appropriately adjusted to reflect the occurrence
during such period of any event described in this paragraph (a).
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of FSA Holdings, or any
surviving entity or subsequent surviving entity of FSA Holdings (an "FSA
Holdings Successor"), with or into another entity (other than a merger or
consolidation in which FSA Holdings is the continuing corporation and in which
the FSA Holdings Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of FSA
Holdings or another corporation), (ii) any sale, transfer, lease or conveyance
to another corporation of the property of FSA Holdings, or any FSA Holdings
Successor, as an entirety or substantially as an entirety, (iii) any statutory
exchange of securities of FSA Holdings or any FSA Holdings Successor with
another corporation (other than in connection with a
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merger or acquisition) or (iv) any liquidation, dissolution or winding up of FSA
Holdings or any FSA Holdings Successor (any such event, a "Reorganization
Event"), each Holder of DECS will receive at Maturity, in lieu of shares of FSA
Holdings Common Stock, as required by Section 2.02, cash in an amount equal to
(a) if the Transaction Value is greater than or equal to the Threshold
Appreciation Price, $32.48, multiplied by the Transaction Value, (b) if the
Transaction Value is less than the Threshold Appreciation Price but greater than
the Initial Price, the Initial Price and (c) if the Transaction Value is less
than or equal to the Initial Price, the Transaction Value. Notwithstanding the
foregoing, in lieu of delivering cash as provided above, the Company may at its
option deliver an equivalent value of securities or other property received in
such Reorganization Event, determined in accordance with clause (b) or (c) of
the definition of Transaction Value set forth in Section 1.01, as applicable. If
the Company elects to deliver securities or other property, Holders of DECS will
be responsible for the payment of any and all brokerage and other transaction
costs upon the sale of such securities or other property. The kind and amount of
securities into which the DECS shall be exchangeable after consummation of such
transaction shall be subject to adjustment as described in paragraph (a) of this
Section following the date of consummation of such transaction.
SECTION 2.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Exchange Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Exchange Rate in accordance
with Section 2.04 and prepare a certificate signed by an officer of the
Company setting forth the adjusted Exchange Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based, which certificate
shall be conclusive, final and binding evidence of the correctness of the
adjustment, and file such certificate forthwith with the Trustee; and
(ii) within 10 Business Days following the occurrence of an
event that permits or requires an adjustment to the Exchange Rate pursuant
to Section 2.04(a) (each, a "Dilution Event") or a Reorganization Event
that permits or requires a change in the consideration to be received by
Holders pursuant to Section 2.04(b) (or, in either case, if the Company is
not aware of such occurrence, as soon as practicable after becoming so
aware), provide written notice to the Trustee and to the Holders of the
outstanding DECS of the occurrence of such Dilution Event or
Reorganization Event including a statement in reasonable detail setting
forth the method by which any adjustment to the Exchange Rate or change in
the consideration to be received was determined and setting forth the
revised Exchange Rate or consideration, as the case may be, per DECS,
provided, that, in respect of any adjustment to the Maturity Price, such
notice need only disclose the factor by which the Maturity Price is to be
multiplied pursuant to Section 2.04(a)(v) in order to determine which
clause of the definition of the Exchange Rate will apply at Maturity, it
being understood that, until Maturity, the Exchange Rate itself cannot be
determined.
11
<PAGE>
(b) In case at any time while any of the DECS are outstanding the
Company receives notice that:
(i) FSA Holdings shall declare a dividend (or any other
distribution) on or in respect of the FSA Holdings Common Stock to which
Section 2.04(a)(i) or (ii) shall apply (other than any cash dividends and
distributions, if any, paid from time to time by FSA Holdings that do not
constitute Extraordinary Cash Dividends);
(ii) FSA Holdings shall authorize the issuance to all holders of
FSA Holdings Common Stock of rights or warrants to subscribe for or
purchase shares of FSA Holdings Common Stock or of any other subscription
rights or warrants;
(iii) there shall occur any conversion or reclassification of
FSA Holdings Common Stock (other than a subdivision or combination of
outstanding shares of such FSA Holdings Common Stock) or any
consolidation, merger or reorganization to which FSA Holdings is a party
and for which approval of any stockholders of FSA Holdings is required, or
the sale or transfer of all or substantially all of the assets of FSA
Holdings; or
(iv) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of FSA Holdings;
then the Company shall promptly cause to be delivered to the Trustee and any
applicable Paying Agent and filed at the office or agency maintained for the
purpose of exchange of DECS at Maturity in the Borough of Manhattan, in The City
of New York by the Trustee (or any applicable Paying Agent), and shall promptly
cause to be mailed to the Holders of DECS at their last addresses as they shall
appear upon the registration books of the Security Registrar, at least 10 days
before the date hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one is specified), a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants, or, if a record is not to be taken,
the date as of which the holders of FSA Holdings Common Stock of record to be
entitled to such dividend, distribution or grant of rights or warrants are to be
determined, or (y) the date, if known by the Company, on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective.
(c) On or prior to four Business Days preceding the Stated Maturity
of the DECS, the Company will provide notice to the Holders of record of the
DECS and to the Trustee and will publish a notice in a daily newspaper of
national circulation stating whether the Company will deliver, in accordance
with Section 2.02, FSA Holdings Common Stock or cash (or, in accordance with
Section 2.04(b), cash or any other property or securities) upon the mandatory
exchange of the principal amount of the DECS; provided, however, in the event
the Company intends to deliver cash, the Company shall have the right to require
certification as to the domicile and residency of each beneficial holder of
DECS, as a condition to delivery of such cash.
12
<PAGE>
SECTION 2.06. Taxes.
(a) The Company will pay any and all documentary, stamp, transfer or
similar taxes that may be payable in respect of the transfer and delivery of FSA
Holdings Common Stock pursuant hereto; provided, however, that the Company shall
not be required to pay any such tax which may be payable in respect of any
transfer involved in the delivery of FSA Holdings Common Stock in a name other
than that in which the DECS so exchanged were registered, and no such transfer
or delivery shall be made unless and until the person requesting such transfer
has paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
(b) The parties hereto hereby agree, and each Holder of a DECS by
its purchase of a DECS hereby agrees:
(i) to treat, for U.S. federal income tax purposes, each DECS as
a unit (the "unit characterization") consisting of (A) a debt obligation
(the "Exchange Note") with a fixed principal amount and issue price equal
to the principal amount of the DECS, bearing interest at the stated
interest rate, and with the principal amount unconditionally payable at
Maturity, and (B) a purchase contract (the "Purchase Contract") pursuant
to which the Holder agrees to use the principal payment due on the
Exchange Note to purchase, at Maturity, the FSA Holdings Common Stock to
which the Holder is entitled to receive at that time (subject to the
Company's right to deliver cash in lieu of such FSA Holdings Common
Stock), which treatment will require, among other things, the Holder to
include in income as interest, in accordance with its method of
accounting, payments made with respect to the DECS that are denominated as
interest;
(ii) in the case of an initial purchase, to allocate the entire
purchase price of a DECS to the Exchange Note and to allocate no part
thereof to the Purchase Contract; and
(iii) to file all U.S. federal, state and local income and
franchise tax returns consistent with the unit characterization (unless
required otherwise by an applicable taxing authority).
13
<PAGE>
ARTICLE III
Covenants
SECTION 3.01. Shares Free and Clear.
With respect to the DECS only and for the benefit of only the
Holders thereof, the Company covenants and warrants that upon exchange of a DECS
at Maturity pursuant to the Indenture and this Supplemental Indenture, the
Holder of a DECS shall receive all rights held by the Company in the FSA
Holdings Common Stock for which such DECS is at such time exchangeable pursuant
to this Indenture, free and clear of any and all liens, claims, charges and
encumbrances other than any liens, claims, charges and encumbrances which may
have been placed on any FSA Holdings Common Stock by the prior owner thereof,
prior to the time such FSA Holdings Common Stock was acquired by the Company.
Except as provided in Section 2.06(a), the Company will pay all taxes and
charges with respect to the delivery of FSA Holdings Common Stock delivered in
exchange for DECS hereunder. In addition, the Company further warrants that any
FSA Holdings Common Stock so delivered in exchange for DECS hereunder shall be
free of any transfer restrictions (other than such as are solely attributable to
any Holder's status as an affiliate of FSA Holdings).
Section 3.02. Discharge of Indenture.
With respect to the DECS only and for the benefit of only the
Holders thereof, the Company surrenders all rights and powers conferred on it by
subclause (B) of clause (1) of Section 401 of the Indenture.
ARTICLE IV
Miscellaneous
SECTION 4.01. Confirmation of Indenture.
The Indenture, as supplemented and amended by this Supplemental
Indenture and all other indentures supplemental thereto, is in all respects
ratified and confirmed, and the Indenture, this Supplemental Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.
14
<PAGE>
SECTION 4.02. Concerning the Trustee.
The Trustee assumes no duties, responsibilities or liabilities by
reason of this Supplemental Indenture other than as set forth in the Indenture.
The Trustee has no responsibility for the correctness of the statements of fact
herein contained, which shall be taken as the statements of the Company, and
makes no representations as to the validity or sufficiency of this Supplemental
Indenture.
-------------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
15
<PAGE>
In WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
SALOMON INC
By: /s/ William J. Jennings
-------------------------------
Name: William J. Jennings
Title: Senior Vice President
Attest: /s/ Mary Allocco
--------------------------
Name: Mary Allocco
Title: Assistant Secretary
CITIBANK, N.A., as Trustee
By: /s/ P. DeFelice
-------------------------------
Name: P. DeFelice
Title: Vice President
Attest: /s/ Carol Ng
----------------------
Name: Carol Ng
Title: Vice President
16
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 8th day of May, 1996, before me personally came William J.
Jennings, to me known, who, being by me duly sworn, did depose and say that
she/he is the Senior V.P. of SALOMON INC, one of the corporations described in
and which executed the foregoing instrument; that she/he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she/he signed her/his name thereto by like authority.
/s/ Kathleen Burns
-----------------------------------
Notary Public
SEAL
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 9th day of May, 1996, before me personally came P. DeFelice,
to me known, who, being by me duly sworn, did depose and say that he is a Vice
President of CITIBANK, N.A., one of the corporations described in and which
executed the foregoing instrument; that she/he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she/he signed her/his name thereto by like authority.
/s/ Jeffry Berger
-----------------------------------
Notary Public
SEAL
17
<PAGE>
EXHIBIT A
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depositary or a nominee of the Depositary. Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
security issued is registered in the name of Cede & Co., or such other name as
requested by an authorized representative of the Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
NO._________________ CUSIP NO. __________
Form of Face of DECS
SALOMON INC
__________ DECS (SM)
(Debt Exchangeable for Common Stock (SM))
7 5/8% Exchangeable Note Due May 15, 1999
(Subject to Exchange at Maturity into Shares of
Common Stock, Par Value $.01 Per Share,
of Financial Security Assurance Holdings Ltd.)
Salomon Inc, a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co. or registered assigns, the principal sum of ____________ DOLLARS (or $26.625
for each Debt Exchangeable for Common Stock (each, a "DECS") represented by this
note) on May 15, 1999 (subject to the mandatory exchange provisions at Maturity
described below), and to pay interest (computed on the basis of a 360-
F-1
<PAGE>
day year of twelve 30-day months) on such principal amount from May 13, 1996, or
from the most recent Interest Payment Date (as defined below) to which interest
has been paid or duly provided for, quarterly on February 15, May 15, August 15
and November 15 of each year (each, an "Interest Payment Date" and,
collectively, the "Interest Payment Dates"), commencing August 15, 1996, at the
rate per annum specified in the title of this note, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
said Indenture, be paid to the person in whose name this DECS (or the DECS in
exchange or substitution for which this DECS was issued) is registered at the
close of business on the Regular Record Date (as defined below) for interest
payable on such Interest Payment Date. The Regular Record Date for any interest
payment is the close of business on the last day of the calendar month
immediately preceding the relevant Interest Payment Date, whether or not a
Business Day (as defined below), provided that interest payable at Maturity
shall be payable to the person to whom the principal hereof is payable. In any
case where such Interest Payment Date shall not be a Business Day, then
(notwithstanding any other provision of said Indenture or this DECS) payment of
such interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such date,
and, if such payment is so made, no interest shall accrue for the period from
and after such date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holder on such Regular
Record Date, as the case may be, and may be paid to the person in whose name
this DECS (or the DECS in exchange or substitution for which this DECS was
issued) is registered at the close of business on a record date for the payment
of such interest to be fixed by the Trustee for the DECS, notice whereof shall
be given to Holders of the DECS not less than 10 days prior to such record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the DECS may be listed and not
deemed impracticable by the Trustee, and upon such notice as may be required by
such exchange. At Maturity, the principal amount of this DECS will be
mandatorily exchanged into a number of shares of common stock, par value $.01
per share (the "FSA Holdings Common Stock"), of Financial Security Assurance
Holdings Ltd. ("FSA Holdings") at the Exchange Rate (as defined below). The
"Exchange Rate" is equal to (a) if the Maturity Price (as defined below) is
greater than or equal to $32.48 (the "Threshold Appreciation Price"), 0.8197
shares of FSA Holdings Common Stock per DECS, (b) if the Maturity Price is less
than the Threshold Appreciation Price but is greater than $26.625 (the "Initial
Price"), a fractional share of FSA Holdings Common Stock per DECS so that the
value thereof (determined at the Maturity Price) is equal to the Initial Price
(such fractional share being calculated to the nearest 1/10,000th of a share or,
if there is not a nearest 1/10,000th of a share, to the next higher 1/10,000th
of a share) and (c) if the Maturity Price is less than or equal to the Initial
Price, one share of FSA Holdings Common Stock per DECS. ACCORDINGLY, THE VALUE
OF THE FSA HOLDINGS COMMON STOCK TO BE RECEIVED BY HOLDERS OF THE DECS (OR, AS
DISCUSSED BELOW, THE CASH EQUIVALENT THAT MAY BE RECEIVED IN LIEU OF SUCH
SHARES) AT MATURITY WILL NOT NECESSARILY EQUAL THE
F-2
<PAGE>
PRINCIPAL AMOUNT OF SUCH DECS. Any shares of FSA Holdings Common Stock delivered
by the Company to the Holders of the DECS that are not affiliated with FSA
Holdings shall be free of any transfer restrictions and the holders of DECS will
be responsible for the payment of any and all brokerage costs upon the
subsequent sale of such shares. No fractional shares of FSA Holdings Common
Stock will be issued at Maturity as provided in the Indenture. The Company may
at its option, in lieu of delivering shares of FSA Holdings Common Stock,
deliver cash in an amount equal to the value of such number of shares of FSA
Holdings Common Stock at the Maturity Price as provided in the Indenture;
provided, however, that if such option is exercised, the Company shall deliver
cash with respect to all, but not less than all, of the shares of FSA Holdings
Common Stock that would otherwise be deliverable, except to those Holders with
respect to whom the Company has determined delivery of cash may violate
applicable state law and to whom it will deliver shares of FSA Holdings Common
Stock as provided in the Indenture. Notwithstanding the foregoing, (i) in the
case of certain dilution events, the Exchange Rate will be subject to adjustment
and (ii) in the case of certain reorganization events, the property received by
Holders of DECS at Maturity will be cash or other property, as provided in the
Indenture.
The "Maturity Price" is defined as the average Closing Price per
share of FSA Holdings Common Stock on the 20 Trading Days immediately prior to
(but not including) the date of Maturity or, under certain circumstances, the
market value per share of FSA Holdings Common Stock as of the date of Maturity
as determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company, as provided in the Indenture. The
"Closing Price" of any security on any date of determination means the closing
sale price (or, if no closing price is reported, the last reported sale price)
of such security (regular way) on the New York Stock Exchange (the "NYSE") on
such date or, if such security is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, or if such security is
not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq National Market, or, if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization. A "Trading
Day" is defined as a day on which the security the Closing Price of which is
being determined (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of such security. "Business Day" means any day that is not a
Saturday, a Sunday or a day on which the NYSE or banking institutions or trust
companies in The City of New York, New York are authorized or obligated by law
or executive order to close.
Interest on this DECS will be payable, and delivery of FSA Holdings
Common Stock (or, at the Company's option, cash in an amount equal to the value
of such FSA Holdings Common Stock) in exchange for the principal amount of this
DECS at Maturity will
F-3
<PAGE>
be made upon surrender of this DECS, at the office or agency of the Company
maintained for that purpose in The City of New York, New York, and payment of
interest on (and, if the Company elects not to deliver FSA Holdings Common Stock
upon exchange at Maturity, the cash equivalent thereof payable upon exchange for
the principal amount of) this DECS will be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear on the register for the
DECS.
F-4
<PAGE>
ADDITIONAL PROVISIONS OF THIS DECS ARE CONTAINED ON THE REVERSE
HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
IN THIS PLACE.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee for this DECS by manual signature, this DECS shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose. "DECS" and "Debt Exchangeable for Common Stock" are service
marks of Salomon Brothers Inc.
In WITNESS WHEREOF, Salomon Inc has caused this instrument to be
duly executed under its corporate seal.
Dated:
SALOMON INC
By:______________________
Name:
Title:
Attest:
Name:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the within-mentioned Indenture.
CITIBANK, N.A., as Trustee,
By: ____________________________
Authorized Officer
F-5
<PAGE>
Form of Reverse of DECS
SALOMON INC
7 5/8% Exchangeable Note due May 15, 1999
(Subject to Exchange at Maturity into Shares of
Common Stock, Par Value $.01 Per Share,
of Financial Security Assurance Holdings Ltd.)
This DECS is one of a duly authorized issue of debentures, notes or
other evidences of indebtedness (hereinafter called the "Debt Securities") of
the Company of the series hereinafter specified, which series is limited in
aggregate principal amount to $260,826,567.38, all such Debt Securities issued
and to be issued under an indenture dated as of December 1, 1988, as
supplemented by the First Supplemental Indenture dated September 7, 1990, the
Second Supplemental Indenture thereto dated June 12, 1991, the Third
Supplemental Indenture thereto dated July 1, 1992, the Fourth Supplemental
Indenture thereto dated October 29, 1992, the Fifth Supplemental Indenture
thereto dated December 14, 1993, the Sixth Supplemental Indenture thereto dated
December 29, 1994, the Seventh Supplemental Indenture thereto dated February 1,
1996, and the Eighth Supplemental Indenture thereto dated May 8, 1996 (as so
supplemented and as may be further supplemented from time to time, the
"Indenture") between the Company and Citibank, N.A., as trustee (herein called
the "Trustee", which term includes any successor Trustee under the Indenture),
pursuant to which the Company has designated Citibank, N.A. as Trustee for the
DECS, to which Indenture and all other indentures supplemental thereto reference
is hereby made for a statement of the rights and limitation of rights thereunder
of the Holders of the Debt Securities and of the rights, obligations, duties and
immunities of the Trustee for each series of Debt Securities and of the Company,
and the terms upon which the Debt Securities are and are to be authenticated and
delivered. As provided in the Indenture, the Debt Securities may be issued in
one or more series, which different series may be issued in various aggregate
principal amounts, may be denominated in currencies other than U.S. Dollars,
(including composite currencies), may mature at different times, may bear
interest, if any, at different rates, may be subject to different redemption
provisions, if any, may be subject to different sinking, purchase of analogous
funds, if any, may be subject to different covenants and Events of Default and
may otherwise vary as in the Indenture provided or permitted. This DECS is one
of a series of the Debt Securities designated as 7 5/8% Exchangeable Notes Due
May 15, 1999.
R-1
<PAGE>
The DECS may not be redeemed prior to Stated Maturity and are not
entitled to the benefit of any sinking fund.
The provisions contained in the Indenture for defeasance and
discharge of the entire principal of all the Debt Securities of any series upon
compliance by the Company with certain conditions set forth therein will not be
applicable to the DECS.
If an Event of Default with respect to the DECS, as defined in the
Indenture, shall occur and be continuing, the principal of all DECS may be
declared due and payable and therefore will result in the mandatory exchange of
the principal amount thereof for FSA Holdings Common Stock (or, at the Company's
option, cash), all in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series
under the Indenture at anytime by the Company with the consent of the Holders of
not less than a majority in aggregate principal amount of the Debt Securities at
the time outstanding of each series to be affected thereby. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Debt Securities of any series at the time outstanding,
on behalf of the Holders of all the Debt Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences with respect to such
series. Any such consent or waiver by the Holder of this DECS shall be
conclusive and binding upon such Holder and upon all future Holders of this DECS
and of any DECS issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent of waiver is made upon this
DECS.
No reference herein to the Indenture and no provision of this DECS
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this DECS
at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this DECS is transferable on the register for the DECS, upon
surrender of this DECS for registration of transfer at the office or agency of
the Company to be maintained for that purpose in The City of New York, New York,
or at any other office or agency of the Company maintained for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar for the DECS duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new DECS, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with the registration of such transfer or exchange,
other than certain exchanges not involving any transfer.
Certain terms used in this DECS which are defined in the Indenture
have the meanings set forth therein.
THIS DECS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
R-2
<PAGE>
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Trustee for the DECS and any agent of the Company
or such Trustee may treat the person in whose name this DECS is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this DECS be overdue, and neither the
Company, such Trustee nor any such agent shall be affected by notice to the
contrary.
R-3
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
--------------------------------
(Cust) (Minor)
Under Uniform Gifts to Minors Act
- --------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
-------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
/ / / / /-/ / / /-/ / / / /
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code of Assignee
________________________________________________________________________________
the within DECS and all rights thereunder, hereby irrevocably constituting and
appointing
_______________________________________________________________________ attorney
to transfer said DECS on the books of Salomon Inc with full power of
substitution in the premises.
Dated: ______________________________________
Signature
______________________________________
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within DECS in every particular,
without alteration or enlargement or
any change whatsoever.
R-4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
------------
Salomon Inc
(Exact name of obligor as specified in its charter)
Delaware 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
Seven World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
------------
Senior Debt Securities
(Title of the indenture securities)
------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-46892, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 10th day of May, 1996.
CHEMICAL BANK
By /s/ F. J. Grippo
F. J. Grippo
Vice President
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<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1995, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 6,390
Interest-bearing balances ......................... 2,544
Securities: ..........................................
Held to maturity securities............................ 3,807
Available for sale securities.......................... 26,522
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................ 750
Securities purchased under agreements to resell ... 259
Loans and lease financing receivables:
Loans and leases, net of unearned income $72,938
Less: Allowance for loan and lease losses 1,917
Less: Allocated transfer risk reserve ... 104
Loans and leases, net of unearned income, -------
allowance, and reserve ............................ 70,917
Trading Assets ....................................... 27,963
Premises and fixed assets (including capitalized
leases)............................................ 1,355
Other real estate owned ............................... 21
Investments in unconsolidated subsidiaries and
associated companies............................... 171
Customer's liability to this bank on acceptances
outstanding ....................................... 1,166
Intangible assets ..................................... 433
Other assets .......................................... 4,822
--------
TOTAL ASSETS .......................................... $147,120
========
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<PAGE>
LIABILITIES
Deposits
In domestic offices ................................ $ 47,524
Noninterest-bearing ......................... $17,041
Interest-bearing ............................ 30,483
In foreign offices, Edge and Agreement -------
subsidiaries, and IBF's ............................ 37,690
Noninterest-bearing .............................. $ 147
Interest-bearing ............................ 37,543
-------
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ............................ 9,384
Securities sold under agreements to repurchase ..... 2,166
Demand notes issued to the U.S. Treasury .............. 741
Trading liabilities ................................... 21,847
Other Borrowed money:
With original maturity of one year or less ......... 9,669
With original maturity of more than one year ....... 146
Mortgage indebtedness and obligations under capitalized
leases ............................................. 14
Bank's liability on acceptances executed and outstanding 1,180
Subordinated notes and debentures ..................... 3,411
Other liabilities ..................................... 5,290
TOTAL LIABILITIES ..................................... 139,062
--------
EQUITY CAPITAL
Common stock .......................................... 620
Surplus ............................................... 4,665
Undivided profits and capital reserves ................ 3,055
Net unrealized holding gains (Losses)
on available-for-sale securities ...................... (290)
Cumulative foreign currency translation adjustments ... 8
TOTAL EQUITY CAPITAL .................................. 8,058
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .......................... $147,120
========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
WILLIAM B. HARRISON )
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