<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SALOMON INC DELAWARE 22-1660266
SI FINANCING TRUST I DELAWARE TO BE APPLIED FOR
(EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER) OF INCORPORATION OR IDENTIFICATION NO.)
ORGANIZATION)
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 783-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ARNOLD S. OLSHIN, ESQ., SECRETARY
SALOMON INC
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 783-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
GREGORY M. SHAW, ESQ. ALLAN G. SPERLING, ESQ.
CRAVATH, SWAINE & MOORE CLEARY, GOTTLIEB, STEEN & HAMILTON
825 EIGHTH AVENUE ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10006
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable on or after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the 'Securities Act'), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / / _______
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /x/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
OFFERING PRICE AGGREGATE
AMOUNT TO BE PER OFFERING AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(1)(2)(3) PRICE(1)(2)(3) REGISTRATION FEE(1)
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<S> <C> <C> <C> <C>
Units.................................................
Preferred Securities..................................
Guarantee of Preferred Securities.....................
Subordinated Debt Securities..........................
Purchase Contracts....................................
Cumulative Preferred Stock Series F (without par
value)..............................................
Depositary Shares.....................................
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Total........................................ $1,000,000 100% $1,000,000 $344.83
</TABLE>
(1) Pursuant to Rule 457(o) under the Securities Act, which permits the
registration fee to be calculated on the basis of the maximum aggregate
offering price of all the securities listed, the table does not specify by
each class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price. The
proposed maximum aggregate offering price of all the securities listed
includes the consideration required to be paid in connection with the
settlement of the Purchase Contracts.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Exclusive of accrued interest and dividends, if any.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 26, 1996
PROSPECTUS
% TRUST PREFERRED STOCK(SERVICE MARK) (TRUPS(SERVICE MARK))* UNITS
consisting of
SI FINANCING TRUST I
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY SALOMON INC
and
SALOMON INC
PURCHASE CONTRACTS
Each requiring the Purchase on , 2021 (or Earlier) of One
Depositary Share Representing a One-Twentieth Interest in a Share of
% Cumulative Preferred Stock, Series F, Liquidation Preference $500
Per Share, of Salomon Inc at a Purchase Price of $25 Per Depositary Share.
Each % Trust Preferred Stock(Service Mark) (TRUPS(Service Mark))* Unit (a
'Unit') will consist of (i) a % Preferred Security (the 'Preferred
Security') of SI Financing Trust I (the 'Trust'), having a stated liquidation
amount of $25 (the 'Stated Amount'), and (ii) a related contract (the 'Purchase
Contract') requiring the purchase on , 2021 (or earlier as
described below) of one Depositary Share (a 'Depositary Share') representing a
one-twentieth interest in a share of % Cumulative Preferred Stock, Series
F, liquidation preference $500 per share (the 'Series F Preferred Stock'), of
Salomon Inc (the 'Company') at a purchase price of $25 per Depositary Share. A
holder of a Unit (a 'Unitholder') may cause the Preferred Security to be
redeemed and the proceeds thereof to be used to pay the purchase price of a
Depositary Share under the Purchase Contract.
(continued on following page)
SEE 'RISK FACTORS' BEGINNING ON PAGE 10 FOR CERTAIN CONSIDERATIONS RELEVANT TO
AN INVESTMENT IN THE UNITS.
Application will be made to list the Units on the New York Stock Exchange (the
'NYSE') under the symbol ' .' Prior to this offering there has been no
public market for the Units. In the event that a Preferred Security is separated
from the related Purchase Contract, the resulting separated Purchase Contract
will not be transferable without the prior written consent of the Company and
will not be tradable on the NYSE. The Preferred Securities will not be listed or
traded on any securities exchange. Unless and until a significant number of
Preferred Securities are separated from the related Purchase Contracts, there
will be no market for the Preferred Securities and even then there is not
expected to be a market for Preferred Securities separate from the Units.
Application will be made to list the Depositary Shares on the NYSE. The Series F
Preferred Stock will not be listed and the Company does not expect that there
will be any trading market for the Series F Preferred Stock except as
represented by the Depositary Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
Per Unit..............
Total(3)..............
<CAPTION>
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</TABLE>
(1) Plus accrued distributions on the Preferred Securities and Contract Fees, if
any, from the date of issue.
(2) Before deducting expenses payable by the Company estimated to be
$ .
(3) The Underwriters will have an option, exercisable within 30 days from the
date hereof, to purchase up to an additional [ ] Units at the Price to
Public, less the Underwriting Discount, for the purpose of covering
over-allotments, if any. If the Underwriters exercise such option in full,
the total Price to Public, Underwriting Discount and Proceeds to Company
will be $ , $ and $ , respectively. See
'Underwriting.'
The Units are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Units will be made through the facilities of The Depository
Trust Company, on or about , 1996.
*Salomon Inc has filed applications with the United States Patent and Trademark
Office for the registration of the Trust Preferred Stock and TRUPS service
marks.
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SALOMON BROTHERS INC
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The date of this Prospectus is , 1996.
<PAGE>
(continued from previous page)
Each Unit will entitle the holder thereof to receive % of the Stated Amount
per annum (equivalent to $ per annum), consisting of (i) % per annum of
the Stated Amount in distributions on the related Preferred Security and (ii)
% per annum of the Stated Amount in Contract Fees (as defined herein).
Distributions on the Preferred Securities and Contract Fees will accrue from the
date of original issuance of the Units and will be payable quarterly in arrears
on each , , and
(each, a 'Payment Date'), commencing on , 1996. In addition, each
Unit will entitle the holder thereof to all other proportional rights and
preferences of the Preferred Securities (including liquidation, voting and
redemption rights).
Each Depositary Share will entitle the holder thereof to all proportional rights
and preferences of the Series F Preferred Stock (including dividend, voting,
redemption and liquidation rights). The proportionate liquidation preference of
each Depositary Share will be $25. See 'Description of the Depositary Shares.'
Dividends on the Series F Preferred Stock will be cumulative from the date of
issue and will be payable quarterly on each Payment Date at the rate of %
per annum (equivalent to $ per annum per Depositary Share). See
'Description of the Depositary Shares--Dividends and Other Distributions.' The
Series F Preferred Stock will be redeemable at the option of the Company at any
time on or after the later of , 2001 or the date of issue, in
whole or in part, at a redemption price of $500 per share (equivalent to $25 per
Depositary Share), plus accrued and unpaid dividends to the redemption date.
Each Preferred Security will represent a preferred undivided beneficial interest
in the assets of the Trust. The Company will, directly or indirectly, own all
the common securities (the 'Common Securities' and, together with the Preferred
Securities, the 'Trust Securities') representing undivided beneficial interests
in the assets of the Trust. The Trust exists for the sole purpose of issuing the
Preferred Securities and Common Securities and investing the proceeds thereof in
the % Subordinated Debt Securities due , 2026 (the
'Subordinated Debt Securities') of the Company. Upon an event of default under
the Declaration (as defined herein), the holders of Preferred Securities will
have a preference over the holders of the Common Securities with respect to
payments in respect of distributions and payments upon redemption, liquidation
or otherwise. The payment of distributions out of money held by the Trust, and
payments upon redemption of the Preferred Securities or liquidation of the
Trust, as described below, are guaranteed by the Company (the 'Guarantee') to
the extent described under 'Description of the Guarantee.' The obligations of
the Company under the Guarantee will be subordinate and junior in right of
payment to all other liabilities of the Company and pari passu with the most
senior preferred stock issued from time to time by the Company. The obligations
of the Company under the Subordinated Debt Securities are subordinate and junior
in right of payment to all present and future Senior Indebtedness (as defined
herein) of the Company, which aggregated approximately $ billion
at March 31, 1996, and rank pari passu with the Company's other general
unsecured obligations.
The distribution rate and the payment dates for the Preferred Securities will
correspond to the interest rate and the payment dates on the Subordinated Debt
Securities, which will be the sole assets of the Trust. As a result, if
principal or interest is not paid on the Subordinated Debt Securities, no
amounts will be paid on the Preferred Securities. If the Company does not make
principal or interest payments on the Subordinated Debt Securities, the Trust
will not have sufficient funds to make distributions on the Preferred
Securities, in which event the Guarantee will not apply to such distributions
until the Trust has sufficient funds available therefor.
The Subordinated Debt Securities will be redeemable at the option of the
Company, in whole (but not in part), on or after , 2001 on any
Payment Date; provided, however, that after the settlement date for the Purchase
Contracts, the right of the Company to redeem any Subordinated Debt Securities
that remain outstanding will be postponed or suspended until the fifth
anniversary of such date. If the Company redeems the Subordinated Debt
Securities, the Trust must redeem the Trust
2
<PAGE>
Securities at the Stated Amount thereof plus any accrued and unpaid
distributions thereon to the date of redemption (subject to the right of holders
of record on the relevant record date to receive distributions due on a Payment
Date) (the 'Redemption Price') and any outstanding Purchase Contracts will
terminate. Any Preferred Securities not previously redeemed will be redeemed
upon maturity of the Subordinated Debt Securities. See 'Description of the
Preferred Securities--Mandatory Redemption.' In addition, upon the occurrence of
a Tax Event (as defined herein) or Investment Company Event (as defined herein),
unless the Subordinated Debt Securities are redeemed in the limited
circumstances described herein, the Trust will be dissolved with the result that
the Subordinated Debt Securities will be distributed to the holders of the Trust
Securities, on a pro rata basis, in lieu of any cash distribution. In certain
circumstances in the case of a Tax Event, the Company will have the right to
redeem the Subordinated Debt Securities, which would result in the redemption by
the Trust of the Trust Securities in the same amount on a pro rata basis and the
termination of any outstanding Purchase Contracts. See 'Description of the
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution.'
In the event of the liquidation of the Trust, either (i) the holders of the
Preferred Securities will be entitled to receive for each Preferred Security the
Stated Amount plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment and any outstanding Purchase Contracts will
terminate or (ii) the Subordinated Debt Securities will be distributed to the
holders of the Preferred Securities. See 'Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution.'
In the event the Subordinated Debt Securities are distributed to the holders of
the Preferred Securities, a Unit will thereafter consist of a Subordinated Debt
Security and a related Purchase Contract and a Unitholder may cause such
Subordinated Debt Security to be redeemed and the proceeds thereof to be used to
pay the purchase price of a Depositary Share under the Purchase Contract.
The Preferred Securities initially will be pledged with the Collateral Agent (as
defined herein) to secure the obligations of Unitholders to purchase the
Depositary Shares under the Purchase Contracts. A Preferred Security may be
separated from the related Purchase Contract at the option of a Unitholder prior
to settlement of the Purchase Contract by the delivery of Eligible Collateral
(as defined herein) having an aggregate principal amount equal to the Stated
Amount of such Preferred Security to the Collateral Agent. See 'Description of
the Units--Separation of Preferred Security from the related Purchase Contract.'
The Eligible Collateral will be pledged with the Collateral Agent as substitute
collateral to secure such Unitholder's obligation under the separated Purchase
Contract. Upon separation of the Preferred Security from a Unit, the Unit will
cease to be outstanding and the Preferred Security will be released to the
holder of the separated Purchase Contract (Unitholders and holders of separated
Purchase Contracts are, collectively, the 'Holders'). Thereafter, the separated
Purchase Contract will be nontransferable without the prior written consent of
the Company. The Collateral Agent will pay directly to Holders of separated
Purchase Contracts any distributions received on the Eligible Collateral, and if
the principal amount of the Holder's Eligible Collateral exceeds the required
principal amount of Eligible Collateral at maturity, such excess amount will be
released to the Holder. See 'Description of the Units--Reinvestment of Eligible
Collateral' and '--Distributions on Collateral.' Holders of separated Purchase
Contracts may at any time on or prior to the 32nd day immediately preceding the
Purchase Date reestablish a transferable Unit consisting of a Preferred Security
and a related Purchase Contract by delivering a Preferred Security to the
Collateral Agent in exchange for the Eligible Collateral.
The Company may, at its option, accelerate, in whole (but not in part), the
settlement of the Purchase Contracts to any Payment Date. See 'Description of
the Purchase Contracts--Acceleration of Purchase.' A Unitholder may settle a
Purchase Contract by instructing the Collateral Agent to redeem the related
Preferred Security and apply $25 of the proceeds therefrom in satisfaction of
the Purchase Contract (a 'Collateral Settlement') or by delivering $25 in cash
to the Collateral Agent (a 'Cash Settlement'), in each case on the Business Day
immediately prior to the settlement date for the Purchase Contract, provided
that failure to provide instructions or deliver cash will be deemed to be an
3
<PAGE>
election to effect a Collateral Settlement. To the extent a Unitholder effects a
Cash Settlement, the related Preferred Security will be released to the
Unitholder. A Holder of a separated Purchase Contract will be required to settle
such Purchase Contract from the proceeds of the related Eligible Collateral. See
'Description of the Units--Description of the Purchase Contract--Payment of
Purchase Price; Delivery of Depositary Shares.'
Holders of Preferred Securities that have been separated from Purchase Contracts
will have the right to require the Trust to redeem such Preferred Securities on
the Business Day immediately prior to the settlement date for the Purchase
Contracts.
Holders of Preferred Securities that remain outstanding after an accelerated
settlement date for the Purchase Contracts will have the right to require the
Trust to redeem such Preferred Securities on the fifth anniversary of such date.
See 'Description of the Units--Description of the Purchase Contracts--Payment
of Purchase Price; Delivery of Depositary Shares.'
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE UNITS OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at Seven World Trade Center, 13th Floor, New York, New York
10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained upon written request
addressed to the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy
statements and other information concerning the Company may be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005 and at the offices of the American Stock Exchange, 86 Trinity Place,
New York, New York 10006.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
'Registration Statement') under the Securities Act, relating to the Securities.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement and to the exhibits thereto.
Statements contained herein concerning the provisions of certain documents are
not necessarily complete, and in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission pursuant
to Section 13 of the Exchange Act (File No. 1-4346), are incorporated herein by
reference: (i) the Annual Report on Form 10-K for the year ended December 31,
1995 (the '1995 10-K'); and (ii) the Current Reports on Form 8-K dated January
23, 1996, February 1, 1996, February 12, 1996, and April 23, 1996.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing such reports and documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of any such person, a copy of any or all of the documents
incorporated herein by reference, except the exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents).
Written requests for such copies should be directed to the Corporate Secretary,
Salomon Inc, Seven World Trade Center, New York, New York 10048. Telephone
requests for such copies should be directed to the Corporate Secretary at (212)
783-7000.
5
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus. Investors should carefully
consider the information set forth under the heading 'Risk Factors.'
THE OFFERING
<TABLE>
<S> <C>
Units Offered............................. Units.
Each Unit will consist of (i) a Preferred Security and (ii) a
Purchase Contract requiring the purchase on , 2021 (or
earlier as described below) by the holder thereof of one Depositary
Share representing a one-twentieth interest in a share of Series F
Preferred Stock of the Company at a purchase price of $25 per
Depositary Share. A Unitholder may cause a Preferred Security to be
redeemed and the proceeds thereof to be used to pay the purchase
price of a Depositary Share under the Purchase Contract.
Distributions and Contract Fees........... Each Unit will entitle the holder thereof to receive % of the
Stated Amount per annum (equivalent to $ per annum),
consisting of (i) % per annum of the Stated Amount in
distributions on the related Preferred Security and (ii) % per
annum of the Stated Amount in Contract Fees. Distributions on the
Preferred Securities and Contract Fees will accrue from the date of
original issuance of the Units and will be payable quarterly in
arrears on each , , and (each, a
'Payment Date'), commencing , 1996.
Depositary Shares......................... Each Depositary Share will entitle the holder thereof to all
proportional rights and preferences of the Series F Preferred Stock
(including dividend, voting, redemption and liquidation rights). The
proportionate liquidation preference of each Depositary Share will be
$25. Dividends on the Series F Preferred Stock will be cumulative
from the date of issue and will be payable quarterly on each Payment
Date at the rate of % per annum (equivalent to $ per annum
per Depositary Share). The Series F Preferred Stock will be
redeemable at the option of the Company at any time on or after the
later of , 2001 or the date of issue, in whole or in part,
at a redemption price of $500 per share (equivalent to $25 per
Depositary Share), plus accrued and unpaid dividends to the
redemption date.
Preferred Securities...................... Each Preferred Security will represent a preferred undivided
beneficial interest in the assets of the Trust. The Trust exists for
the sole purpose of issuing the Preferred Securities and the Common
Securities (which will be owned directly or indirectly by the
Company) and investing the proceeds thereof in the Subordinated Debt
Securities of the Company. The distribution rate and the payment
dates for the Preferred Securities will correspond to the interest
rate and the payment dates on the Subordinated Debt Securities, which
will be the sole assets of the Trust. As a result, if principal or
interest is not paid on the
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Subordinated Debt Securities, no amounts will be paid on the
Preferred Securities.
Redemption of Preferred Securities;
Termination of Purchase
Contracts; Tax Event or Investment
Company Event........................... Upon the optional redemption by the Company of the Subordinated Debt
Securities, the Preferred Securities will be redeemed at the
Redemption Price and any outstanding Purchase Contracts will
terminate. The Subordinated Debt Securities will be redeemable at the
option of the Company, in whole (but not in part), on and after
, 2001 on any Payment Date; provided, however, that after
the settlement date for the Purchase Contracts, the right of the
Company to redeem any Subordinated Debt Securities that remain
outstanding will be postponed or suspended until the fifth
anniversary of such date. Any Preferred Securities not previously
redeemed will be redeemed on maturity of the Subordinated Debt
Securities. In addition, upon the occurrence of a Tax Event or
Investment Company Event, unless the Subordinated Debt Securities are
redeemed in the limited circumstances described herein, the Trust
will be dissolved with the result that the Subordinated Debt
Securities will be distributed to the holders of the Trust
Securities, on a pro rata basis, in lieu of any cash distribution. In
certain circumstances in the case of a Tax Event, the Company will
have the right to redeem the Subordinated Debt Securities, which
would result in the redemption by the Trust of the Trust Securities
in the same amount on a pro rata basis and the termination of any
outstanding Purchase Contracts.
Liquidation............................... In the event of the liquidation of the Trust, either (i) the holders
of the Preferred Securities will be entitled to receive for each
Preferred Security the Stated Amount plus accrued and unpaid
distributions thereon (including interest thereon) to the date of
payment and any outstanding Purchase Contracts will terminate or (ii)
the Subordinated Debt Securities will be distributed to the holders
of the Preferred Securities.
Distribution of Subordinated Debt
Securities.............................. In the event the Subordinated Debt Securities are distributed to the
holders of the Preferred Securities, a Unit will thereafter consist
of a Subordinated Debt Security and a related Purchase Contract and a
Unitholder may cause such Subordinated Debt Security to be redeemed
and the proceeds thereof to be used to pay the purchase price of a
Depositary Share under the Purchase Contract.
Guarantee................................. The payment of distributions out of money held by the Trust, and
payments upon redemption of the Preferred Securities or liquidation
of the Trust, are guaranteed by the Company to the extent described
under 'Description of the Guarantee.' The Guarantee does not cover
payment of distributions when the Trust does not have sufficient
available funds to pay such distributions.
</TABLE>
7
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<TABLE>
<S> <C>
Pledge of Preferred Securities or Eligible
Collateral.............................. The Preferred Securities initially will be pledged with , as
Collateral Agent for the Company (the 'Collateral Agent'), to secure
the obligation of Unitholders to purchase the Depositary Shares under
the Purchase Contracts. A Preferred Security may be separated from
the related Purchase Contract prior to the settlement of the Purchase
Contract at the option of the Unitholder by the delivery of Eligible
Collateral (as defined herein) having an aggregate principal amount
equal to the Stated Amount of such Preferred Security to the
Collateral Agent. The Eligible Collateral will be pledged with the
Collateral Agent as substitute collateral to secure such Unitholder's
obligation under the separated Purchase Contract. Upon separation of
the Preferred Security from a Unit, the Unit will cease to be
outstanding and the Preferred Security will be released to the holder
of the separated Purchase Contract. Thereafter the separated Purchase
Contract will be nontransferable without the prior written consent of
the Company. The Collateral Agent will pay directly to holders of
separated Purchase Contracts any distributions received on the
Eligible Collateral, and if at any time the principal amount at
maturity of such holder's Eligible Collateral exceeds the required
principal amount of Eligible Collateral, such excess amount will be
released to such holder. Holders of separated Purchase Contracts may
reestablish, subject to certain restrictions, a transferable Unit
consisting of a Preferred Security and a related Purchase Contract by
delivering a Preferred Security to the Collateral Agent in exchange
for the Eligible Collateral. See 'Description of the Units--Separation
of Preferred Security from the related Purchase Contract.'
Acceleration of Purchase.................. The Company may, at its option, on not less than 45 nor more than 60
days' notice, accelerate, in whole (but not in part), the settlement
of the Purchase Contracts to any Payment Date, subject to cancellation
or rescission in certain circumstances. See 'Description of the
Units--Description of the Purchase Contracts--Acceleration of Purchase.'
Settlement of Purchase Contracts; Certain
Rights of Holders of Preferred
Securities.............................. A Unitholder may settle a Purchase Contract by instructing the
Collateral Agent to redeem the related Preferred Security and apply
$25 of the proceeds therefrom in satisfaction of the Purchase
Contract (a 'Collateral Settlement') or by delivering $25 in cash to
the Collateral Agent (a 'Cash Settlement'), provided that failure to
provide instructions or deliver cash will be deemed to be an election
to effect a Collateral Settlement. To the extent a Unitholder effects
a Cash Settlement, the related Preferred Security will be released to
the Unitholder. A Holder of a separated Purchase Contract will be
required to settle the Purchase Contract from the proceeds of the
related Eligible Collateral. See 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase
Price; Delivery of Depositary Shares.'
</TABLE>
8
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<TABLE>
<S> <C>
Holders of Preferred Securities that have been separated from
Purchase Contracts will have the right to require the Trust to redeem
such Preferred Securities on the Business Day immediately prior to
the settlement date for the Purchase Contracts.
Holders of Preferred Securities that remain outstanding after an
accelerated settlement date for the Purchase Contracts will have the
right to require the Trust to redeem such Preferred Securities on the
fifth anniversary of such date. See 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase
Price; Delivery of Depositary Shares.'
Listing................................... Application will be made to list the Units on the NYSE under the
symbol ' .' Prior to this offering there has been no public
market for the Units. In the event the Preferred Security is
separated from the related Purchase Contract, the resulting separated
Purchase Contract will not be tradable on the NYSE. The Preferred
Securities will not be listed or traded on any securities exchange,
and unless and until a significant number of Preferred Securities are
separated from the related Purchase Contracts, there will be no
market for the Preferred Securities. Application will be made to list
the Depositary Shares on the NYSE. The Series F Preferred Stock will
not be listed and the Company does not expect that there will be any
trading market for the Series F Preferred Stock except as represented
by the Depositary Shares.
Forms of Securities....................... Units and Preferred Securities will be issued in book-entry form and
represented by a global certificate or certificates registered in the
name of Cede & Co., as nominee for The Depository Trust Company
('DTC'). Separated Purchase Contracts secured by Eligible Collateral
will be represented by a certificate issued by the Unit Agent (as
defined herein) that will be in definitive form only. It is expected
that Depositary Receipts (as defined herein) evidencing the
Depositary Shares will be issued in book-entry form and represented
by a global certificate or certificates registered in the name of
Cede & Co., as nominee for DTC.
Unit Agreement; Unit Agent................ The Units will be issued under the Unit Agreement to be dated as of
, 1996 (the 'Unit Agreement'), between the Company and
Chemical Bank, a New York banking corporation, as fiscal and paying
agent (together with any successor thereto in such capacity, the
'Unit Agent'). The Unit Agreement will not be qualified as an
indenture under the Trust Indenture Act (as defined herein), and the
Unit Agent will not be required to qualify as a trustee thereunder.
</TABLE>
9
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RISK FACTORS
Prospective purchasers of the Units should carefully review the information
contained elsewhere in this Prospectus and should particularly consider the
following matters:
TERMS OF THE UNITS
Pursuant to the Purchase Contract, the Company may require each Holder to
purchase a Depositary Share on any Payment Date. Accordingly, each Unitholder
must be prepared to purchase the Depositary Share for cash or instruct the
Collateral Agent to redeem such Unitholder's related Preferred Security. A
failure to deliver cash or provide instructions to the Collateral Agent will be
deemed to be an election to effect a Collateral Settlement by the Unitholder. A
Holder of a separated Purchase Contract will be required to purchase the
Depositary Share from the proceeds of the related Eligible Collateral.
Prospective purchasers should also consider the fact that the dividend rate of
the Series F Preferred Stock will not be adjusted to reflect subsequent changes
in interest rates or the financial condition of the Company. Accordingly, the
market value of a Depositary Share on a Purchase Date may be more or less than
$25, the purchase price of a Depositary Share. Moreover, prospective purchasers
should consider that upon a Collateral Settlement of a Purchase Contract, a
Unitholder will effectively exchange the Preferred Security of the Trust, whose
assets consist of the Subordinated Debt Securities, for a Depositary Share
representing a one-twentieth interest in a share of Series F Preferred Stock,
which will be subordinated in right of payment to all existing and future
indebtedness of the Company.
The obligation of a Holder under a Purchase Contract to purchase a
Depositary Share will not be terminated or otherwise affected by the occurrence
and continuance of an Event of Default (as defined herein) with respect to
Subordinated Debt Securities or a Declaration Event of Default (as defined
herein) with respect to the Preferred Securities. The Purchase Contracts will
terminate, however, if the Company redeems the Subordinated Debt Securities or,
in certain circumstances, the Preferred Securities are not redeemed at the
Stated Purchase Date (as defined herein). See 'Description of the
Units--Description of the Purchase Contracts--Termination.'
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION; LIQUIDATION
Upon the occurrence of a Tax Event or an Investment Company Event, the
Trust will be dissolved (except in the limited circumstances described in the
following sentence) with the result that the Subordinated Debt Securities will
be distributed to the holders of Preferred Securities. In certain circumstances
involving a Tax Event, the Company will have the right to redeem the
Subordinated Debt Securities, in whole (but not in part), in which event the
Trust will redeem Trust Securities with an aggregate Stated Amount equal to the
aggregate principal amount of the Subordinated Debt Securities so redeemed on a
pro rata basis. In the event the Company redeems the Subordinated Debt
Securities, any outstanding Purchase Contracts will terminate. See 'Description
of the Preferred Securities--Optional Redemption by the Company,' 'Description
of the Preferred Securities----Tax Event or Investment Company Event Redemption
or Distribution' and 'Description of the Subordinated Debt Securities--Optional
Redemption by the Company.'
In the event of any liquidation of the Trust, either (i) holders of the
Preferred Securities will be entitled to receive the Stated Amount per Preferred
Security plus an amount equal to any accrued and unpaid distributions thereon to
the date of payment and any outstanding Purchase Contracts will terminate or
(ii) the Subordinated Debt Securities will be distributed to such holders.
In the event the Subordinated Debt Securities are distributed to the
holders of the Preferred Securities upon the occurrence of an Investment Company
Event or, in certain circumstances, a Tax Event or a liquidation of the Trust, a
Unit will thereafter consist of a Subordinated Debt Security and a related
Purchase Contract. See 'Description of the Units--Other Pledge and Payment
Provisions.'
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<PAGE>
OBLIGATIONS OF THE UNIT AGENT
Although the Preferred Securities constituting a part of the Units will be
issued pursuant to a Declaration qualified under the Trust Indenture Act of
1939, as amended (the 'Trust Indenture Act'), the Unit Agreement will not be
qualified as an indenture under the Trust Indenture Act. Accordingly, Holders
will not have the benefit of the protection of the Trust Indenture Act insofar
as it pertains to the Preferred Securities. Under the terms of the Unit
Agreement, the Unit Agent in its capacity as such will have only limited
obligations to the Holders and will not undertake any fiduciary duty to the
Holders. See 'Description of the Units' and 'Description of the Preferred
Securities.'
ABSENCE OF TRADING MARKET; SEPARATION OF UNITS
There is no existing trading market for the Units and there can be no
assurance as to the liquidity of any such market that may develop, the ability
of the Unitholders to sell such securities, the price at which the Unitholders
would be able to sell such securities or whether a trading market, if it
develops, will continue. If such a market were to exist, the Units could trade
at prices higher or lower than their initial offering amount, depending on many
factors, including prevailing interest rates, the market for similar securities
and the operating results of the Company. Unless or until a significant number
of Preferred Securities are separated from the Units there will be no market for
the Preferred Securities. The Preferred Securities will not be listed on any
securities exchange, and, regardless of a listing or lack thereof, the same
considerations referred to above would be equally applicable to the Preferred
Securities. In addition, upon such separation, the separated Purchase Contract
will be nontransferable without the prior written consent of the Company.
Holders should carefully consider the likely illiquidity of the Preferred
Securities and Purchase Contracts prior to making an election to separate. See
'Description of the Units.'
Application will be made to list the Depositary Shares on the NYSE. The
Series F Preferred Stock will not be listed on an exchange and the Company does
not expect that there will be any trading market for the Series F Preferred
Stock except as represented by the Depositary Shares.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and, except
for the rights of such holders to appoint a Special Regular Trustee (as defined
herein) upon the occurrence of certain events described herein, will not be
entitled to vote to appoint, remove or replace, or to increase or decrease the
number of, Trustees, which voting rights are vested exclusively in the Company
as holder of the Common Securities. See 'Description of the Preferred
Securities--Voting Rights.'
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. will act as the Guarantee Trustee under the Guarantee for the
purposes of compliance with the Trust Indenture Act. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the related Preferred
Securities.
The Guarantee guarantees on a subordinated basis to the holders of the
Preferred Securities the payment (not the collection) of (i) any accrued and
unpaid distributions that are required to be paid on the Preferred Securities to
the extent of funds of the Trust available therefor, (ii) the amount payable
upon redemption of the Preferred Securities, out of funds of the Trust available
therefor with respect to any Preferred Securities called for redemption by the
Trust and (iii) upon a Liquidation (as defined herein) of the Trust, the lesser
of (a) the aggregate of the Stated Amount and all accrued and unpaid
distributions on the Preferred Securities to the date of payment, to the extent
of funds of the Trust available therefor, and (b) the amount of assets of the
Trust remaining available for distribution to holders of Preferred Securities.
The Company's obligation to make a Guarantee Payment (as defined
11
<PAGE>
herein) may be satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by causing the Trust to pay
such amounts to such holders.
If the Company were to default on its obligations under the Subordinated
Debt Securities, the Trust would lack available funds for the payment of
distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and in such event holders of the Preferred Securities would not be
able to rely upon the Guarantee for payment of such amounts. Instead, holders of
the Preferred Securities would be required either (i) to rely on the enforcement
of their rights against the Company pursuant to the terms of the Subordinated
Debt Securities or (ii) to enforce, to the fullest extent permitted by law, the
Property Trustee's rights against the Company. See 'Description of the
Guarantee' and 'Description of the Subordinated Debt Securities.'
NON-U.S. HOLDERS
A Non-U.S. Holder (as defined herein) will be subject to U.S. withholding
tax with respect to any Contract Fee payments, as well as dividends on the
Depositary Shares, at a rate of 30% unless an applicable income tax treaty
provides a lower rate. Individual Non-U.S. Holders of Units, Purchase Contracts
or Depositary Shares would also be potentially subject to U.S. estate tax. See
'United States Federal Income Taxation--Non-U.S. Holders.'
SALOMON INC
Salomon Inc conducts global investment banking, global securities and
commodities trading, and U.S. oil refining and gathering activities. Investment
banking activities are conducted by Salomon Brothers Holding Company Inc and its
subsidiaries ('Salomon Brothers'), including Salomon Brothers Inc. Salomon
Brothers provides capital raising, advisory, trading and risk management
services to its customers, and executes proprietary trading strategies on its
own behalf. Salomon Inc's commodities trading activities are conducted by the
Company's wholly-owned subsidiary, Phibro Inc., and its subsidiaries. Oil
refining and gathering activities are conducted by Basis Petroleum, Inc. At
March 31, 1996, the Company employed people.
The Company's principal executive offices are located at Seven World Trade
Center, New York, New York 10048 (telephone (212) 783-7000). Its registered
office in Delaware is c/o Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801.
RECENT DEVELOPMENTS
On April 23, 1996, the Company announced first quarter 1996 net income of
$276 million, compared to net income of $81 million in the same period a year
ago. Fully diluted earnings per share were $2.21 and $0.59 for the three month
periods ended March 31, 1996 and 1995, respectively. Book value per common share
was $37.98 at March 31, 1996.
USE OF PROCEEDS
The proceeds to be received by the Company from the sale of the Securities
will be used for general corporate purposes, principally to fund the business of
its operating units and to fund investments in, or extensions of credit to, its
subsidiaries and to lengthen the average maturity of liabilities, which may
include the reduction of short-term liabilities or the refunding of maturing
indebtedness.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratios of earnings to fixed
charges and earnings to fixed charges and preferred dividends for each of the
years 1995, 1994, 1993, 1992 and 1991.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings of Fixed Charges........................................ 1.12 0.83(1) 1.32 1.25 1.16
Ratio of Earnings to Fixed Charges and Preferred Dividends................ 1.10 0.81(1) 1.30 1.21 1.14
</TABLE>
- ------------------
(1) For the year ended December 31, 1994, earnings as defined were inadequate to
cover fixed charges, including preferred dividends. The amount by which
fixed charges exceeded earnings as defined for the year ended December 31,
1994 was $834 million. The amount by which fixed charges, including
preferred dividends, exceeded earnings as defined for the year ended
December 31, 1994 was $963 million.
Such ratios were calculated by dividing fixed charges and tax equivalent
preferred dividends into the sum of earnings before taxes and fixed charges.
Fixed charges consist largely of interest expense, including capitalized
interest, and a portion of rental expense representative of the interest factor.
Tax equivalent preferred dividends represent the pretax earnings necessary to
cover preferred stock dividend requirements, assuming such earnings are taxed at
the Company's consolidated effective income tax rate.
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, executed by the Company, as sponsor (the
'Sponsor'), and the trustees of the Trust (the 'Company Trustees') and (ii) the
filing of a certificate of trust with the Secretary of State of the State of
Delaware. Such declaration will be amended and restated in its entirety (as so
amended and restated, the 'Declaration') upon issuance of the Preferred
Securities. The Declaration will be qualified under the Trust Indenture Act.
Upon issuance of the Preferred Securities, the purchasers thereof will own all
of the Preferred Securities. The Company will directly or indirectly acquire
Common Securities in an aggregate liquidation amount equal to 3% of the total
capital of the Trust. The Trust exists for the exclusive purposes of (i) issuing
the Trust Securities representing undivided beneficial interests in the assets
of the Trust, (ii) investing the gross proceeds of the Trust Securities in the
Subordinated Debt Securities and (iii) engaging in only those other activities
necessary or incidental thereto. The Trust has a term of 35 years, but may
terminate earlier as provided in the Declaration.
Pursuant to the Declaration, the number of the Company Trustees will
initially be five. Three of the Company Trustees will be persons who are
employees or officers of the Company or affiliates of the Company (the 'Regular
Trustees'). The fourth Company Trustee will be a financial institution that
maintains its principal place of business in the state of Delaware and is
unaffiliated with the Company (the 'Delaware Trustee'). Initially Chemical Bank
Delaware, a Delaware banking corporation, will be the Delaware Trustee. The
fifth Company Trustee will be a financial institution that is unaffiliated with
the Company and will serve as property trustee under the Declaration and as
indenture trustee for the purposes of the Trust Indenture Act (the 'Property
Trustee'). Initially, Chemical Bank, a New York banking corporation, will be the
Property Trustee until removed or replaced by the holder of the Common
Securities and will act as indenture trustee under the Guarantee (the 'Guarantee
Trustee'). See 'Description of the Guarantee.' In addition, the Property Trustee
will act initially as the Unit Agent under the Unit Agreement. See 'Description
of the Units--General.'
The Property Trustee will hold title to the Subordinated Debt Securities
for the benefit of the holders of the Trust Securities and the Property Trustee
will have the power to exercise all rights, powers, and privileges under the
Indenture (as defined herein) as the holder of the Subordinated Debt Securities.
In addition, the Property Trustee will maintain exclusive control of a
segregated non interest-bearing bank
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account (the 'Property Account') to hold all payments made in respect of the
Subordinated Debt Securities for the benefit of the holders of the Trust
Securities. The Property Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the Preferred Securities.
The Company, as the direct or indirect holder of all the Common Securities, will
have the right to appoint, remove or replace any Company Trustee and to increase
or decrease the number of Company Trustees; provided that, (i) the number of
Company Trustees shall be at least three and (ii) at least two shall be Regular
Trustees. The Company will pay all fees and expenses related to the Trust, the
offering of the Trust Securities and the issuance of the Subordinated Debt
Securities. See 'Description of the Subordinated Debt
Securities--Miscellaneous.'
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the 'Trust Act') and the Trust
Indenture Act. See 'Description of the Preferred Securities.'
DESCRIPTION OF THE UNITS
The description of certain provisions of the Unit Agreement, the Pledge
Agreement, the Units and the Purchase Contracts does not purport to be complete
and is qualified in its entirety by reference to the Unit Agreement, the Pledge
Agreement, the Units and the Purchase Contracts, forms of which have been filed
with the Commission as exhibits to the Registration Statement of which this
Prospectus is a part.
GENERAL
Each Unit will consist of (i) a Preferred Security of the Trust and (ii) a
related Purchase Contract requiring the purchase on , 2021 (or
earlier as described below) of one Depositary Share representing a one-twentieth
interest in a share of Series F Preferred Stock of the Company at a purchase
price of $25 per Depositary Share. A Unitholder may cause a Preferred Security
to be redeemed and the proceeds thereof to be used to pay the purchase price of
a Depositary Share under the Purchase Contract.
Each Unit will entitle the holder thereof to receive % of the Stated
Amount per annum (equivalent to $ per annum), consisting of (i) %
per annum of the Stated Amount in distributions on the related Preferred
Security and (ii) % per annum of the Stated Amount in fees payable in respect
of the related Purchase Contract ('Contract Fees'). Distributions on the
Preferred Securities and Contract Fees will accrue from the date of original
issuance of the Units and will be payable quarterly in arrears on each Payment
Date, commencing , 1996. In addition, each Unit will entitle the
holder thereof to all other proportional rights and preferences of the Preferred
Securities (including voting, redemption and liquidation rights).
Each Depositary Share will entitle the holder thereof to all proportional
rights and preferences of the Series F Preferred Stock (including dividend,
voting, redemption and liquidation rights). The proportionate liquidation
preference of each Depositary Share will be $25. See 'Description of the
Depositary Shares.' Dividends on the Series F Preferred Stock will be cumulative
from the date of issue and will be payable quarterly on each Payment Date at the
rate of % per annum (equivalent to $ per annum per Depositary
Share). See 'Description of the Depositary Shares--Dividends and Other
Distributions.' The Series F Preferred Stock will be redeemable at the option of
the Company at any time on or after the later of , 2001 or the date
of issue, in whole or in part, at a redemption price of $500 per share
(equivalent to $25 per Depositary Share), plus accrued and unpaid dividends to
the redemption date.
Each Preferred Security will represent a preferred undivided beneficial
interest in the assets of the Trust. The Trust exists for the sole purpose of
issuing the Preferred Securities and Common Securities and investing the
proceeds thereof in the Subordinated Debt Securities of the Company. The
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distribution rate and the payment dates for the Preferred Securities will
correspond to the interest rate and the payment dates on the Subordinated Debt
Securities, which will be the sole assets of the Trust. As a result, if
principal or interest is not paid on the Subordinated Debt Securities, no
amounts will be paid on the Preferred Securities. See 'Description of the
Preferred Securities' and 'Description of the Subordinated Debt Securities.'
The Subordinated Debt Securities will be redeemable at the option of the
Company, in whole (but not in part), on or after , 2001 on any
Payment Date; provided, however, that after the settlement date for the Purchase
Contracts, the right of the Company to redeem any Subordinated Debt Securities
that remain outstanding will be postponed or suspended until the fifth
anniversary of such date. If the Company redeems the Subordinated Debt
Securities, the Trust must redeem the Trust Securities at the Redemption Price
and any outstanding Purchase Contracts will terminate. Any Preferred Securities
not previously redeemed will be redeemed upon maturity of the Subordinated Debt
Securities. See 'Description of the Preferred Securities--Mandatory Redemption.'
In addition, upon the occurrence of a Tax Event or Investment Company Event (as
defined herein), unless the Subordinated Debt Securities are redeemed in the
limited circumstances described herein, the Trust will be dissolved with the
result that the Subordinated Debt Securities will be distributed to the holders
of the Trust Securities, on a pro rata basis, in lieu of any cash distribution.
In certain circumstances in the case of a Tax Event, the Company will have the
right to redeem the Subordinated Debt Securities, which would result in the
redemption by the Trust of the Trust Securities in the same amount on a pro rata
basis and the termination of any outstanding Purchase Contracts. See
'Description of the Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution.'
In the event of the liquidation of the Trust, either (i) the holders of the
Preferred Securities will be entitled to receive for each Preferred Security the
Stated Amount plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment and any outstanding Purchase Contracts will
terminate or (ii) the Subordinated Debt Securities will be distributed to the
holders of the Preferred Securities. See 'Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution.'
In the event the Subordinated Debt Securities are distributed to the
holders of the Preferred Securities, a Unit will thereafter consist of a
Subordinated Debt Security and a related Purchase Contract and a Unitholder may
cause such Subordinated Debt Security to be redeemed and the proceeds thereof to
be used to pay the purchase price of a Depositary Share under the Purchase
Contract.
The payment of distributions out of money held by the Trust, and payments
upon redemption of the Preferred Securities or liquidation of the Trust, are
guaranteed by the Company to the extent described under 'Description of the
Guarantee.' The Guarantee does not cover payment of distributions when the Trust
does not have sufficient available funds to pay such distributions.
The Preferred Securities initially will be pledged with the Collateral
Agent for the Company to secure the obligation of Unitholders to purchase the
Depositary Shares under the Purchase Contracts. A Preferred Security may be
separated from the related Purchase Contract prior to the settlement of the
Purchase Contract at the option of a Unitholder by the delivery of Eligible
Collateral having an aggregate principal amount equal to the Stated Amount of
such Preferred Security to the Collateral Agent. See '--Separation of Preferred
Security from the related Purchase Contract.' The Eligible Collateral will be
pledged with the Collateral Agent as substitute collateral to secure such
Unitholder's obligation under the separated Purchase Contract (pledged Preferred
Securities and Eligible Collateral are, collectively, the 'Collateral'). Upon
separation of the Preferred Security from a Unit, the Unit will cease to be
outstanding and the Preferred Security will be released to the Holder of the
separated Purchase Contract. Thereafter, the separated Purchase Contract will be
nontransferable without the prior written consent of the Company. The Collateral
Agent will pay directly to Holders of separated Purchase Contracts any
distributions received on the Eligible Collateral, and if at any time the
principal amount at maturity of the Holder's Eligible Collateral exceeds the
required principal amount of Eligible Collateral, such excess amount will be
released to the Holder. See '--Reinvestment of Eligible
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<PAGE>
Collateral' and '--Distributions on Collateral.' Holders of separated Purchase
Contracts may at any time on or prior to the 32nd day immediately preceding the
Purchase Date reestablish a transferable Unit consisting of a Preferred Security
and a related Purchase Contract by delivering a Preferred Security to the
Collateral Agent in exchange for the Eligible Collateral.
The Company may, at its option, accelerate, in whole (but not in part), the
settlement of the Purchase Contracts to any Payment Date. See '--Description of
the Purchase Contracts--Acceleration of Purchase.'
A Unitholder may settle a Purchase Contract by instructing the Collateral
Agent to redeem the related Preferred Security on the Business Day immediately
prior to the settlement date and apply $25 of the proceeds therefrom in
satisfaction of the Purchase Contract (a 'Collateral Settlement') or by
delivering $25 in cash to the Collateral Agent (a 'Cash Settlement'), provided
that failure to provide instructions or deliver cash will be deemed to be an
election to effect a Collateral Settlement. To the extent a Unitholder effects a
Cash Settlement, the related Preferred Security will be released to the
Unitholder. A Holder of a separated Purchase Contract will be required to settle
the Purchase Contract from the proceeds of the related Eligible Collateral. See
'--Description of the Purchase Contracts--Payment of Purchase Price; Delivery
of Depositary Shares.'
Holders of Preferred Securities that have been separated from Purchase
Contracts will have the right to require the Trust to redeem such Preferred
Securities on the Business Day immediately prior to the settlement date for the
Purchase Contracts.
Holders of Preferred Securities that remain outstanding after an
accelerated settlement date for the Purchase Contracts will have the right to
require the Trust to redeem such Preferred Securities on the fifth anniversary
of such date. See 'Description of the Units--Description of the Purchase
Contracts--Payment of Purchase Price; Delivery of Depositary Shares.'
Application will be made to list the Units on the NYSE under the symbol '
.' Prior to this offering there has been no public market for the
Units. In the event the Preferred Security is separated from the related
Purchase Contract, the resulting separated Purchase Contract will not be
tradable on the NYSE. The Preferred Securities will not be listed or traded on
any securities exchange, and unless and until a significant number of Preferred
Securities are separated from the related Purchase Contracts, there will be no
market for the Preferred Securities and even then there is not expected to be a
market for Preferred Securities separate from the Units. Application will be
made to list the Depositary Shares on the NYSE. The Series F Preferred Stock
will not be listed and the Company does not expect that there will be any
trading market for the Series F Preferred Stock except as represented by the
Depositary Shares.
Units and Preferred Securities will be issued in book-entry form and
represented by a global certificate or certificates registered in the name of
Cede & Co., as nominee for DTC. Separated Purchase Contracts secured by Eligible
Collateral will be represented by a certificate issued by the Unit Agent that
will be in definitive form only. See '--Separation of Preferred Security from
the related Purchase Contract' and '--Book-Entry System.' It is expected that
Depositary Receipts evidencing the Depositary Shares will be issued in
book-entry form and represented by a global certificate or certificates
registered in the name of Cede & Co. as nominee for DTC.
The Units will be issued under the Unit Agreement to be dated as of
, 1996, between the Company and the Unit Agent. The Unit Agreement
will not be qualified as an indenture under the Trust Indenture Act and the Unit
Agent will not be required to qualify as a trustee thereunder.
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DESCRIPTION OF THE PURCHASE CONTRACTS
General
Each Purchase Contract will obligate the Holder to purchase, and the
Company to sell, on , 2021 (the 'Stated Purchase Date') (or earlier
as described below), one Depositary Share evidencing ownership of a
one-twentieth interest in a share of Series F Preferred Stock, at a purchase
price of $25 per Depositary Share (the 'Purchase Price'). Prior to the purchase
of Depositary Shares pursuant to the Purchase Contracts, Holders will not be
shareholders of the Company or have any of the rights and privileges of a
shareholder. Certain rights and obligations of the Company and the Holders under
the Purchase Contracts are subject to termination in certain circumstances. See
'--Termination.' If the Stated Purchase Date is not a Business Day, such Stated
Purchase Date shall be the immediately preceding Business Day. 'Business Day'
means any day that is not a Saturday, 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 be closed.
Each Holder will, under the terms of the Unit Agreement, the Units and the
Purchase Contracts, be deemed to have irrevocably (i) agreed to be bound by the
terms of the Purchase Contracts and Pledge Agreement for so long as such Holder
remains a Holder, (ii) appointed the Unit Agent as such Holder's
attorney-in-fact to enter into and perform the Purchase Contracts and Pledge
Agreement on behalf of and in the name of such Holder and (iii) pledged the
Preferred Security or Eligible Collateral, agreed to the terms of the Pledge
Agreement and authorized the Unit Agent to enter into the Pledge Agreement on
each Holder's behalf.
Acceleration of Purchase
The Company may, at its option, in whole (but not in part), on not less
than 45 nor more than 60 days' notice, accelerate the obligation of the Holders
to purchase, and the Company to sell, on the next succeeding Payment Date (such
Payment Date, an 'Early Purchase Date' and, together with the Stated Purchase
Date, a 'Purchase Date'), one Depositary Share per Purchase Contract. Any
acceleration notice may be canceled if the Company gives written notice of such
cancellation to the Unit Agent and the Holders on or before the twentieth day
immediately prior to the applicable Early Purchase Date. In addition, in certain
circumstances, an acceleration may be rescinded. See '--Payment of Purchase
Price; Delivery of Depositary Shares.' If an Early Purchase Date is not a
Business Day, such Early Purchase Date shall be the immediately preceding
Business Day.
The cancellation or rescission of any notice of acceleration will not
prevent the Company from giving notice of an acceleration at a later date.
Contract Fees
The Company is obligated, under the terms of each Purchase Contract, to pay
Contract Fees in respect thereof equal to % per annum of the Stated Amount.
The Contract Fees will be payable quarterly on each Payment Date, commencing
, 1996, to the persons in whose names the related Units or separated
Purchase Contracts are registered at the close of business on the fifteenth day
immediately preceding such Payment Date. Contract Fees payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. If a
Payment Date falls on a day that is not a Business Day, the Contract Fee may be
paid on the next succeeding Business Day, and no additional amounts will accrue
as a result of such delayed payment, except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date. The Contract Fee with respect to any Purchase Contract will cease to be
payable in respect of any period after the Purchase Date (or in the case of a
Put Default (as defined herein) the Delayed Purchase Date (as defined herein))
or, if earlier, in respect of any period after termination of the Purchase
Contract. The failure by the Company to pay the Contract Fees on any Payment
Date will result in the termination of the Purchase Contracts if
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such failure shall continue for a period of more than 30 days following such
Payment Date without being remedied.
Payment of Purchase Price; Delivery of Depositary Shares
Under the terms of the Unit Agreement, on the Purchase Date a Unitholder
may pay for the Depositary Share to be issued under the related Purchase
Contract by effecting a Cash Settlement or a Collateral Settlement.
A Unitholder may effect a 'Cash Settlement' of a Purchase Contract by (a)
providing the Collateral Agent with notice of its election to effect a Cash
Settlement not less than 10 nor more than 30 days prior to the Purchase Date and
(b) making a payment of the Purchase Price to the Collateral Agent prior to
10:00 a.m., New York City time, on the Business Day immediately preceding the
Purchase Date in immediately available funds payable to or upon the order of the
Company. Those funds will be invested immediately in overnight Federal funds and
paid to the Company on the Purchase Date in settlement of the Purchase Contract.
Any funds received by the Collateral Agent in respect of the interest earned
from the investment in overnight Federal funds will be distributed to the Unit
Agent for payment to the Unitholder. If a Unitholder properly effects a Cash
Settlement of a Purchase Contract, the Unit with respect to such Purchase
Contract will be canceled and the related Preferred Security will be released to
the Unitholder free and clear of any security interest of the Company.
A Unitholder may effect a 'Collateral Settlement' of a Purchase Contract by
giving an instruction to the Collateral Agent not less than 10 nor more than 30
days prior to the Purchase Date to present the related Preferred Security to the
Trust for redemption on the Business Day immediately preceding the Purchase Date
at the Redemption Price and to apply $25 of the proceeds therefrom to the
Purchase Contract held by the Unitholder. On such Business Day, the Property
Trustee will, on behalf of the holders of Preferred Securities, including the
Collateral Agent and holders of separated Preferred Securities who have
delivered a redemption notice to the Trust in respect of Preferred Securities
held by them, present Subordinated Debt Securities in an aggregate principal
amount equal to the Stated Amount of such Preferred Securities to the Company
for immediate repayment on such Business Day at the Subordinated Debt Redemption
Price (as defined herein). Upon repayment of such Subordinated Debt Securities,
(a) the proceeds from such redemption will be applied to redeem the Preferred
Securities at the Redemption Price and (b) the Property Trustee will (i)
transfer to the Collateral Agent funds in an aggregate amount equal to the
Redemption Price of the Preferred Securities pledged with the Collateral Agent
and (ii) with respect to non-pledged Preferred Securities, pay immediately the
Redemption Price to the holders thereof. Any funds received by the Collateral
Agent in respect of the redemption of the pledged Preferred Securities will be
invested immediately in overnight Federal funds and paid to the Company on the
Purchase Date in settlement of the related Purchase Contracts. Any funds
received by the Collateral Agent (a) in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby or (b) in respect of the
interest earned from the investment in overnight Federal funds will be
distributed to the Unit Agent for payment to the Unitholders. In addition, if
the rate of interest per annum paid on such investment is less than % of the
Stated Amount, the Company shall make a distribution to the Unit Agent for
payment to the Unitholders of an amount per Purchase Contract equal to one day's
interest on the Stated Amount at the rate of % less the amount of interest
actually earned from such investment per Purchase Contract.
A Unitholder who does not make an effective Cash Settlement or deliver an
instruction for a Collateral Settlement will be deemed to have elected a
Collateral Settlement, and the Unitholder's Purchase Contract automatically will
be settled accordingly.
A Holder of a separated Purchase Contract will be required under the terms
of the Unit Agreement to pay for the Depositary Share to be issued under the
Purchase Contract from the proceeds of the related Eligible Collateral, which
will be applied automatically by the Collateral Agent to the separated Purchase
Contract on the Purchase Date without receiving any instruction from the Holder
of the separated Purchase Contract. During the 30 days immediately prior to the
Purchase Date, the Collateral Agent will reinvest any maturing Eligible
Collateral in instruments maturing no later than the Business
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Day immediately prior to the Purchase Date. On the Business Day immediately
prior to the Purchase Date, the maturing Eligible Collateral will be invested in
overnight Federal funds and paid to the Company on the Purchase Date in
settlement of the related Purchase Contracts. In the event the sum of the
proceeds from the related Eligible Collateral and the interest earned from the
investment in overnight Federal funds is less than the aggregate Purchase Price
of the Purchase Contracts being settled by the Holder thereof, the Collateral
Agent will promptly notify the Holder of the amount of the shortfall, will
settle the Holder's Purchase Contracts to the extent of available cash and will
hold the resulting Depositary Shares as collateral until the Holder makes a cash
payment to the Collateral Agent in immediately available funds payable to or
upon the order of the Company in the amount of such shortfall, whereupon the
remaining Purchase Contracts will be settled and the collateral will be
released. In the event the sum of the proceeds from the related Eligible
Collateral and the interest earned from the investment in overnight Federal
funds is in excess of such aggregate Purchase Price, such excess amount will be
distributed by the Collateral Agent to the Holders of the related Purchase
Contracts on the Purchase Date.
Upon receiving a payment of the Purchase Price, the Company will be
obligated to issue and deliver the Series F Preferred Stock to the Depositary
(as defined herein), and Depositary Shares will be distributed to the Holders or
their designees.
If any of the Preferred Securities are presented by the Collateral Agent
for redemption in connection with settlement of the related Purchase Contracts
on an Early Purchase Date but are not redeemed in accordance with their terms (a
'Put Default') and such Put Default shall continue for two Business Days (the
'Extension Period'), (a) the Company will not be entitled to accelerate the
obligations of the Holders, (b) notice of any such acceleration will be
rescinded and annulled automatically, (c) any payments deposited with the
Collateral Agent to effect a Cash Settlement will be returned to the Unitholders
and (d) any proceeds received by the Collateral Agent from the Eligible
Collateral will be reinvested in Eligible Collateral. If a Put Default shall
occur and continue for more than two Business Days in connection with a
settlement of the related Purchase Contracts on the Stated Purchase Date, the
Purchase Contracts will terminate. See '--Termination.' However, the Company and
the Holders will be obligated to settle the Purchase Contracts on their original
terms on any Business Day during the Extension Period (a 'Delayed Purchase
Date') if such Preferred Securities are redeemed at the Redemption Price. During
the Extension Period any payments deposited with the Collateral Agent to effect
a Cash Settlement and any proceeds received by the Collateral Agent from the
Eligible Collateral shall be invested in overnight Federal funds for the account
of the Holders.
After the Purchase Date (or a related Delayed Purchase Date), the right of
the Company to redeem any Subordinated Debt Securities that remain outstanding
after such date will be postponed or suspended until the fifth anniversary of
such date. In addition, if the Purchase Date (or a related Delayed Purchase
Date) is an Early Purchase Date, holders of Preferred Securities that remain
outstanding after such date will have the right to require the Trust to redeem
such Preferred Securities on the fifth anniversary of such date. See
'Description of the Preferred Securities--Optional Redemption by the Company'
and '--Redemption at the Option of the Holder' and 'Description of the
Subordinated Debt Securities--Optional Redemption by the Company' and
'--Redemption at the Option of the Holder.'
Termination
Each Purchase Contract and the rights and obligations of the Company and of
the Holders thereunder (including the right and obligation to purchase
Depositary Shares) will terminate (i) upon the optional redemption by the
Company of the Subordinated Debt Securities as described in 'Description of the
Subordinated Debt Securities--Optional Redemption by the Company,' (ii) upon
certain events of bankruptcy, insolvency or reorganization with respect to the
Company, (iii) if a Put Default shall occur and be continuing for more than two
Business Days in connection with a settlement of the related Purchase Contracts
at the Stated Purchase Date, (iv) upon default in the payment of any Contract
Fee when it becomes due and payable and continuance of such default for more
than 30 days or (v) upon
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the occurrence of a Liquidation Distribution (as defined herein) in connection
with a liquidation of the Trust. See 'Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution.' Upon termination of the
Purchase Contracts, the Collateral Agent will release the Collateral held by it
from the security interest of the Company for distribution to the Holders. Any
such termination will be without liability to the Holders or the Company.
Except as described above, the obligation of a Holder under a Purchase
Contract to purchase a Depositary Share will not be terminated or otherwise
affected by the occurrence and continuance of an Event of Default with respect
to the Subordinated Debt Securities or a Declaration Event of Default with
respect to the Preferred Securities.
Contract Fees with respect to any terminated Purchase Contracts will cease
to accrue in respect of any period from and after the date of termination
(unless the Company defaults in providing funds for the payment of such accrued
Contract Fees). The Company's obligations to pay any accrued Contract Fees will
be deemed fulfilled if the Company deposits with the Unit Agent funds necessary
to pay such accrued Contract Fees, in trust with irrevocable instructions and
authorization that such funds be delivered to the Holders of the Purchase
Contracts.
CERTAIN RIGHTS OF UNITHOLDERS WITH RESPECT TO PREFERRED SECURITIES
Under the terms of the Unit Agreement and Pledge Agreement, each Unitholder
will be entitled to instruct the Unit Agent to take any action with respect to
the related Preferred Security that a registered owner or holder thereof would
be entitled to take under the terms of the Declaration, Guarantee and Preferred
Security as described in 'Description of the Preferred Securities,' 'Description
of the Guarantee' and 'Description of the Subordinated Debt Securities.'
In addition, as soon as practicable after receipt of notice of any meeting
at which holders of the Preferred Securities which are part of the Units are
entitled to vote or of notice of any solicitation of consents or request for
waiver or other action by holders of the Preferred Securities which are part of
the Units, the Unit Agent promptly will convey such notice or request to the
Unitholders as of the record date for such meeting, consent, waiver or other
action. Each such Unitholder will be entitled, subject to any applicable
restrictions, to instruct the Unit Agent to vote the amount of Preferred
Securities related to such Units. The Unit Agent will endeavor, insofar as
practicable, to vote the amount of the related Preferred Securities in
accordance with the instructions of the Unitholders as conveyed to the Unit
Agent, and the Company and the Trust will agree to take all action which may be
deemed necessary by the Unit Agent in order to enable the Unit Agent to do so.
The Unit Agent will abstain from voting shares of the Preferred Securities which
are part of the Units to the extent it does not receive specific instructions
from the Holders of the related Units.
SEPARATION OF PREFERRED SECURITY FROM THE RELATED PURCHASE CONTRACT
Unitholders may separate Preferred Securities from the related Purchase
Contracts at any time on or prior to the 32nd day immediately preceding the
Purchase Date by (a) depositing with the Collateral Agent (i) cash, (ii) U.S.
Treasury Securities with a maturity of 30 days or less and/or (iii) commercial
paper having a rating of A-1+ from Standard & Poor's Debt Ratings Group and P-1
by Moody's Investors Service Inc. with a maturity of 30 days or less ('Eligible
Collateral') having an aggregate principal amount equal to the Stated Amount of
the Preferred Securities and (b) transferring the related Units to the Unit
Agent. Upon such deposit and transfer, the Collateral Agent will effect the
release of the Preferred Securities having a corresponding Stated Amount from
the pledge of the Pledge Agreement free and clear of the Company's security
interest therein to the Unit Agent, which will (i) withdraw the related Units
from DTC, (ii) transfer the Preferred Securities to the former Unitholders who
deposited the related Eligible Collateral and (iii) deliver certificates in
definitive form to such former Unitholders evidencing their separated Purchase
Contracts. Units withdrawn from DTC will cease to be outstanding with respect to
all rights and obligations arising under the Unit Agreement.
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Separated Purchase Contracts secured by Eligible Collateral will be
nontransferable without the prior written consent of the Company and the
certificates representing such Purchase Contracts will be in definitive form
only and bear a legend in substantially the following form:
THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THE PURCHASE
CONTRACTS EVIDENCED BY THIS CERTIFICATE, OR ANY INTEREST IN SUCH PURCHASE
CONTRACTS, IS RESTRICTED BY THE TERMS OF THE UNIT AGREEMENT DATED
, 1996, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE COMPANY. NO SUCH SALE, ASSIGNMENT, TRANSFER OR OTHER
DISPOSITION SHALL BE EFFECTIVE WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
A Holder of a separated Purchase Contract may at any time on or prior to
the 32nd day immediately preceding the Purchase Date reestablish a transferable
Unit consisting of the Purchase Contract and a Preferred Security by delivering
a Preferred Security to the Collateral Agent in exchange for the Eligible
Collateral and delivering the certificate evidencing the separated Purchase
Contract to the Unit Agent. The Unit Agent will effect the reestablishment of
the transferable Unit by depositing a Unit into DTC for the credit of such
Holder (or its designee).
Holders who elect to separate the Preferred Security from the related
Purchase Contract shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent for the Eligible
Collateral and the Company shall not be responsible for any such fees or
expenses.
Unless and until a significant number of underlying Preferred Securities
are separated from the Units, there will be no market for the Preferred
Securities. Even if a significant number of Preferred Securities are so
separated, there can be no assurance that an active trading market will develop
or be sustained. The Preferred Securities will not be listed on any securities
exchange. Holders should carefully consider the likely illiquidity of the
Preferred Securities prior to making any election to separate.
Except as described above, a Preferred Security that secures a Purchase
Contract is not separable therefrom and both components may be transferred only
as a whole in the form of Units. Unitholders may separate Preferred Securities
only in integral multiples of [400] Units.
REINVESTMENT OF ELIGIBLE COLLATERAL
The Collateral Agent will reinvest any maturing Eligible Collateral pledged
by a Holder of the related Purchase Contracts in the same type and amount of
Eligible Collateral originally deposited with the Collateral Agent, maturing on
or before the Purchase Date, unless instructed by such Holder to invest in
another type and/or amount of Eligible Collateral, until the settlement or
termination of such Purchase Contracts or the reestablishment of Units
consisting of such Purchase Contracts and Preferred Securities.
If at any time the aggregate principal amount at maturity of the Eligible
Collateral pledged by a Holder exceeds the product of the Stated Amount and the
number of related Purchase Contracts, the Holder may request the Collateral
Agent to release such excess amount to the Holder free and clear of the
Company's security interest therein, and the Collateral Agent will effect such
release.
Holders of separated Purchase Contracts will be responsible for any
brokerage or other fees or expenses relating to the reinvestment or release of
the related Eligible Collateral.
DISTRIBUTIONS ON COLLATERAL
Upon receipt of distributions on the pledged Preferred Securities, the
Collateral Agent will distribute the payments to the Unit Agent who will in turn
distribute those payments to the persons in whose names the related Units are
registered at the close of business on the Business Day immediately preceding
the date of such distribution. Upon receipt of any interest or other
distributions on the Eligible Collateral (other than the proceeds of any
maturing Eligible Collateral), the Collateral Agent will
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<PAGE>
distribute the payments directly to the Holders of the related Purchase
Contracts, provided the aggregate principal amount at maturity of the Eligible
Collateral pledged by such Holder is not less than the product of the Stated
Amount and the number of the related Purchase Contracts.
PLEDGE AGREEMENT
The Collateral will be pledged to the Collateral Agent, for the benefit of
the Company, pursuant to a pledge agreement, to be dated as of ,
1996 (the 'Pledge Agreement'), to secure the obligations of the Holders to
purchase Depositary Shares under the Purchase Contracts. The rights of the
Holders to the Collateral will be subject to the Company's security interest
therein created by the Pledge Agreement. No Collateral will be released by the
Collateral Agent from the pledge arrangement except upon (i) the termination of
the related Purchase Contracts, (ii) the effective Cash Settlement of the
related Purchase Contracts, (iii) the deposit of Eligible Collateral by a
Unitholder to separate a Preferred Security from the related Purchase Contract
or (iv) the repledge of a Preferred Security by a Holder of a separated Purchase
Contract to reestablish a transferable Unit. See '--Description of the Purchase
Contracts--Payment of Purchase Price; Delivery of Depositary Shares,'
'--Termination' and '--Separation of Preferred Security from the related
Purchase Contract.' Subject to such security interest and the terms of the Unit
Agreement and the Pledge Agreement, each Unitholder will be entitled through the
Unit Agent and the Collateral Agent to all the proportional rights and
preferences of a Preferred Security (including distribution, voting, redemption
and liquidation rights) and each Holder of a separated Purchase Contract will
retain beneficial ownership of the Eligible Collateral pledged in respect of
such Purchase Contracts (including the right to receive any distributions paid
on such Eligible Collateral). See '--Certain Rights of Unitholders with respect
to Preferred Securities' and '--Distributions on Collateral.' The Company will
have no interest in the Collateral other than its security interest.
OTHER PLEDGE AND PAYMENT PROVISIONS
In the event Subordinated Debt Securities are received by the Collateral
Agent in respect of Preferred Securities held as Collateral upon the occurrence
of a Tax Event, Investment Company Event, Optional Distribution (as defined
herein) or liquidation of the Trust, the Subordinated Debt Securities will be
held by the Collateral Agent to secure the obligations to purchase Depositary
Shares under the related Purchase Contracts. Thereafter the Collateral Agent's
rights and obligations with respect to the Subordinated Debt Securities will be
substantially identical to the rights and obligations it had formerly in respect
of Preferred Securities. Among other things, the Collateral Agent will be
obligated with respect to the Subordinated Debt Securities to present the
Subordinated Debt Securities for redemption in connection with a Collateral
Settlement, to receive and distribute interest payments to the Unit Agent for
distribution to the Unitholders and to release the Subordinated Debt Securities
upon delivery of Eligible Collateral, in each case, to the same extent as would
have been required with respect to Preferred Securities. In the event of the
redemption of the Subordinated Debt Securities as the result of a Tax Event or
in connection with a liquidation, any cash or other property received by the
Collateral Agent in respect of Preferred Securities held as Collateral will be
distributed to the Unit Agent for distribution to the Unitholders, any Eligible
Collateral held by it will be released and the Purchase Contracts will be
terminated. See '--Description of the Purchase Contracts--Termination.'
CERTAIN PROVISIONS OF THE UNIT AGREEMENT AND THE PLEDGE AGREEMENT
Payment in Respect of Units and Separated Purchase Contracts; Delivery of
Depositary Shares or Preferred Securities
Payments on the Units in respect of distributions on the Preferred
Securities and Contract Fees and payments on any separated Purchase Contracts in
respect of Contract Fees will be payable and Purchase Contracts (and documents
related thereto) will be settled at the office of the Unit Agent in the Borough
of Manhattan, The City of New York. In addition, payments of distributions on
the Preferred
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Securities and Contract Fees may be made, at the option of the Company, by check
mailed to the address of the person entitled thereto as shown on the register
for the related Units or the register for the related separated Purchase
Contracts, as the case may be.
Depositary Shares will be delivered, or, if the Purchase Contract is
terminated, or a Unitholder elects to settle the Purchase Contract by making a
cash payment to the Collateral Agent, the related Preferred Securities will be
distributed in each case at the offices of the Unit Agent.
The Unit Agent will have no obligation to invest or to pay interest on any
amounts held by the Unit Agent pending distribution, except as described above.
No service charge will be made to the Unitholder for any registration of
transfer or exchange of the Units, except for any tax or other governmental
charge incidental thereto.
Modification
The Unit Agreement and the Pledge Agreement will contain provisions
permitting the Company and the Unit Agent or Collateral Agent, as the case may
be, with the consent of the Holders of not less than 66-2/3% of the combined
number of the Units and separated Purchase Contracts at the time outstanding, to
modify the terms of the Units, the Purchase Contracts, the Unit Agreement and
the Pledge Agreement, except that no such modification may, without the consent
of the Holder of each outstanding Unit or separated Purchase Contract affected
thereby, (a) change any Payment Dates, (b) increase the amount or decrease the
types of Collateral required to be pledged to secure a Holder's obligations
under the Purchase Contracts, impair the right of the Holder of any Purchase
Contract to receive distributions on the related Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral, (c) change the
place or currency of payment or reduce any Contract Fees, (d) impair the right
to institute suit for the enforcement of any Purchase Contract, (e) reduce the
amount of Depositary Shares purchasable under any Purchase Contract, increase
the price to purchase Depositary Shares on settlement of Purchase Contracts or
change the Stated Purchase Date, (f) reduce the above-stated percentage of
outstanding Units and separated Purchase Contracts, the consent of whose Holders
is required for the modification or amendment of the provisions of the Units,
the Purchase Contracts, the Unit Agreement or the Pledge Agreement or (g)
materially and adversely alter the rights of the holders of Preferred
Securities.
Merger, Consolidation and Sales of Assets
The Company will covenant in the Unit Agreement that it will not merge or
consolidate with any other entity or sell, transfer or lease all or
substantially all of its assets to another corporation unless the Company is the
continuing corporation or the successor entity is a corporation organized under
the laws of the United States of America or a state thereof ('Successor
Corporation') and such Successor Corporation expressly assumes the obligations
of the Company under the Purchase Contracts, the Unit Agreement and the Pledge
Agreement, and the Company or such Successor Corporation is not, immediately
after such merger, consolidation, sale, transfer or lease, in default in the
performance of any of its obligations thereunder. Under the terms of the Unit
Agreement, in the case of any such consolidation, merger, sale, transfer or
lease, unless the Purchase Contracts have been terminated (see 'Description of
the Purchase Contracts--Termination'), each Holder of Units or separated
Purchase Contracts then outstanding will have the right and the obligation to
purchase on the Purchase Date, either directly or through the purchase of
depositary shares, the same number of shares of preferred stock of the Successor
Corporation, with substantially the same preferences, rights and powers as the
Series F Preferred Stock, as such Holder would have purchased if a Purchase Date
with respect to such Purchase Contracts had occurred immediately prior to such
consolidation, merger, sale, transfer or lease. If, however, the Successor
Corporation does not have publicly held equity securities outstanding but is a
direct or indirect subsidiary of a corporation that does, then, at the election
of the Successor Corporation, the preferred stock may be preferred stock of any
such publicly held parent.
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Title
The Company, the Unit Agent and the Collateral Agent may treat the
registered owner of any Unit or separated Purchase Contract as the absolute
owner thereof for the purpose of making payment and settling the Purchase
Contracts and for all other purposes.
Governing Law
The Unit Agreement, the Pledge Agreement, the Units and the Purchase
Contracts will be governed by, and construed in accordance with, the laws of the
State of New York.
Information Concerning the Unit Agent
Chemical Bank, a New York banking corporation, will be the Unit Agent. The
Unit Agent will act as the agent for the holders of Units and separated Purchase
Contracts from time to time. The Unit Agreement will not obligate the Unit Agent
to exercise any discretionary actions in connection with a default under the
terms of the Units, the Unit Agreement or the Preferred Securities.
The Unit Agreement will contain provisions limiting the liability of the
Unit Agent. The Unit Agreement will contain provisions under which the Unit
Agent may resign or be replaced. Such resignation or replacement would be
effective upon appointment of a successor.
Information Concerning the Collateral Agent
will be the Collateral Agent. The Collateral Agent will act
solely as the agent of the Company and will not assume any obligation or
relationship of agency or trust for or with any of the Holders except for the
obligations owed by a pledgee of property to the owner thereof under the Pledge
Agreement and applicable law.
The Pledge Agreement will contain provisions limiting the liability of the
Collateral Agent. The Pledge Agreement will contain provisions under which the
Collateral Agent may resign or be replaced. Such resignation or replacement
would be effective upon the appointment of a successor.
Miscellaneous
The Unit Agreement will provide that the Company will pay all fees and
expenses related to (i) the offering of the Units, (ii) the retention of the
Collateral Agent and (iii) the enforcement by the Unit Agent of the rights of
the Unitholders; provided, however, that holders who elect to separate the
Preferred Security from the related Purchase Contract shall be responsible for
any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent for the Eligible Collateral, and the Company shall not be
responsible for any such fees or expenses. See '--Separation of Preferred
Security from the related Purchase Contract.'
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Units by tender, in the
open market or by private agreement.
BOOK-ENTRY SYSTEM
DTC will act as securities depositary for Units. Those Units deposited with
DTC (the 'Global Units') will be represented by one or more certificates issued
only as fully registered securities registered in the name of Cede & Co. (DTC's
nominee).
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the Global Units as
represented by a global certificate.
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DTC is a limited-purpose trust company organized under the New York Banking
Law, a 'banking organization' within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a 'clearing corporation' within the
meaning of the New York Uniform Commercial Code, and a 'clearing agency'
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ('Participants') deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its Participants
and by the NYSE, the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. (the 'NASD'). Access to the DTC system is also
available to others, such as securities brokers and dealers, banks and trust
companies that clear transactions through or maintain a direct or indirect
custodial relationship with a Participant, either directly or indirectly
('Indirect Participants'). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of Global Units within the DTC system must be made by or through
Participants, which will receive a credit for Global Units on DTC's records. The
ownership interest of each actual purchaser of Global Units (the 'Beneficial
Owner') is in turn to be recorded on the Participants' and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Participants or Indirect Participants
through which the Beneficial Owners purchased Global Units. Transfers of
ownership interests in the Global Units are to be accomplished by entries made
on the books of Participants and Indirect Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Global Units, except in the event that use of the
book-entry system for Global Units is discontinued.
To facilitate subsequent transfers, all Global Units deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Global Units with DTC and their registration in the name of Cede
& Co. effect no change in beneficial interest. DTC has no knowledge of the
actual Beneficial Owners of the Global Units; DTC's records reflect only the
identity of the Participants to whose accounts such Global Units are credited,
which may or may not be the Beneficial Owners. The Participants and Indirect
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
So long as DTC or its nominee is the registered owner or holder of a Global
Unit, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Units represented thereby for all purposes under the Unit
Agreement and the Units. No beneficial owner of an interest in a Global Unit
will be able to transfer that interest except in accordance with DTC's
applicable procedures, in addition to those provided for under the Unit
Agreement.
Transfers between Participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. If a holder
requires physical delivery of a Unit in a definitive form, for any reason,
including to sell Units to persons in states which require such delivery of such
Units or to pledge such Units, such holder must transfer its interest in the
Global Unit in accordance with the normal procedures of DTC and the procedures
set forth in the Unit Agreement.
DTC has advised the Unit Agent that it will take any action permitted to be
taken by a Unitholder only at the direction of one or more Participants to whose
account the DTC interests in the Global Units are certified and only in respect
of such portion of the aggregate number of Units as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Units, DTC will exchange the Global Units for Units in
definitive form, which it will distribute to its Participants.
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Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time.
Although voting with respect to the Global Units is limited, in those cases
where a vote is required, neither DTC nor Cede & Co. will itself consent or vote
with respect to Global Units. Under its usual procedures, DTC would mail an
Omnibus Proxy to the Unit Agent as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Participants to whose accounts the Global Units are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments on the Global Units held in book-entry form in respect of
distributions on Preferred Securities and Contract Fees will be made to DTC in
immediately available funds. DTC's practice is to credit Participants' accounts
on the relevant payment date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants and Indirect
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in 'street name,' and such payments will
be the responsibility of such Participants and Indirect Participants and not of
DTC or the Unit Agent, subject to any statutory or regulatory requirements to
the contrary that may be in effect from time to time. Payments of Contract Fees
and distributions on Preferred Securities to DTC are the responsibility of the
Unit Agent and the Trust, respectively; disbursement of such payments to
Participants is the responsibility of DTC; and disbursement of such payments to
the Beneficial Owners is the responsibility of Participants and Indirect
Participants.
Except as provided herein, a Beneficial Owner in a global certificate
representing the Global Units will not be entitled to receive physical delivery
of Global Units. Accordingly, each Beneficial Owner must rely on the procedures
of DTC to exercise any rights under the Global Units.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interest in the Global Units among Participants of DTC, DTC is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company, the Trust nor
the Unit Agent will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depositary with
respect to the Global Units at any time by giving reasonable notice to the
Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Global Units certificates are required to be printed
and delivered. Additionally, the Company may decide to discontinue use of the
system of book-entry transfers through DTC (or any successor depositary) with
respect to the Global Units. In that event, certificates for Global Units will
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
LISTING
Application will be made to list the Units on the NYSE under the symbol
' .'
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DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, , will act as the indenture
trustee for purposes of compliance with the provisions of the Trust Indenture
Act. The terms of the Preferred Securities will include those stated in the
Declaration and those made part of the Declaration by the Trust Indenture Act.
The following summary of the principal terms and provisions of the Preferred
Securities does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Declaration, the Trust Act and the Trust
Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned, directly or
indirectly, by the Company. The Common Securities rank pari passu, and payments
will be made thereon on a pro rata basis, with the Preferred Securities, except
that upon the occurrence of a Declaration Event of Default, the rights of the
holders of the Common Securities to receive payment of periodic distributions
and payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Preferred Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities or the incurrence of any indebtedness by the Trust. Pursuant to the
Declaration, the Property Trustee will own the Subordinated Debt Securities
purchased by the Trust for the benefit of the holders of the Trust Securities.
The payment of distributions out of money held by the Trust, and payments upon
redemption of the Preferred Securities or liquidation of the Trust, are
guaranteed by the Company to the extent described under 'Description of the
Guarantee.' The Guarantee will be held by , the Guarantee Trustee,
for the benefit of the holders of the Preferred Securities. The Guarantee does
not cover payment of distributions when the Trust does not have sufficient
available funds to pay such distributions. In such event, the remedy of a holder
of Preferred Securities is to vote to appoint a Special Regular Trustee and to
direct the Property Trustee to enforce the Property Trustee's rights under the
Subordinated Debt Securities. See 'Description of the Preferred
Securities--Voting Rights.'
The procedures whereby Unitholders may exercise certain rights under the
Declaration are described under 'Description of the Units--Certain Rights of
Unitholders with respect to Preferred Securities.'
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the Stated Amount of $25 per Preferred Security. Distributions in
arrears for more than one quarter will bear interest thereon at the rate per
annum of % thereof compounded quarterly. The term 'distribution' as used
herein includes any such interest payable unless otherwise stated. The amount of
distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1996, and will be payable quarterly in arrears on each Payment
Date commencing , 1996, when, as and if available for payment.
Distributions will be made by the Property Trustee, except as otherwise
described below.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from the Company on the Subordinated Debt Securities. See
'Description of the Subordinated Debt Securities.' The payment of distributions
out of moneys held by the Trust is guaranteed by the Company to the limited
extent set forth under 'Description of the Guarantees.'
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Distributions payable on any Payment Date on the Preferred Securities will
be payable to the holders thereof as they appear on the books and records of the
Trust at the close of business on the fifteenth day immediately preceding such
Payment Date. Such distributions will be paid through the Property Trustee who
will hold amounts received in respect of the Subordinated Debt Securities in the
Property Account for the benefit of the holders of the Trust Securities. In the
event that any date on which distributions are to be made on the Preferred
Securities is not a Business Day, then payment of the distributions payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such Payment Date.
OPTIONAL REDEMPTION BY THE COMPANY
The Company is permitted to redeem the Subordinated Debt Securities, in
whole (but not in part), after , 2001 upon not less than 30 nor
more than 60 days' notice on any Payment Date. See 'Description of the
Subordinated Debt Securities--Optional Redemption by the Company.'
Notwithstanding the foregoing, after a settlement of the Purchase Contracts on
the Purchase Date (or a related Delayed Purchase Date), the right of the Company
to redeem any Subordinated Debt Securities that remain outstanding after such
date will be postponed or suspended until the fifth anniversary of such date.
See 'Description of the Units--Description of the Purchase
Contracts--Acceleration of Purchase.' Upon the redemption of the Subordinated
Debt Securities in the manner described in this paragraph, the Trust will, to
the extent of the proceeds of such redemption, redeem Preferred Securities and
Common Securities at the Redemption Price.
REDEMPTION AT THE OPTION OF THE HOLDER
Each holder of Preferred Securities, including the Collateral Agent, will
have the right to require the Trust to redeem all or a portion of the Preferred
Securities owned or pledged with such holder (the 'Put Option') on the Business
Day immediately preceding the Purchase Date (or on the related Delayed Purchase
Date) (the 'Initial Put Option Exercise Date') at the Redemption Price and will
be paid by the Trust in immediately available funds, subject to certain
conditions. In addition, after the settlement of the Purchase Contracts on an
Early Purchase Date (or a related Delayed Purchase Date), holders of Preferred
Securities that remain outstanding after such date will have a Put Option with
respect to the Preferred Securities owned by such holder on the fifth
anniversary of such date (the 'Fifth Anniversary Put Option Exercise Date' and,
together with the Initial Put Option Exercise Date, the 'Put Option Exercise
Date') at the Redemption Price and will be paid by the Trust in immediately
available funds, subject to certain conditions. However, the Trust may not
redeem fewer than all of the outstanding Preferred Securities unless all accrued
and unpaid distributions have been paid on all Preferred Securities for all
quarterly distribution periods on or prior to the Put Option Exercise Date.
The Trust will obtain the funds to pay the Redemption Price of the
Preferred Securities being redeemed under the Put Option by presenting to the
Company, pursuant to the Trust's right under the Subordinated Debt Securities to
require the Company to redeem all or a portion of the Subordinated Debt
Securities on the Put Option Exercise Date, Subordinated Debt Securities in an
aggregate principal amount equal to the Stated Amount of such Preferred
Securities for repayment on the Put Option Exercise Date at the Redemption
Price.
A holder of Preferred Securities, including the Collateral Agent, must
provide the Trust with notice of its intention to exercise the Put Option (a)
not less than 10 days nor more than 30 days prior to the Initial Put Option
Exercise Date, except this notice requirement will be waived with respect to
Preferred Securities held by the Collateral Agent if the holders of the related
Units fail to effect a Cash Settlement or deliver an instruction requesting a
Collateral Settlement or (b) not less than 30 days nor more than 60 days prior
to the Fifth Anniversary Put Option Exercise Date. Any notice of exercise by
each holder exercising the Put Option shall state (i) if applicable, the
certificate number(s) of the Preferred Security to be delivered by such holder
for redemption by the Trust and (ii) that such Preferred Securities are to
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be redeemed pursuant to the applicable provisions of the Preferred Securities.
Holders of Preferred Securities may obtain copies of the required form of
optional redemption notice from the Property Trustee.
The Trust will comply with the provisions of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act if required and will file
Schedule 13E-4 or any other schedule if required thereunder in connection with
any offer by the Trust to purchase the Preferred Securities.
Payment of the Redemption Price to the holders of the Preferred Securities
for which a notice of exercise has been delivered (or waived) is conditioned
upon delivery of such Preferred Security to the Property Trustee on the Put
Option Exercise Date. Once so delivered, payment of the Redemption Price to the
holders of the Preferred Securities will be made by wire transfer of immediately
available funds on the Put Option Exercise Date in an amount equal to the
aggregate Redemption Price of the Preferred Securities that are subject to the
relevant notice of exercise. If the Property Trustee holds immediately available
funds sufficient to pay the Redemption Price of such Preferred Securities, then,
immediately prior to the close of business on the Put Option Exercise Date, such
Preferred Securities will cease to be outstanding and distributions thereon will
cease to accrue, whether or not such Preferred Securities are delivered to the
Property Trustee, and all other rights of the holder in respect of the Preferred
Securities, including the holder's right to require the Trust to redeem such
Preferred Securities, shall terminate and lapse (other than the right to receive
the Redemption Price in immediately available funds by wire transfer upon
delivery of such Preferred Securities).
If a Put Default shall occur and continue for more than two Business Days
following an Initial Put Option Exercise Date, and the Purchase Date is an Early
Purchase Date, then (a) any notice of exercise for such Initial Put Option
Exercise Date will be rescinded and annulled automatically, (b) any presentation
of the related Subordinated Debt Securities to the Company for redemption will
be rescinded and annulled automatically and (c) any payments received by the
Property Trustee from the redemption of such Subordinated Debt Securities will
be returned to the Company.
The rescission of any notice of exercise will not prevent holders of
Preferred Securities from giving a notice of exercise at a later date.
MANDATORY REDEMPTION
The Subordinated Debt Securities will mature on , 2026, the
Scheduled Maturity Date. Upon the repayment of the Subordinated Debt Securities,
whether at maturity or upon redemption, the proceeds from such repayment or
redemption shall simultaneously be applied to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities so repaid or redeemed at the Redemption Price.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
If, at any time, a Tax Event shall occur and be continuing, the Trust
shall, except in the limited circumstances described below, be dissolved with
the result that Subordinated Debt Securities with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Trust Securities, would be distributed
to the holders of the Trust Securities in liquidation of such holders' interests
in the Trust on a pro rata basis within 90 days following the occurrence of such
Tax Event; provided that such dissolution and distribution shall be conditioned
on (i) the Regular Trustees' receipt of an opinion of nationally recognized
independent tax counsel experienced in such matters (a 'No Recognition
Opinion'), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Trust Securities will not
recognize any gain or loss for United States Federal income tax purposes as a
result of such dissolution and distribution of Subordinated Debt Securities and
(ii) the Company being unable to avoid such Tax Event within such 90 day period
by taking some ministerial action or pursuing some other reasonable measure that
will have no adverse effect on the Trust, the Company or the holders of the
Trust Securities. Furthermore, if (i) the Company has received an opinion (a
'Redemption Tax
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Opinion') of nationally recognized independent tax counsel experienced in such
matters that, as a result of a Tax Event, there is more than an insubstantial
risk that the Company would be precluded from deducting the interest on the
Subordinated Debt Securities for United States Federal income tax purposes, even
after the Subordinated Debt Securities were distributed to the holders of Trust
Securities in liquidation of such holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such tax counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Company shall
have the right, upon not less than 30 nor more than 60 days' notice, to redeem
the Subordinated Debt Securities in whole (but not in part) for cash at the
Subordinated Debt Redemption Price within 90 days following the occurrence of
such Tax Event, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities so redeemed shall be redeemed by the Trust (a 'Tax
Event Redemption') at the Redemption Price; provided, however, that, if at the
time there is available to the Company or the Trust the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some ministerial
action, such as filing a form or making an election or pursuing some other
similar reasonable measure that has no adverse effect on the Trust, the Company
or the holders of the Trust Securities, the Company or the Trust will pursue
such measure in lieu of redemption. See 'Mandatory Redemption.'
'Tax Event' means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a 'Dissolution Tax Opinion') to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust is or will be subject to United States
Federal income tax with respect to interest accrued or received on the
Subordinated Debt Securities, (ii) interest payable to the Trust on the
Subordinated Debt Securities is or will not be deductible by the Company in
whole or in part for United States Federal income tax purposes or (iii) the
Trust is or will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges, which change or amendment becomes
effective on or after the date of this Prospectus.
If an Investment Company Event shall occur and be continuing, the Company
shall cause the Regular Trustees to liquidate the Trust and cause the
Subordinated Debt Securities to be distributed to the holders of the Preferred
Securities in liquidation of the Trust within 90 days following the occurrence
of such Investment Company Event.
The distribution by the Company of the Subordinated Debt Securities will
effectively result in the cancellation of the Preferred Securities.
'Investment Company Event' means that the Regular Trustees shall have
obtained an opinion from independent counsel experienced in practice under the
Investment Company Act of 1940, as amended (the '1940 Act'), to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a 'Change in 1940 Act
Law'), there is more than an insubstantial risk that the Trust is or will be
considered an investment company which is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the
original issue date of the Trust Securities.
After the date for any distribution of Subordinated Debt Securities upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding and (ii) DTC or its nominee, as the record holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Subordinated Debt Securities to be delivered upon
such distribution.
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REDEMPTION PROCEDURES--OPTIONAL REDEMPTION BY THE COMPANY; MANDATORY REDEMPTION;
TAX EVENT REDEMPTION
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives notice of a redemption in respect of Preferred
Securities (which notice shall be irrevocable), and if the Company has paid to
the Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debt Securities as described under
'--Optional Redemption by the Company,' '--Mandatory Redemption' or '--Tax Event
or Investment Company Event Redemption or Distribution' above, then the Property
Trustee will pay the Redemption Price per Preferred Security to the holders of
the Preferred Securities by wire transfer of immediately available funds upon
surrender of the certificate evidencing the Preferred Securities to the Property
Agent. If notice of such redemption shall have been given and the Property
Trustee holds immediately available funds sufficient to pay the Redemption Price
of the Preferred Securities, then, immediately prior to the close of business on
the date fixed for such redemption of Preferred Securities, the Preferred
Securities will cease to be outstanding and distributions thereon will cease to
accrue, whether or not such Preferred Securities are surrendered to the Property
Trustee, and all other rights of the holder in respect of the Preferred
Securities shall terminate and lapse (other than the right to receive the
Redemption Price in immediately available funds by wire transfer upon delivery
of such Preferred Securities). In the event that any date fixed for such
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price for the redemption of the
Preferred Securities is improperly withheld or refused and not paid either by
the Trust or by the Company pursuant to the Guarantee, distributions on such
Preferred Securities will continue to accrue at the then applicable rate from
the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed pro rata.
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
OPTIONAL DISTRIBUTION BY THE COMPANY
In the event that the aggregate Stated Amount of any Preferred Securities
which remain outstanding after the Purchase Date is less than 2% of the
aggregate Stated Amount of the Preferred Securities originally issued by the
Trust, the Trust may be dissolved at the option of the Company during the 90
days following the Purchase Date (an 'Optional Distribution') with the result
that Subordinated Debt Securities with an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate identical to
the distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Trust Securities, would be distributed as soon as
practicable to the holders of the Trust Securities in liquidation of such
holders' interests in the Trust on a pro rata basis.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Declaration, the Trust will terminate on ,
2031, or earlier upon (i) the bankruptcy, dissolution or insolvency of the
Company, (ii) the occurrence of a Tax Event or Investment Company Event followed
by the distribution of the Subordinated Debt Securities, (iii) the occurrence of
an Optional Distribution or (iv) the redemption of all of the Trust Securities.
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If an early termination occurs as described in clause (i) above, the then
holders of the Preferred Securities will be entitled to receive out of the
assets of the Trust, after satisfaction of liabilities to creditors,
distributions in an amount equal to the aggregate of the Stated Amount per
Preferred Security plus accrued and unpaid distributions thereon to the date of
payment (the 'Liquidation Distribution'), unless, in connection with such
termination, Subordinated Debt Securities in an aggregate stated principal
amount equal to the aggregate Stated Amount of, with an interest rate identical
to the distribution rate of, and accrued and unpaid interest equal to accrued
and unpaid distributions on, the Preferred Securities have been distributed on a
pro rata basis to the holders of the Preferred Securities. If such Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Preferred Securities shall be paid
on a pro rata basis, provided that such amounts may be paid in any combination
of cash, Subordinated Debt Securities or other property held by the Trust. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities with
regard to such distributions.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an 'Event of Default') constitutes
an event of default under the Declaration with respect to the Trust Securities
(a 'Declaration Event of Default'), provided that, pursuant to the Declaration,
the holder of the Common Securities will be deemed to have waived any
Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Subordinated Debt Securities will have the right under
the Indenture to declare the principal of and interest on the Subordinated Debt
Securities to be immediately due and payable. The Company and the Trust are each
required to file annually with the Property Trustee an officer's certificate as
to its compliance with all conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act
and 'Description of the Guarantees--Amendments and Assignment,' and as otherwise
required by law and the Declaration, the holders of the Preferred Securities
will have no voting rights.
If a Declaration Event of Default occurs and is continuing (an 'Appointment
Event'), then the holders of the Preferred Securities, including the Collateral
Agent, acting as a single class, will be entitled to appoint, by the majority
vote of such holders, a Special Regular Trustee. Any holder of Preferred
Securities (other than the Company or any of its affiliates) shall be entitled
to nominate any person to be appointed as Special Regular Trustee. Not later
than 30 days after such right to appoint a Special Regular Trustee arises, the
Regular Trustees shall convene a meeting of the holders of Preferred Securities
for the purpose of appointing a Special Regular Trustee. If the Regular Trustees
fail to convene such meeting within such 30-day period, the holders of not less
than 10% of the aggregate Stated Amount of the outstanding Preferred Securities
will be entitled to convene such meeting. The provisions of the Declaration
relating to the convening and conduct of the meetings of the holders will apply
with respect to any such meeting. Any Special Regular Trustee so appointed shall
cease to be a Special Regular Trustee if the Appointment Event pursuant to which
the Special Regular Trustee was appointed and all other Appointment Events cease
to be continuing. Notwithstanding the appointment of any such Special Regular
Trustee, the Company shall retain all rights under the Indenture.
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The holders of a majority in aggregate Stated Amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration including the right to direct the Property Trustee, as holder of the
Subordinated Debt Securities, to (i) exercise the remedies available under the
Indenture with respect to the Subordinated Debt Securities, (ii) waive any past
Event of Default that is waivable under the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Subordinated Debt Securities
requiring the consent of the holders of the Subordinated Debt Securities;
provided, however, that, where a consent or action under the Indenture would
require the consent or act of more than a majority of the holders (a
'Super-Majority') affected thereby, only the holders of at least such
Super-Majority of the Preferred Securities may direct the Property Trustee to
give such consent or take such action. If the Property Trustee fails to enforce
its rights under the Subordinated Debt Securities, a record holder of Preferred
Securities may, after a period of 30 days has elapsed from such holder's written
request to the Property Trustee to enforce such rights, institute a legal
proceeding directly against the Company to enforce the Property Trustee's rights
under the Subordinated Debt Securities without first instituting any legal
proceeding against the Property Trustee or any other person or entity. The
Property Trustee shall notify all holders of the Preferred Securities of any
notice of default received from the Indenture Trustee with respect to the
Subordinated Debt Securities. Such notice shall state that such Event of Default
also constitutes a Declaration Event of Default. Except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Property Trustee shall not take any of the actions described in clauses (i),
(ii), (iii) or (iv) above unless the Property Trustee has obtained an opinion of
tax counsel to the effect that, as a result of such action, the Trust will not
fail to be classified as a grantor trust for United States Federal income tax
purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debt Securities, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Subordinated
Debt Securities, the Property Trustee shall request the direction of the holders
of the Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of a Super-Majority, the
Property Trustee may only give such consent at the direction of the holders of
at least the proportion in liquidation amount of the Trust Securities which the
relevant Super-Majority represents of the aggregate principal amount of the
Subordinated Debt Securities outstanding. The Property Trustee shall be under no
obligation to take any such action in accordance with the directions of the
holders of the Trust Securities unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
Federal income tax the Trust will not be classified as other than a grantor
trust.
A waiver of an Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for the Trust to redeem
and cancel Preferred Securities or distribute Subordinated Debt Securities in
accordance with the Declaration.
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Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the Company or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Company, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
Except in the limited circumstances described above, in connection with the
appointment of a Special Regular Trustee, holders of the Preferred Securities
will have no rights to appoint or remove the Company Trustees, who may be
appointed, removed or replaced solely by the Company as the indirect or direct
holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of
the Regular Trustees (and in certain circumstances the Property Trustee),
provided that, if any proposed amendment provides for, or the Regular Trustees
otherwise propose to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of the Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of at least 66-2/3% in
liquidation amount of the Trust Securities affected thereby; provided that, the
rights of holders of Preferred Securities to appoint a Special Regular Trustee
shall not be amended without the consent of each holder of Preferred Securities;
provided further that, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 66-2/3% in liquidation amount of such class of
securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States Federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee or (iii) cause the Trust to be deemed an 'investment
company' that is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge or be replaced by, or
convey, transfer or lease its properties and assets substantially as an entirety
to, any corporation or other body, except as described below. The Trust may,
with the consent of a majority of the Regular Trustees and without the consent
of the holders of the Trust Securities, consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws of any State;
provided that, (i) such successor entity either (x) expressly assumes all of the
obligations of the Trust under the Trust Securities or (y) substitutes for the
Preferred Securities other securities having substantially the same terms as the
Trust Securities (the 'Successor Securities'), so long as the Successor
Securities rank the same as the Trust Securities rank with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Company expressly acknowledges a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Subordinated
Debt Securities, (iii) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor Securities) or
Units to be downgraded by any nationally recognized statistical rating
organization, (iv) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the holders of
the Trust Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in the
new entity), (v) such successor entity has a purpose identical to that of the
Trust, (vi) prior to such merger, consolidation, amalgamation or replacement,
the Company has received an opinion of a nationally recognized independent
counsel to the Trust experienced in such matters to the effect that, (a) such
merger, consolidation, amalgamation or replacement does not adversely affect the
rights,
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preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (b) following such merger,
consolidation, amalgamation or replacement, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and (c) such merger, consolidation, amalgamation or replacement does not result
in a taxable event to any holders of Preferred Securities or Units or otherwise
affect the Federal income tax consequences of any investment in the Preferred
Securities or Units and (vii) the Company guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee and the Common Securities Guarantee (as defined herein).
Notwithstanding the foregoing, the Trust shall not, except with the consent of
the holders of 100% in liquidation amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the Successor Entity to be classified as other than a grantor trust for United
States Federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE
DTC will act as securities depositary for the Preferred Securities. The
Preferred Securities will be issued in the form of one or more global Preferred
Securities certificates, representing the total aggregate number of Preferred
Securities, fully registered in the name of Cede & Co., and will be deposited
with DTC. For a description of DTC and the specific terms of the depositary
arrangements, see 'Description of the Units--Book-Entry System.' As of the date
of this Prospectus, the descriptions herein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Global Units apply in all material respects to any obligations
represented by one or more global Preferred Securities certificates held by DTC.
The Company may appoint a successor to DTC or any successor depositary in the
event DTC or such successor depositary is unable or unwilling to continue as a
depository for the global Preferred Securities certificates.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Preferred
Securities as represented by a global certificate.
Redemption notices in respect of the Preferred Securities held in
book-entry form will be sent to Cede & Co. If less than all of the Preferred
Securities are being redeemed, DTC will determine the amount of the interest of
each Participant to be redeemed in accordance with its procedures.
Except as provided herein, a Beneficial Owner in a global Preferred
Security certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are required to be
printed and delivered. Additionally, the Regular Trustees (with the consent of
the Company) may decide to discontinue use of the system of book-entry transfers
through DTC (or any successor depositary) with respect to the Preferred
Securities. In that event, certificates for the Preferred Securities will be
printed and delivered.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Property Trustee is under no obligation
to exercise any of the powers vested in it by the Declaration at the request of
any holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be
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incurred thereby. The holders of Preferred Securities will not be required to
offer such indemnity in the event such holders, by exercising their voting
rights, direct the Property Trustee to take any action following a Declaration
Event of Default.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust so
that the Trust will not be required to register as an 'investment company' under
the 1940 Act or characterized as other than a grantor trust for United States
Federal income tax purposes. The Company is authorized and directed to conduct
its affairs so that the Subordinated Debt Securities will be treated as
indebtedness of the Company for United States Federal income tax purposes. In
this connection, the Company and the Regular Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of the
Trust or the certificate of incorporation of the Company, that each of the
Company and the Regular Trustees determines in its discretion to be necessary or
desirable to achieve such end, as long as such action does not adversely affect
the interests of the holders of the Preferred Securities or vary the terms
thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of the principal terms and provisions of the
Guarantee which will be executed and delivered by the Company for the benefit of
the holders from time to time of Preferred Securities. This summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Guarantee. The Guarantee
incorporates by reference terms of the Trust Indenture Act. The Guarantee
Trustee holds the Guarantee for the benefit of the holders of the Preferred
Securities.
GENERAL
Pursuant to the Guarantee, the Company irrevocably and unconditionally
agrees, to the extent set forth herein, to pay in full, to the holders of the
Preferred Securities, the Guarantee Payments (as defined herein), as and when
due, regardless of any defense, right of set-off or counterclaim which the Trust
may have or assert. The following payments with respect to the Preferred
Securities, to the extent not paid by the Trust (the 'Guarantee Payments'), will
be subject to the Guarantee (without duplication): (i) any accrued and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent of funds of the Trust available therefor, (ii) the amount payable upon
redemption of the Preferred Securities, payable out of funds of the Trust
available therefor with respect to any Preferred Securities called for
redemption by the Trust and (iii) upon a liquidation of the Trust, the lesser of
(a) the aggregate of the Stated Amount and all accrued and unpaid distributions
on the Preferred Securities to the date of payment, to the extent of funds of
the Trust available therefor and (b) the amount of assets of the Trust remaining
available for distribution to holders of Preferred Securities. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the holders of Preferred Securities or by
causing the Trust to pay such amounts to such holders.
The Guarantee will be a full and unconditional guarantee of the Guarantee
Payments with respect to the Preferred Securities from the time of issuance of
the Preferred Securities, but will not apply to the payment of distributions and
other payments on the Preferred Securities when the Property Trustee does not
have sufficient funds in the Property Account to make such distributions or
other payments. If the Company does not make interest payments on the
Subordinated Debt Securities held by the
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Property Trustee, the Trust will not make distributions on the Preferred
Securities issued by the Trust and will not have funds available therefor. See
'Description of the Subordinated Debt Securities-- Certain Covenants.'
Because the Guarantee is a guarantee of payment and not of collection,
holders of the Preferred Securities may proceed directly against the Company as
guarantor, rather than having to proceed against the Trust before attempting to
collect from the Company, and the Company waives any right or remedy to require
that any action be brought against the Trust or any other person or entity
before proceeding against the Company. Such obligations will not be discharged
except by payment of the Guarantee Payments in full. The Guarantee will be
deposited with the Guarantee Trustee to be held for the benefit of the holders
of Preferred Securities. Except as otherwise noted herein, the Guarantee Trustee
has the right to enforce the Guarantee on behalf of the holders of the Preferred
Securities.
The Company has also agreed separately irrevocably and unconditionally to
guarantee the obligations of the Trust with respect to the Common Securities
(the 'Common Securities Guarantee') to the same extent as the Guarantee, except
that upon the occurrence and during the continuation of a Declaration Event of
Default, holders of Preferred Securities shall have priority over holders of
Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
The procedures whereby Unitholders may exercise certain rights under the
Guarantee are described in 'Description of the Units Certain--Rights of
Unitholders with respect to Preferred Securities.'
CERTAIN COVENANTS OF THE COMPANY
In the Guarantee, the Company has covenanted that, so long as any Preferred
Securities remain outstanding, if (i) the Company shall be in default with
respect to its payment or other obligations under the Guarantee or (ii) there
shall have occurred and be continuing any event that, with the giving of notice
or the lapse of time or both, would constitute an Event of Default under the
Indenture, then the Company will not (a) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock, except for
dividends or distributions in shares of its capital stock of the same class on
which such dividend or distribution is being paid and conversions or exchanges
of common stock of one class into common stock of another class or (b) make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu with or junior to
the Subordinated Debt Securities (except by conversion into or exchange for
shares of its capital stock and except for a redemption, purchase or other
acquisition of shares of its capital stock made for the purpose of an employee
incentive plan or benefit plan of the Company or any of its subsidiaries).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Preferred Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
holders of not less than 66-2/3% in aggregate Stated Amount of the outstanding
Preferred Securities. The manner of obtaining any such approval of holders of
the Preferred Securities will be as set forth under 'Description of the
Preferred Securities--Voting Rights.' All guarantees and agreements contained in
the Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities then outstanding. Except in connection with any
permitted merger or consolidation of the Company with or into another entity or
any permitted sale, transfer or lease of the Company's assets to another entity
as described below under 'Description of the Subordinated Debt Securities--
Restrictions,' the Company may not assign its rights or delegate its obligations
under the Guarantee without the prior approval of the holders of at least
66-2/3% of the aggregate Stated Amount of the Preferred Securities then
outstanding.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Preferred Securities and
be of no further force and effect upon (a) full payment of the applicable
Redemption Price of such holder's Preferred Securities or (b) the distribution
of Subordinated Debt Securities to the holders of all of the Preferred
Securities, and will terminate completely upon full payment of the amounts
payable upon liquidation of the Trust. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities must restore payment of any sums paid under such
Preferred Securities or the Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder for 30
days after notice to the Company by the Guarantee Trustee or by the holders of
not less than 25% of the aggregate Stated Amount of the Preferred Securities
then outstanding.
The holders of a majority in aggregate Stated Amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee. If the Guarantee Trustee fails to enforce
the Guarantee, any holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce the Guarantee Trustee's
rights under the Guarantee, without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity.
STATUS OF THE GUARANTEE; SUBORDINATION
The Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all liabilities of
the Company except any liabilities that may be made pari passu expressly by
their terms, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or preference stock of
any affiliate of the Company and (iii) senior to the Company's common stock. The
Declaration provides that each holder of Preferred Securities by acceptance
thereof agrees to the subordination provisions and other terms of the Guarantee.
Upon the bankruptcy, liquidation or winding up of the Company, its obligations
under the Guarantee will rank junior to all its other liabilities (except as
aforesaid) and, therefore, funds may not be available for payment under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default, has undertaken
to perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby. The
Guarantee Trustee also serves as the Property Trustee and the Unit Agent.
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
laws of the State of New York.
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DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. The following description does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
the Indenture (the 'Indenture') between the Company and
, as Trustee (the 'Indenture Trustee'), the form of
which has been filed with the Commission as an exhibit to the Registration
Statement of which this Prospectus is a part. The terms of the Subordinated Debt
Securities will include those stated in the Indenture and those made a part of
the Indenture by reference to the Trust Indenture Act.
GENERAL
The Subordinated Debt Securities will be issued as unsecured debt under the
Indenture. The Subordinated Debt Securities will be limited in aggregate
principal amount to approximately $ , such amount being the sum of the
aggregate Stated Amount of the Preferred Securities and the capital contributed
by the Company in exchange for the Common Securities (the 'Company Payment').
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon including Additional Interest (as defined herein), if any, on
, 2026.
The Subordinated Debt Securities will initially be issued in certificated
form in denominations of $ and integral multiples thereof and may be
transferred or exchanged at the offices described below. Principal and interest
will be payable, the transfer of the Subordinated Debt Securities will be
registrable and Subordinated Debt Securities will be exchangeable for
Subordinated Debt Securities of other denominations of a like aggregate
principal amount at the corporate trust office of the Indenture Trustee in
; provided that payment of interest may be made at the
option of the Company by check mailed to the address of the persons entitled
thereto. If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Debt Securities will be issued as a Global Security (as defined
herein). Payments on Subordinated Debt Securities issued as a Global Security
will be made to DTC, a successor depositary or, in the event that no depositary
is used, to a Paying Agent for the Subordinated Debt Securities.
SUBORDINATION
The Indenture provides that the Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness (as
defined herein) of the Company. Upon any distribution of assets of the Company
to creditors upon any dissolution, winding-up, liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all principal, premium, if any, and interest due or to become
due on all Senior Indebtedness of the Company must be paid in full before the
holders of Subordinated Debt Securities are entitled to receive or retain any
payment. Upon satisfaction of all claims of all Senior Indebtedness then
outstanding, the rights of the holders of the Subordinated Debt Securities will
be subrogated to the rights of the holders of Senior Indebtedness of the Company
to receive payments or distributions applicable to Senior Indebtedness until all
amounts owing on the Subordinated Debt Securities are paid in full.
In addition, no payment of principal, premium, if any, or interest on the
Subordinated Debt Securities may be made in the event and during the
continuation of any default in payment of any Senior Indebtedness or if any
event of default shall exist under any Senior Indebtedness, as 'event of
default' is defined therein or in the agreement under which the same is
outstanding.
The term 'Senior Indebtedness' means, with respect to the Company, (a) all
indebtedness of the Company (including indebtedness of others guaranteed by the
Company), other than the subordinated Debt Securities (as defined in the
Indenture) and any appurtenant Coupons (as defined in the
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Indenture) that (i) is for money borrowed, (ii) arises in connection with the
acquisition of any business, properties, securities or assets of any kind, other
than in the ordinary course of the Company's business as theretofore conducted
or (iii) is secured, in whole or in part, by real or personal property, (b)
obligations of the Company (including obligations of others guaranteed by the
Company) as lessee under leases required to be capitalized on the balance sheet
of the lessee under generally accepted accounting principles and leases of
property or assets made as part of any sale and lease-back transaction and (c)
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation, except for (1) any such indebtedness that is by its
terms subordinated to or pari passu with the Subordinated Debt Securities and
(2) any indebtedness between or among the Company or its affiliates, including
all other debt securities and guarantees in respect of those debt securities
issued to any trust, or a trustee of such trust, partnership or other entity
affiliated with the Company that is a financing vehicle of the Company (a
'financing entity') in connection with the issuance by such financing entity of
Preferred Securities or other securities that rank pari passu with, or junior
to, the Preferred Securities. Such Senior Indebtedness shall continue to be
Senior Indebtedness and be entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company. As of March 31, 1996, the aggregate principal
amount of Senior Indebtedness outstanding was $ billion, consisting of the
following: $ billion of term debt, $ billion in commercial paper and
$ billion in other short-term borrowings.
OPTIONAL REDEMPTION BY THE COMPANY
The Company shall have the right to redeem the Subordinated Debt
Securities, in whole (but not in part), at any time on or after ,
2001 upon not less than 30 nor more than 60 days' notice on any Payment Date, at
a redemption price of par plus any accrued and unpaid interest, including
Additional Interest (as defined herein), if any, to the date of redemption (the
'Subordinated Debt Redemption Price'). Notwithstanding the foregoing, after the
settlement of the Purchase Contracts on the Purchase Date (or a related Delayed
Purchase Date), the right of the Company to redeem any Subordinated Debt
Securities that remain outstanding after such date will be postponed or
suspended until the fifth anniversary of such date. See 'Description of the
Units--Description of the Purchase Contracts--Acceleration of Purchase.'
The Company may also redeem the Subordinated Debt Securities, at any time
in certain circumstances upon the occurrence of a Tax Event as described under
'Description of the Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution,' upon not less than 30 nor more than 60 days'
notice, at the Subordinated Debt Redemption Price.
REDEMPTION AT THE OPTION OF THE HOLDER
The Property Trustee, as holder of the Subordinated Debt Securities, will
have the right to require the Company to redeem all or a portion of the
Subordinated Debt Securities held by the Property Trustee (the 'Subordinated
Debt Put Option') on the Initial Put Option Exercise Date at the Subordinated
Debt Redemption Price and will be paid by the Company in immediately available
funds, subject to certain conditions. In addition, after the settlement of the
Purchase Contracts on an Early Purchase Date (or a related Delayed Purchase
Date), the Property Trustee, as holder of any Subordinated Debt Securities that
remain outstanding after such date, will have a Subordinated Debt Put Option
with respect to Subordinated Debt Securities held by the Property Trustee on the
Fifth Anniversary Put Option Exercise Date at the Subordinated Debt Redemption
Price and will be paid by the Company in immediately available funds, subject to
certain conditions. However, the Company may not redeem fewer than all of the
outstanding Subordinated Debt Securities on a Put Option Exercise Date unless
all accrued and unpaid interest has been paid on all Subordinated Debt
Securities for all quarterly interest periods on or prior to such Put Option
Exercise Date.
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The Property Trustee, as holder of the Subordinated Debt Securities, must
provide the Company with notice of its intention to exercise the Subordinated
Debt Put Option (a) prior to 12:00 noon, New York City time, on the Initial Put
Option Exercise Date or (b) not less than 25 days nor more than 60 days prior to
the Fifth Anniversary Put Option Exercise Date. Any notice of exercise by the
Property Trustee shall state (i) if applicable, the certificate number(s) of the
Subordinated Debt Securities to be delivered by the Property Trustee for
redemption by the Company and (ii) that such Subordinated Debt Securities are to
be redeemed pursuant to the applicable provisions of the Subordinated Debt
Securities. The Indenture Trustee will provide a copy of the required form of
optional redemption notice upon request.
The Company will comply with the provisions of Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Exchange Act if required and will file
Schedule 13E-4 or any other schedule if required thereunder in connection with
any offer by the Company to purchase the Subordinated Debt Securities.
Payment of the Subordinated Debt Redemption Price to the Property Trustee,
as holder of the Subordinated Debt Securities for which a notice of exercise has
been delivered, is conditioned upon delivery of such Subordinated Debt
Securities to the Indenture Trustee on the Put Option Exercise Date. Once so
delivered, payment of the Subordinated Debt Redemption Price to the Property
Trustee will be made by wire transfer of immediately available funds on the Put
Option Exercise Date in an amount equal to the aggregate Subordinated Debt
Redemption Price of the Subordinated Debt Securities that are subject to the
relevant notice of exercise. If the Indenture Trustee holds immediately
available funds sufficient to pay the Subordinated Debt Redemption Price of such
Subordinated Debt Securities, then, immediately prior to the close of business
on the Put Option Exercise Date, such Subordinated Debt Securities will cease to
be outstanding and interest thereon will cease to accrue, whether or not such
Subordinated Debt Securities are delivered to the Indenture Trustee, and all
other rights of the holder in respect of the Subordinated Debt Securities,
including the Property Trustee's right to require the Company to redeem such
Subordinated Debt Securities, shall terminate and lapse (other than the right to
receive the Subordinated Debt Redemption Price in immediately available funds by
wire transfer upon delivery of such Subordinated Debt Securities).
If a Put Default shall occur and continue for more than two Business Days
following an Initial Put Option Exercise Date, and the Purchase Date is an Early
Purchase Date, then (a) any notice of exercise for such Subordinated Debt Put
Option will be rescinded and annulled automatically and (b) any payments
received by the Property Trustee from the redemption of the Subordinated Debt
Securities will be returned to the Company.
The rescission of any notice of exercise for a Subordinated Debt Put Option
will not prevent the Property Trustee, as holder of the Subordinated Debt
Securities, from giving a notice of exercise at a later date.
MATURITY DATE
The maturity date of the Subordinated Debt Securities is ,
2026.
INTEREST
Each Subordinated Debt Security shall bear interest at the rate of %
per annum from the original date of issuance, payable quarterly in arrears on
each Payment Date, commencing 1996, to the person in whose name such
Subordinated Debt Security is registered, at the close of business on the
fifteenth day immediately preceding such Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any Payment Date falls on a day that is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if
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such Business Day is in the next succeeding calendar year, then such payment
shall be made on the immediately preceding Business Day, with the same force and
effect as if made on such Payment Date.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional interest ('Additional Interest')
such additional amounts as shall be required so that the net amounts received
and retained by the Trust after paying any such taxes, duties, assessments or
other governmental charges will be not less than the amounts the Trust would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
CERTAIN COVENANTS
In the Indenture, the Company has covenanted that, so long as any
Subordinated Debt Securities are outstanding, if (i) there shall have occurred
and be continuing an event that, with the giving of notice or the lapse of time
or both, would constitute an Event of Default or (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee, then
the Company will not (a) declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, except for dividends or distributions in
shares of its capital stock of the same class on which such dividend or
distribution is being paid and conversions or exchanges of common stock of one
class into common stock of another class or (b) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the
Subordinated Debt Securities (except by conversion into or exchange for shares
of its capital stock and except for a redemption, purchase or other acquisition
of shares of its capital stock made for the purpose of an employee incentive
plan or benefit plan of the Company or any of its subsidiaries).
For so long as the Trust Securities remain outstanding, the Company has
agreed to (i) directly or indirectly maintain 100% ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Company under the Indenture may succeed to the Company's ownership of such
Common Securities and (ii) use its reasonable efforts to cause the Trust to (x)
remain a statutory business trust, except in connection with the distribution of
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities of the Trust or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration and (y) otherwise continue to be classified as a grantor trust for
United States Federal income tax purposes.
RESTRICTIONS
The Indenture provides that the Company shall not consolidate with or merge
into any other corporation or person, or, directly or indirectly, convey,
transfer or lease all or substantially all of the properties and assets of the
Company on a consolidated basis to any person, unless either the Company is the
continuing corporation or such corporation or person expressly assumes by
supplemental indenture all the obligations of the Company under the Indenture
and the Subordinated Debt Securities, no default or Event of Default under the
Indenture shall exist immediately after the transaction, the Trust shall not
fail to be classified as a grantor trust for United States Federal income tax
purposes as a result of the transaction and the surviving corporation or such
person is a corporation, partnership or trust organized and validly existing
under the laws of the United States of America, any state thereof or the
District of Columbia.
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes an 'Event of Default'
with respect to the Subordinated Debt Securities: (i) failure for 30 days to pay
interest on the Subordinated Debt Securities, including any Additional
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Interest in respect thereof, when due; or (ii) failure to pay principal of or
premium, if any, on the Subordinated Debt Securities when due whether at
maturity, upon redemption, by declaration or otherwise; provided, however, that
a valid extension of the time for redemption shall not constitute a default for
this purpose; or (iii) failure by the Company to observe or perform any other
covenant contained in the Indenture for 90 days after notice to the Company by
the Trustee or by the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Debt Securities; or (iv) the dissolution,
winding up or termination of the Trust, except in connection with (x) the
distribution of Subordinated Debt Securities to the holders of Preferred
Securities upon the occurrence of a Tax Event, Investment Company Event or
liquidation of the Trust, (y) the redemption of all the Trust Securities at the
Redemption Price or (z) in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration; or (v) certain events of bankruptcy,
insolvency or reorganization of the Company.
The Indenture Trustee or the holders of not less than 25% in aggregate
principal amount of the outstanding Subordinated Debt Securities may declare the
principal of and interest (including any Additional Interest) on the
Subordinated Debt Securities due and payable immediately on the occurrence of an
Event of Default; provided, however, that, after such acceleration, but before a
judgment or decree based on acceleration, the holders of a majority in aggregate
principal amount of outstanding Subordinated Debt Securities may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the nonpayment of accelerated principal, have been cured or waived as
provided in the Indenture. For information as to waiver of defaults, see
'Modification of the Indenture.'
A default under any other indebtedness of the Company or the Trust would
not constitute an Event of Default under the Subordinated Debt Securities.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee in case an Event of Default occurs and is continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of
Subordinated Debt Securities, unless such holders shall have offered to the
Indenture Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Indenture Trustee, the holders of a majority in aggregate
principal amount of the outstanding Subordinated Debt Securities will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or exercising any trust or power
conferred on the Indenture Trustee.
No holder of any Subordinated Debt Security will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such holder shall have previously given to the Indenture
Trustee written notice of a continuing Event of Default and unless the holders
of at least 25% in aggregate principal amount of the outstanding Subordinated
Debt Securities shall also have made written request, and offered reasonable
indemnity, to the Indenture Trustee to institute such proceeding as Indenture
Trustee, and the Indenture Trustee shall not have received from the holders of a
majority in aggregate principal amount of the outstanding Subordinated Debt
Securities a direction inconsistent with such request. However, such limitations
do not apply to a suit instituted by a holder of Subordinated Debt Securities
for enforcement of payment of the principal of or interest (including any
Additional Interest), on such Subordinated Debt Security on or after the
respective due dates expressed in such Subordinated Debt Security.
The holders of a majority in aggregate principal amount of the outstanding
Subordinated Debt Securities may, on behalf of the holders of all the
Subordinated Debt Securities, waive any past default, except a default in the
payment of principal, premium, if any, or interest (including any Additional
Interest) on the Subordinated Debt Securities. The Property Trustee is the
initial holder of the Subordinated Debt Securities. However, while any of the
Preferred Securities are outstanding, the Indenture does not permit the waiver
of any Event of Default with respect to the Subordinated Debt Securities without
the consent of holders of 66-2/3% in aggregate Stated Amount of the Preferred
Securities then outstanding. The Company is required to file annually with the
Indenture Trustee and
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the Property Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants under the Indenture.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Indenture
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Subordinated Debt Securities, to
modify the Indenture or the rights of the holders of Subordinated Debt
Securities; provided, however, that no such modification may, without the
consent of the holder of each outstanding Subordinated Debt Security affected
thereby, (i) extend the stated maturity of the Subordinated Debt Securities or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, or adversely affect the subordination provisions of the Indenture or
(ii) reduce the percentage in aggregate principal amount of outstanding
Subordinated Debt Securities, the holders of which are required to consent to
any such supplemental indenture.
In addition, the Company and the Indenture Trustee may execute, without the
consent of any holder of Subordinated Debt Securities, any supplemental
indenture to cure any ambiguities, comply with the Trust Indenture Act and for
certain other customary purposes.
GOVERNING LAW
The Indenture and the Subordinated Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Subordinated Debt Securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Indenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with a
liquidation of the Trust, the Subordinated Debt Securities will be issued in the
form of one or more global certificates (each a 'Global Security') registered in
the name of DTC or Cede & Co. (DTC's nominee). Except under the limited
circumstances described below, Subordinated Debt Securities represented by the
Global Security will not be exchangeable for, and will not otherwise be issuable
as, Subordinated Debt Securities in definitive form. The Global Securities
described above may not be transferred except 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 to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in a Global
Security.
Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debt Securities shall be exchangeable, except
for another Global
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Security of like denomination and tenor to be registered in the name of DTC or
Cede & Co., or to a successor depositary or its nominee. Accordingly, each
Beneficial Owner must rely on the procedures of DTC or if such person is not a
Participant, on the procedures of the Participant through which such person owns
its interest, to exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Subordinated Debt Securities. For a description
of DTC and the specific terms of the depositary arrangements, see 'Description
of the Units--Book-Entry System.' As of the date of this Prospectus, the
descriptions herein of DTC's book-entry system and DTC's practices as they
relate to purchases, transfers, notices and payments with respect to the Units
apply in all material respects to any debt obligations represented by one or
more Global Securities held by DTC. The Company may appoint a successor to DTC
or any successor depositary in the event DTC or such successor depositary is
unable or unwilling to continue as a depository for the Global Securities.
None of the Company, the Trust, the Indenture Trustee, any paying agent and
any other agent of the Company or the Indenture Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
representing such Subordinated Debt Securities or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the depositary or its nominee only
if (i) the depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) the Company, in its sole discretion,
determines that such Global Security shall be so exchangeable or (iv) there
shall have occurred an Event of Default with respect to such Subordinated Debt
Securities. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Subordinated Debt Securities registered in
such names as the depositary shall direct. It is expected that such instructions
will be based upon directions received by the depositary from its Participants
with respect to ownership of beneficial interests in such Global Security.
MISCELLANEOUS
The Indenture will provide that the Company will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Subordinated Debt
Securities, (ii) the organization, maintenance and dissolution of the Trust,
(iii) the retention of the Company Trustees and (iv) the enforcement by the
Property Trustee of the rights of the holders of the Preferred Securities. The
payment of such fees and expenses will be fully and unconditionally guaranteed
by the Company.
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EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED
DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, and to invest the proceeds from such issuance and sale in the
Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Subordinated Debt Securities will
be equal to the sum of the aggregate Stated Amount of the Trust Securities; (ii)
the interest rate and the interest and other payment dates on the Subordinated
Debt Securities will match the distribution rate and distribution and other
payment dates for the Preferred Securities; (iii) the Company shall pay all, and
the Trust shall not be obligated to pay, directly or indirectly, any, costs and
expenses of the Trust; and (iv) the Declaration further provides that the
Regular Trustees shall not cause or permit the Trust to, among other things,
engage in any activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by the Company as and to the extent set forth under
'Description of the Guarantee.'
If the Company does not make interest payments on the Subordinated Debt
Securities purchased by the Trust, it is expected that the Trust will not have
sufficient funds to pay distributions on the Preferred Securities. The Guarantee
is a full and unconditional guarantee from the time of its issuance but does not
apply to any payment of distributions unless and until the Trust has sufficient
funds for the payment of such distributions.
If the Company fails to make interest or other payments on the Subordinated
Debt Securities when due, the Declaration provides a mechanism whereby the
holders of the Preferred Securities may (i) appoint a Special Regular Trustee
and (ii) direct the Property Trustee to enforce its rights under the
Subordinated Debt Securities. If the Property Trustee fails to enforce its
rights under the Subordinated Debt Securities, a holder of Preferred Securities
may, after a period of 30 days has elapsed from such holder's written request to
the Property Trustee to enforce such rights, institute a legal proceeding
against the Company to enforce the Property Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. The Company, under
the Guarantee, acknowledges that the Guarantee Trustee shall enforce the
Guarantee on behalf of the holders of the Preferred Securities.
If the Company fails to make payments under the Guarantee, the Guarantee
provides a mechanism whereby the holders of the Preferred Securities may direct
the Guarantee Trustee to enforce its rights thereunder. If the Guarantee Trustee
fails to enforce the Guarantee, any holder of Preferred Securities may, after a
period of 30 days has elapsed from such holder's written request to the
Guarantee Trustee to enforce the Guarantee, institute a legal proceeding
directly against the Company to enforce the Guarantee Trustee's rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The procedures whereby Unitholders may exercise certain rights under the
Declaration and the Guarantee are described in 'Description of the
Units--Certain Rights of Unitholders with respect to Preferred Securities.'
The above mechanisms and obligations, taken together, are substantially
equivalent to a full and unconditional guarantee by the Company of payments due
on the Preferred Securities. See 'Description of the Guarantee--General' and
'Description of the Subordinated Debt Securities-- Events of Default.'
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DESCRIPTION OF THE SERIES F PREFERRED STOCK
The description of certain provisions of the Series F Preferred Stock set
forth below does not purport to be complete and is subject to and qualified in
its entirety by reference to the Company's Certificate of Incorporation (as
amended) and the Certificate of Designations relating to the Series F Preferred
Stock, both of which are filed as an exhibit to or incorporated by reference in
the Registration Statement of which this Prospectus forms a part.
GENERAL
As of the date of this Prospectus, the Company is authorized by its
Certificate of Incorporation (as amended) to issue 5,000,000 shares of preferred
stock, without par value, which may be issued from time to time in one or more
series and, subject to the provisions of the Certificate of Incorporation
applicable to all series of preferred stock, shall have such designations,
voting powers, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as
shall be stated in the resolution or resolutions providing for the issue thereof
adopted by the Company's Board of Directors (the 'Board of Directors') or a duly
authorized committee thereof. As of the date of this Prospectus, there are
560,000 shares of the Company's Series A Cumulative Convertible Preferred Stock,
225,000 shares of the Company's 9.50% Cumulative Preferred Stock, Series C,
400,000 shares of the Company's 8.08% Cumulative Preferred Stock, Series D and
500,000 shares of the Company's 8.40% Cumulative Preferred Stock, Series E
outstanding. The Series A Cumulative Convertible Preferred Stock, the 9.50%
Cumulative Preferred Stock, Series C, the 8.08% Cumulative Preferred Stock,
Series D, and the 8.40% Cumulative Preferred Stock, Series E, rank on a parity
as to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up. There are currently reserved for issuance up to
2,500,000 shares of Series B Junior Participating Preferred Stock of the
Company, which shares are issuable upon the exercise of certain preferred share
purchase rights (collectively, the 'Rights'). The Rights will become exercisable
only if a person or group acquires or (unless exercisability is delayed by the
Board of Directors) announces an offer to acquire 20% or more (which percentage
may be reduced to not less than 10% by the Board of Directors prior to the time
the Rights become exercisable) of the outstanding shares of Common Stock (as
defined herein) of the Company. Shares of Series B Junior Participating
Preferred Stock issued upon the exercise of the Rights will rank junior to all
shares of any other class of the Company's preferred stock, including the Series
F Preferred Stock, with respect to the payment of dividends and the distribution
of assets upon liquidation, dissolution or winding up.
Pursuant to action of the Board of Directors or a duly authorized committee
thereof, the shares of Series F Preferred Stock represented by the Depositary
Shares constitute a single series of preferred stock. The Series F Preferred
Stock will not be convertible into Common Stock or shares of any other class or
series of stock of the Company. The Series F Preferred Stock will, when issued
in accordance with the terms of the Purchase Contracts, be fully paid and
nonassessable. The Series F Preferred Stock will have no preemptive rights to
subscribe for any additional securities which may be issued by the Company.
is the registrar, transfer agent and dividend disbursing agent
for the shares of Series F Preferred Stock.
RANK
As of the date of this Prospectus, the Series F Preferred Stock would rank
as to payment of dividends and distribution of assets upon dissolution,
liquidation or winding up of the Company on a parity with each other outstanding
series of preferred stock of the Company and prior to the Common Stock, $1.00
par value, of the Company (the 'Common Stock') and, when and if issued, to
shares of Series B Junior Participating Preferred Stock.
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DIVIDENDS AND DISTRIBUTIONS
The holders of shares of Series F Preferred Stock, before any dividends may
be declared or paid to the holders of shares of the Common Stock or of any other
capital stock of the Company ranking junior to the Series F Preferred Stock as
to the payment of dividends, will be entitled to receive, when and as declared
by the Board of Directors out of net profits or net assets of the Company
legally available for the payment of dividends, cumulative cash dividends at the
annual rate of % of the liquidation preference per share of Series F
Preferred Stock (equivalent to $ per annum per share of Series F
Preferred Stock), and no more, in equal quarterly payments (rounded down to the
nearest cent) on each Payment Date, commencing on the first Payment Date
following the date of issuance of the Series F Preferred Stock. Dividends will
be payable to the holders of record at the close of business on the fifteenth
day (whether or not a business day) immediately preceding a Payment Date or such
other date, no more than 60 days prior to a Payment Date, as may be determined
by the Board of Directors or a duly authorized committee thereof.
Dividends payable on the Series F Preferred Stock will begin to accrue and
be cumulative from the date of original issue. The amount of dividends payable
for any period shorter than a full quarterly dividend period will be determined
on the basis of twelve 30-day months and a 360-day year. Accrued but unpaid
dividends will not bear interest. Dividends paid on the shares of Series F
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable will be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
Whenever quarterly dividends payable on shares of Series F Preferred Stock
are in arrears, thereafter and until all accrued and unpaid dividends, whether
or not declared, on the outstanding shares of Series F Preferred Stock have been
paid in full or declared and set apart for payment, the Company will not: (i)
declare or pay dividends, or make any other distributions, on any shares of
Common Stock or other capital stock ranking junior (either as to payment of
dividends or distribution of assets upon liquidation, dissolution or winding up)
to the Series F Preferred Stock ('Junior Stock'), other than dividends or
distributions payable in Junior Stock; (ii) declare or pay dividends, or make
any other distributions, on any shares of capital stock ranking on a parity
(either as to payment of dividends or distribution of assets upon liquidation,
dissolution or winding up) with the Series F Preferred Stock ('Parity Stock'),
other than dividends or distributions payable in Junior Stock, and other than
dividends paid ratably on the Series F Preferred Stock and all Parity Stock on
which dividends are payable or in arrears, in proportion to the total amounts to
which the holders of all such shares are then entitled; (iii) redeem or purchase
or otherwise acquire for consideration any shares of Junior Stock, provided that
the Company may at any time redeem, purchase or otherwise acquire any shares of
Junior Stock in exchange for shares of Junior Stock; or (iv) redeem or purchase
or otherwise acquire for consideration any shares of Series F Preferred Stock or
Parity Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series or classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
LIQUIDATION RIGHTS
Upon any liquidation, dissolution or winding up of the Company, no
distribution will be made (i) to the holders of shares of Junior Stock, unless,
prior thereto, the holders of shares of Series F Preferred Stock shall have
received $500 per share, plus an amount per share equal to all accrued but
unpaid dividends thereon, whether or not declared, to the date of such payment
or (ii) to the holders of shares of Parity Stock, except distributions made
ratably on the Series F Preferred Stock and all such Parity Stock, in proportion
to the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. After payment of the full amount of
the liquidating distribution to which holders of the Series F Preferred Stock
are entitled, such holders will have no right or claim to any of the remaining
assets of the Company.
Neither the consolidation, merger or other business combination of the
Company with or into any other individual, firm, corporation or other entity nor
the sale, lease, exchange or conveyance of all or
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any part of the property, assets or business of the Company will be deemed to be
a liquidation, dissolution or winding up of the Company.
REDEMPTION
The shares of the Series F Preferred Stock will not be redeemable by the
Company prior to the later of , 2001, and the date of issue of
the Series F Preferred Stock. The Company, at its option, may redeem its shares
of Series F Preferred Stock, as a whole or in part, at any time or from time to
time on or after the later of , 2001, and the date of issue of
the Series F Preferred Stock at a price of $500 per share, plus an amount per
share equal to all accrued but unpaid dividends thereon, whether or not
declared, to the date fixed for redemption.
Notice of any redemption of Series F Preferred stock at the option of the
Company shall be given by publication in a newspaper of general circulation in
the Borough of Manhattan, The City of New York, such publication to be made not
less than 30 nor more than 60 days prior to the redemption date. A similar
notice will be mailed by the Company or its agent, postage prepaid, not less
than 30 nor more than 60 days prior to such redemption date, addressed to the
respective holders of record of shares of Series F Preferred Stock at the
addresses shown on the stock transfer records of the Company's transfer agent,
but the mailing of such notice will not be a condition of such redemption. In
order to facilitate the redemption of shares of Series F Preferred Stock, the
Board of Directors may fix a record date for the determination of shares of
Series F Preferred Stock to be redeemed, and such record date will be not more
than 60 days nor less than 30 days prior to the redemption date.
Prior to or on the redemption date, the Company will deposit money for the
payment of the redemption price with or another bank or trust
company doing business in the Borough of Manhattan, The City of New York, and
having a capital and surplus of at least $10,000,000. Unless the Company fails
to make such deposit, on the redemption date, all dividends on the Series F
Preferred Stock will cease to accrue and all rights of the holders of Series F
Preferred Stock as stockholders of the Company shall cease, except the right to
receive the redemption price (but without interest). Any monies so deposited
which remain unclaimed by the holders of such Series F Preferred Stock at the
end of six years after the redemption date will become the property of, and be
paid by such bank or trust company to, the Company.
VOTING RIGHTS
Holders of the Series F Preferred Stock will have no voting rights except
as set forth below or as otherwise from time to time required by law.
If on any date a total of six quarterly dividends on the Series F Preferred
Stock have fully accrued but have not been paid in full, the holders of shares
of Series F Preferred Stock, together with the holders of all other then
outstanding shares of any series or class of preferred stock of the Company as
to which series or class a total of six quarterly dividends have fully accrued
but have not been paid in full and which series or class is entitled to the
rights described in this paragraph (collectively, 'Defaulted Preferred Stock'),
will have the right, voting together as a class, to elect two directors to the
Board of Directors. Such right of the holders of Defaulted Preferred Stock to
vote for the election of such two directors may be exercised at any annual
meeting or at any special meeting called for such purpose as hereinafter
provided or at any adjournment thereof, or by the written consent, delivered to
the Secretary of the Company, of the holders of a majority of all outstanding
shares of Defaulted Preferred Stock, until dividends in default on the
outstanding shares of Defaulted Preferred Stock have been paid in full (or such
dividends have been declared and funds sufficient therefor set apart for
payment), at which time the term of office of the two directors so elected will
terminate automatically. So long as such right to elect two directors continues
(and unless such right has been exercised by written consent of the holders of a
majority of the outstanding shares of Defaulted Preferred Stock), the Secretary
of the Company may call, and upon the written request of the holders of record
of a majority of the outstanding shares of Defaulted Preferred Stock addressed
to him at the principal office of the Company will be required to call, a
special meeting of the holders of such shares for election of such two
directors. Such meeting will be held within 30 days after delivery of such
request to the Secretary, at the place and upon
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the notice provided by law and in the Company's By-laws for the holding of
meetings of stockholders. No such special meeting or adjournment thereof shall
be held on a date less than 30 days before an annual meeting of stockholders or
any special meeting in lieu thereof. If at any such annual or special meeting or
any adjournment thereof the holders of a majority of the then outstanding shares
of Defaulted Preferred Stock entitled to vote in such election are present or
represented by proxy, or if the holders of a majority of the outstanding shares
of Defaulted Preferred Stock have acted by written consent in lieu of a meeting,
then the authorized number of directors will be increased by two, and the
holders of the Defaulted Preferred Stock will be entitled to elect the two
additional directors. Directors so elected will serve until the next annual
meeting or until their successors are elected and qualify, unless the term of
office of the persons so elected as directors has terminated under the
circumstances described in the second sentence of this paragraph. In case of any
vacancy occurring among the directors elected by the holders of the Defaulted
Preferred Stock as a class, the remaining director who has been so elected may
appoint a successor to hold office for the unexpired term of the director whose
place is vacant. If both directors so elected by the holders of Defaulted
Preferred Stock as a class cease to serve as directors before their terms
expire, the holders of the Defaulted Preferred Stock then outstanding and
entitled to vote for such directors may, by written consent as described above,
or at a special meeting of such holders called as described above, elect
successors to hold office for the unexpired terms of the directors whose places
are vacant.
So long as any shares of Series F Preferred Stock are outstanding, without
first obtaining the consent or approval of the holders of at least two-thirds of
the number of the then outstanding shares of Series F Preferred Stock and all
other series of the Company's preferred stock (the Series F Preferred Stock and
such other series of preferred stock collectively, the 'Outstanding Preferred
Stock'), voting as a single class, given in person or by proxy at a meeting at
which the holders of such shares are entitled to vote separately as a class, the
Company will not: (i) authorize shares of any class or series of stock having
any preference or priority as to dividends or upon liquidation ('Senior Stock')
over the Outstanding Preferred Stock; (ii) reclassify any shares of stock of the
Company into shares of Senior Stock; (iii) authorize any security exchangeable
for, convertible into or evidencing the right to purchase any shares of Senior
Stock; (iv) amend, alter or repeal the Certificate of Incorporation to alter or
change the preferences, rights or powers of the Outstanding Preferred Stock so
as to affect the Outstanding Preferred Stock adversely unless any such
amendment, alteration or repeal would alter or change the preferences, rights or
powers of one or more, but not all, of the series of the Outstanding Preferred
Stock at the time outstanding, in which case the consent or approval of the
holders of at least two-thirds of the number of the outstanding shares of each
such series so affected will be required in lieu of (or if such consent is
required by law, in addition to) the consent or approval of the holders of at
least two-thirds of the number of outstanding shares of Outstanding Preferred
Stock voting as a class; or (v) effect the voluntary liquidation, dissolution or
winding up of the Company, or the sale, lease or exchange of all or
substantially all of the assets, property or business of the Company, or the
merger or consolidation of the Company with or into any other corporation
(except a wholly owned subsidiary of the Company); provided, however, that no
separate vote of the holders of the Outstanding Preferred Stock as a class will
be required in the case of a merger or consolidation or a sale, exchange or
conveyance of all or substantially all of the assets, property or business of
the Company (such transactions being referred to as a 'reorganization') if (A)
the resulting, surviving or acquiring corporation after such reorganization will
have no stock either authorized or outstanding (except such stock of the Company
as may have been authorized or outstanding immediately preceding such
reorganization, or such stock of the resulting, surviving or acquiring
corporation as may be issued in exchange therefor) ranking prior to, or on a
parity with, the Outstanding Preferred Stock or the stock of the resulting,
surviving or acquiring corporation issued in exchange therefor and (B) each
holder of shares of Outstanding Preferred Stock immediately preceding such
reorganization will receive in exchange therefor the same number of shares of
stock, with substantially the same preferences, rights and powers, of the
resulting, surviving or acquiring corporation.
Unless the Company obtains the consent or approval of the holders of a
majority of shares of the Outstanding Preferred Stock, given in person or by
proxy at a meeting at which the holders of such shares are entitled to vote
separately as a class, the Company may not amend the provisions of the
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Certificate of Incorporation in order to increase the amount of the authorized
preferred stock or to authorize any other stock ranking prior to or on a parity
with the Outstanding Preferred Stock either as to payment of dividends or
distribution of assets upon liquidation, dissolution or winding up.
Each share of Series F Preferred Stock will be entitled to one vote on
matters on which holders of the Series F Preferred Stock are entitled to vote.
Since each share of Outstanding Preferred Stock will be entitled to one vote,
the voting power of Series F Preferred Stock on matters on which holders of such
series and holders of other series of Outstanding Preferred Stock are entitled
to vote as a single class will depend on the number of outstanding shares of
Outstanding Preferred Stock, not the aggregate liquidation preference or initial
offering price of the shares of such series.
DESCRIPTION OF THE DEPOSITARY SHARES
The description of certain provisions of the Depositary Shares set forth
below does not purport to be complete and is subject to and qualified in its
entirety by reference to the Deposit Agreement referred to below, the form of
which (including the form of Depositary Receipt (as defined herein)) is filed as
an exhibit or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
Each Depositary Share represents a one-twentieth interest in a share of
Series F Preferred Stock. The shares of Series F Preferred Stock underlying the
Depositary Shares will be deposited with , as Depositary (the
'Depositary') under a Deposit Agreement (the 'Deposit Agreement') among the
Company, the Depositary and the holders from time to time of the depositary
receipts issued by the Depositary thereunder (the 'Depositary Receipts'). The
Depositary Receipts so issued will evidence the Depositary Shares. Subject to
the terms of the Deposit Agreement, each owner of a Depositary Share will be
entitled through the Depositary, in proportion to the one-twentieth interest in
a share of Series F Preferred Stock underlying such Depositary Share, to all
rights and preferences of a share of Series F Preferred Stock (including
dividend, voting, redemption and liquidation rights). Since each share of Series
F Preferred Stock entitles the holder thereof to one vote on matters on which
the Series F Preferred Stock is entitled to vote, each Depositary Share will, in
effect, entitle the holder thereof to one-twentieth of a vote thereon, rather
than one full vote. The principal office of the Depositary is currently located
at , New York, New York.
will be the transfer agent and registrar for
the Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Series F Preferred Stock to the record
holders of Depositary Shares in proportion to the numbers of such Depositary
Shares owned by such holders on the relevant record date. The Depositary will
distribute only such amount, however, as can be distributed without attributing
to any holder of Depositary Shares a fraction of one cent, and any balance not
so distributable will be held by the Depositary (without liability for interest
thereon) and will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Receipts then
outstanding.
In the event of a distribution other than in cash in respect of the Series
F Preferred Stock deposited under the Deposit Agreement, the Depositary will
distribute the property received by it to the record holders of the Depositary
Shares entitled thereto, in proportion, as nearly as may be practicable, to the
numbers of Depositary Shares owned by such holders on the relevant record date.
If, however, the Depositary determines that it is not feasible to make such
distribution, the Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable to effect such distribution,
including the sale of such property and distribution of the net proceeds from
such sale to such holders.
REDEMPTION OF DEPOSITARY SHARES
The Depositary Shares will be redeemed from the proceeds received by the
Depositary as a result of any redemption of the Series F Preferred Stock held by
the Depositary. Whenever the Company redeems shares of Series F Preferred Stock
held by the Depositary, the Depositary will redeem as of
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the same redemption date the number of Depositary Shares representing the shares
of Series F Preferred Stock so redeemed. The Depositary will mail the notice of
redemption not less than 20 and not more than 50 days prior to the date fixed
for redemption to the record holders of the Depositary Shares to be so redeemed.
The redemption price per Depositary Share will be equal to $25.00 per Depositary
Share plus accrued but unpaid dividends on the Series F Preferred Stock. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
Notice of redemption having been given as described above, from and after
the date fixed for redemption, unless the Company shall have failed to redeem
the shares of Series F Preferred Stock so called for redemption, the Depositary
shares so called for redemption will no longer be deemed to be outstanding, and
all rights of the holders of such Depositary Shares will cease, except for the
right to receive the monies payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon such
redemption, upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING RIGHTS
As soon as practicable after receipt of notice of any meeting at which the
holders of the Series F Preferred Stock are entitled to vote, the Depositary
will mail the information contained in such notice of meeting to the holders of
the Depositary Shares as of the record date for such meeting. Each such record
holder of Depositary Shares will be entitled, subject to any applicable
restrictions, to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of the Series F Preferred Stock represented by such
record holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the amount of the Series F Preferred Stock represented by
such Depositary Shares in accordance with any such instructions, and the Company
will agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
shares of the Series F Preferred Stock deposited under a Deposit Agreement to
the extent that it does not receive specific instructions from the holders of
Depositary Shares representing such Preferred Stock.
WITHDRAWAL OF STOCK
Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption), and subject to the terms of the Deposit Agreement, the owner of the
Depositary Shares evidenced thereby is entitled to delivery of whole shares of
Series F Preferred Stock and all money and other property, if any, represented
by such Depositary Shares. Partial shares of Series F Preferred Stock will not
be issued. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of Series F Preferred Stock to be withdrawn, the
relevant Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. Holders
of shares of Series F Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Shares therefor. The Company does not expect that there will be any
public trading market for the Series F Preferred Stock, except as represented by
the Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary. However, any
amendment which materially and adversely alters the rights of the existing
holders of Depositary Shares will not be effective unless such amendment has
been approved by the holders of at least a majority of the Depositary Shares
then outstanding under the Deposit Agreement. The Deposit Agreement provides
that each holder of Depositary Shares at the time any such amendment becomes
effective which continues to hold such Depositary Shares will be deemed to have
consented to such amendment and will be bound thereby. No such amendment may
impair the rights, subject to the terms of the Deposit Agreement, of any owner
of any Depositary Shares issued
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under the Deposit Agreement to surrender the Depositary Receipt evidencing such
Depositary Shares with instructions to the Depositary to deliver to the holder
the whole shares of Series F Preferred Stock represented by such Depositary
Shares and all money and other property, if any, represented thereby, except in
order to comply with mandatory provisions of applicable law. The Deposit
Agreement may be terminated by the Company or the Depositary only if (i) all
outstanding Depositary Shares relating thereto have been redeemed or (ii) there
has been a final distribution in respect of the Series F Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distribution has been distributed to the holders of the Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Series F Preferred Stock and the initial issuance of the Depositary Shares and
any redemption of the Series F Preferred Stock. Holders of Depositary Shares
will pay other transfer and other taxes and governmental charges and certain
other charges as are provided in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of the Depositary Shares all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders of the
Series F Preferred Stock. In addition, the Depositary will make available for
inspection by holders of the Depositary Shares at the principal office of the
Depositary, and at such other places as it may from time to time deem advisable,
any reports and communications received from the Company which are received by
the Depositary as the holder of the Series F Preferred Stock.
Neither the Depositary nor the Company will assume any obligation or will
be subject to any liability under the Deposit Agreement to holders of the
Depositary Shares other than for its negligence or willful misconduct. Neither
the Depositary nor the Company will be liable if it is prevented or delayed by
law or any circumstance beyond its control in performing its obligations under
the Deposit Agreement. The obligations of the Company and any Depositary under
the Deposit Agreement are limited to performance in good faith of their duties
thereunder, and they will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Series F Preferred Stock
unless satisfactory indemnity is furnished. The Company and the Depositary may
rely on written advice of counsel or accountants, on information provided by
persons presenting Series F Preferred Stock for deposit, holders of Depositary
Shares or other persons believed in good faith to be competent to give such
information and on documents believed to be genuine and to have been signed or
presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital and surplus
of at least $50,000,000.
BOOK-ENTRY PROCEDURES AND SETTLEMENT WITH RESPECT TO SERIES F PREFERRED STOCK
AND DEPOSITARY SHARES
The Series F Preferred Stock or Depositary Shares will be issued in
book-entry form only in the form of one or more global stock certificates or
Depositary Receipts registered in the name of the nominee of the depository, DTC
(which term, as used herein, includes any successor or alternate depository
selected by the Company).
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DTC's nominee for all purposes will be considered the sole owner or holder
of the Preferred Stock or Depositary Shares held in book-entry form. Owners of
beneficial interests in the global stock certificates or Depositary Receipts
will not be entitled to have Preferred Stock or Depositary Shares registered in
their names, will not receive or be entitled to receive physical delivery of
Preferred Stock or Depositary Shares in definitive form, and will not be
considered the holders thereof under the Certificate of Incorporation or the
Deposit Agreement.
Neither the Company nor the Depository will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global stock certificates or Depositary
Receipts, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The recording of beneficial ownership of, and the payment of dividends or
other distributions on, Series F Preferred Stock or Depositary Shares held in
global form, and the circumstances under which the Company will issue Series F
Preferred Stock or Depositary Shares in definitive form in exchange for the
global stock certificates or Depositary Receipts will be as described above with
regard to the Global Units under 'Description of the Units--Book-Entry System.'
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of the material United States Federal income tax
consequences of the purchase, ownership and disposition of Units, Subordinated
Debt Securities, Preferred Securities, Purchase Contracts, Series F Preferred
Stock and Depositary Shares (collectively, 'Covered Securities'). It represents
the views of Cravath, Swaine & Moore, tax counsel to the Trust ('Tax Counsel').
Unless otherwise stated, it deals only with holders who purchase Units upon
their original issuance ('Initial Holders') for an amount equal to the Stated
Amount of the Preferred Securities, and who hold the Securities as capital
assets.
This summary does not address tax considerations applicable to investors
that (i) are subject to special U.S. Federal income tax treatment, such as
dealers in securities, (ii) hold any of the Covered Securities as part of a
'straddle,' 'conversion transaction,' or other integrated investment comprised
of any of the Covered Securities and one or more other investments or (iii) have
a functional currency other than the U.S. Dollar. It does not address (i) the
tax consequences to shareholders, partners or beneficiaries of a holder of
Covered Securities or (ii) alternative minimum taxes or state, local or foreign
taxes.
This summary is based on the Internal Revenue Code, Treasury regulations
thereunder and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis. This discussion is not binding on the Internal Revenue Service (the
'Service'). There is no authority on securities similar to the Units, and there
can be no assurance that the Service will take a similar view with respect to
the tax consequences described below.
For purposes of this summary, a 'U.S. Holder' is a holder who is (i) a
citizen or a resident of the United States (or any state thereof), (ii) a
corporation organized in or under the laws of the United States or any political
subdivision thereof, (iii) an estate or trust, the income of which is subject to
United States Federal income tax regardless of its source and (iv) a partnership
to the extent any of its partners are otherwise U.S. Holders. A 'Non-U.S.
Holder' is any holder who is not a U.S. Holder.
CLASSIFICATION OF THE SUBORDINATED DEBT SECURITIES
In the opinion of Tax Counsel, under current law and based on certain facts
and assumptions, the Subordinated Debt Securities will be classified for Federal
income tax purposes as indebtedness of the Company.
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CLASSIFICATION OF THE TRUST
In the opinion of Tax Counsel, under current law and based on certain facts
and assumptions, the Trust will be classified for Federal income tax purposes as
a grantor trust and not as an association taxable as a corporation. Accordingly,
each holder of a Preferred Security will be considered the owner of an undivided
interest in the Subordinated Debt Securities and will take into account a pro
rata share of all items of income, expense or deduction of the Trust.
U.S. HOLDERS
Acquisition of the Units
The purchase price of each Unit must be allocated between the Preferred
Security and the Purchase Contract included in a Unit in proportion to their
respective fair market values at the time of purchase. Such allocation will
establish the holder's initial tax basis in the Preferred Security or Purchase
Contract.
The Company will take the position that, at the time of issuance of the
Units, the fair market value of the Preferred Security is equal to its Stated
Amount, and the fair market value of the Purchase Contract is zero. As a result,
an Initial Holder should allocate the entire purchase price for a Unit (i.e.,
the Stated Amount of the Preferred Security) to the Preferred Security, and
should not allocate any portion of the purchase price to the Purchase Contract.
The Company's position will be binding on each Initial Holder, unless the holder
explicitly discloses (on a statement attached to the holder's timely filed
Federal income tax return for the year in which the Unit is acquired) that the
holder's position is different than the Company's.
Current Distributions
Interest income on the Subordinated Debt Securities will be taxable to
holders of Preferred Securities when received by the Trust or accrued by the
holder, in accordance with the holder's method of accounting. Payments by the
Company under the Guarantee will be treated as if made on the Subordinated Debt
Securities. Distributions by the Trust on the Preferred Securities representing
interest received by the Trust on the Subordinated Debt Securities will not
otherwise be taxable to holders, and will not be eligible for the dividends
received deduction.
The Company believes, and intends to file information returns on the basis
that, the Contract Fee constitutes ordinary income to holders. Holders should
consult their own tax advisors concerning the proper characterization of the
Contract Fee, including the possibility that the Contract Fee should not be
included in income upon receipt by analogy to the treatment of option premium.
Sale or Disposition of Units
A U.S. Holder will generally recognize gain or loss on the sale or other
disposition of a Covered Security. Such gain or loss will be separately
calculated with respect to the Preferred Security and the Purchase Contract, by
allocating the sale proceeds between those items in proportion to their fair
market values. The aggregate amount of gain or loss should generally equal the
difference between the sum of any cash and the fair market value of the property
received in the sale or other disposition (reduced by any amount attributable to
accrued interest, which will be taxable as such) and the holder's tax basis in
the Unit. Any gain or loss will generally be capital gain or loss and will be
long-term capital gain or loss if the Unit was held for more than one year.
If the sale or disposition of the Units occurs when the Purchase Contract
has a negative value, the holder might be considered to have received additional
consideration for the Preferred Security in an amount equal to such negative
value, and to have paid such amount to be released from the holder's obligation
under the Purchase Contract. Such a characterization should not have an adverse
effect on holders. Holders should consult their tax advisors regarding a sale or
disposition of Units at a time when the Purchase Contract has a negative value.
Redemption of Preferred Securities and Cancellation of Purchase Contract
Upon a redemption by the Trust of Preferred Securities, an Initial Holder
should not recognize gain or loss because the holder's tax basis in the
Preferred Security will equal the amount received on the
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redemption. If the Purchase Contract is canceled at the same time, the Initial
Holder will have no gain or loss because the tax basis of the Purchase Contract
is zero.
Purchase of Depositary Shares
An Initial Holder who exercises the Put Option should not recognize any
taxable gain or loss. A U.S. Holder who retains the Preferred Security and
tenders cash under the Purchase Contract will have no taxable gain or loss.
A U.S. Holder's tax basis in the Depositary Share will equal the purchase
price for such Depositary Share plus the holder's tax basis in the Purchase
Contract (zero in the case of an Initial Holder). The holding period for the
Depositary Shares will begin on the day after the purchase date.
Termination of Purchase Contract
An Initial Holder would not recognize gain or loss upon termination of a
Purchase Contract upon the bankruptcy of the Company, following a put default,
or otherwise, since such holder's tax basis in the Purchase Contract is zero.
Separation of a Unit
A U.S. Holder that elects to post Eligible Collateral and separate the
Preferred Security from the related Purchase Contract would not recognize
taxable gain or loss, and the holder's tax basis in the Preferred Security and
Purchase Contract will remain unchanged. The U.S. Holder will recognize ordinary
income with respect to interest earned on the Eligible Collateral. If the holder
pays cash to acquire a Depositary Share under the Purchase Contract, the
holder's tax basis in the Depositary Share will be the purchase price paid for
such Depositary Share plus the tax basis in the Purchase Contract (which would
be zero in the case of an Initial Holder).
If the U.S. Holder delivers a Preferred Security to the Collateral Agent in
exchange for release of the Eligible Collateral and issuance of a Unit to the
holder, the holder should not have taxable gain or loss.
Secondary Holders of Units
The purchase price paid for a Unit by a holder that is not an Initial
Holder (a 'Secondary Holder') must be allocated between the Preferred Security
and the Purchase Contact in accordance with their respective fair market values
at the time of purchase. This allocation will establish the holder's tax basis
in each such security. Subject to the market discount and premium rules
discussed below, a Secondary Holder will be taxable on current income from a
Unit as discussed under 'Current Distributions.'
If a Secondary Holder purchases a Unit when the Purchase Contract has a
negative value, the holder generally should have an aggregate tax basis in a
Unit equal to the price paid for the Unit. However, Secondary Holders should
consult their tax advisors regarding the consequences of such a purchase.
If the tax basis of a Preferred Security at the time of purchase is less
than the Stated Amount, the difference generally will be considered 'market
discount' with respect to the underlying Subordinated Debt Security, which could
result in a portion of any gain realized on the sale or disposition of the
Preferred Security being recharacterized as ordinary income. If the tax basis of
a Preferred Security at the time of purchase exceeds the Stated Amount, the
excess will be 'bond premium' with respect to the underlying Subordinated Debt
Security, which the holder may elect to amortize as an offset to interest income
on the Subordinated Debt Security. Secondary Holders should consult their tax
advisors regarding the application of the market discount and bond premium rules
to the Preferred Securities.
A Secondary Holder may recognize taxable gain or loss upon a sale or other
disposition of Units. See 'Sale or Disposition of Units.' Upon the redemption of
Preferred Securities by the Trust and cancellation of the Purchase Contract, the
holder may have taxable gain or loss on the Preferred Securities and may have a
taxable loss equal to the holder's basis in the Purchase Contract.
A Secondary Holder that acquires Series F Preferred Stock will generally be
subject to the rules under 'Purchase of Depositary Shares.' However, certain
consequences will differ. For example, a Secondary Holder that exercises the Put
Option may recognize a taxable gain upon the redemption of
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the Preferred Security, although any loss on the redemption may not be
recognized. Moreover, a Secondary Holder's tax basis in the Series F Preferred
Stock will include any tax basis of the holder in the Purchase Contract.
Distribution of Subordinated Debt Securities by the Trust
If Subordinated Debt Securities are distributed to holders in exchange for
the Preferred Securities in liquidation of the Trust, the distribution would not
be taxable to holders. A holder's tax basis and holding period in the Preferred
Securities would carry over to the Subordinated Debt Securities.
Depositary Shares
A holder of Depositary Shares will be treated as the owner of the Series F
Preferred Stock represented by such Depositary Share. Distributions made with
respect to the Depositary Shares will constitute dividends to the extent paid
out of current or accumulated earnings and profits of the Company, as determined
for U.S. Federal income tax purposes. Dividends will be eligible for the
corporate dividends received deduction, subject to applicable limitations.
A U.S. holder who sells or otherwise disposes of a Depositary Share
generally will recognize capital gain or loss for U.S. Federal income tax
purposes in an amount equal to the difference between the amount realized and
the holder's tax basis (assuming, in the case of a redemption of the stock, that
the holder does not own, and is not deemed to own, any common stock of the
Company). Such capital gain or loss will be long-term capital gain or loss if
the holder has held the stock for more than one year.
NON-U.S. HOLDERS
The discussion below applies to Non-U.S. Holders and assumes that (i) an
individual Non-U.S. Holder is not present in the United States for 183 days or
more in the taxable year and (ii) the Non-U.S. Holder's ownership of a Covered
Security is not effectively connected with the conduct of a trade or business in
the United States.
Current Payments
A Non-U.S. Holder of a Preferred Security would not be subject to U.S.
Federal income or withholding tax with respect to the holder's pro rata share of
interest paid on the Subordinated Debt Securities, provided that the Non-U.S.
Holder (i) does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote;
(ii) is not a controlled foreign corporation for U.S. tax purposes that is
related to the Company (directly or indirectly) through stock ownership; and
(iii) satisfies certain applicable certification requirements regarding the
holder's identity and residence. However, U.S. withholding tax would apply to
interest paid on the Subordinated Debt Securities if, contrary to the opinion of
Tax Counsel, the Service successfully contended that the Subordinated Debt
Securities were equity rather than debt for Federal income tax purposes.
Non-U.S. Holders of Purchase Contracts will be subject to U.S. withholding
tax with respect to any Contract Fee payments at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty.
Dividends on Depositary Shares
A Non-U.S. Holder of a Depositary Share will be subject to withholding tax
with respect to dividend distributions on such stock at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty.
Sale or Disposition
A Non-U.S. Holder will not be subject to U.S. Federal income or withholding
tax with respect to a sale, redemption or other disposition of a Covered
Security (assuming, in the case of a redemption of a Depositary Share, that the
holder does not own and is not deemed to own any Common Stock of the Company).
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Estate Tax Consequences
In the case of a Non-U.S. Holder that is an individual, Purchase Contracts
and Depositary Shares would be deemed to be situated in the United States for
United States estate tax purposes. As a result, the estate of an individual
Non-U.S. Holder would be required to file United States estate tax returns, and
might be liable for United States estate tax, if the value of the Purchase
Contracts and the Depositary Shares (together with other United States assets)
owned by the Non-U.S. Holder exceeded $60,000 (reduced by the amount of certain
gifts and other adjustments).
ERISA CONSIDERATIONS
Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974, as amended ('ERISA'), or Section 4975 of
the Code or entities whose assets are considered assets of such plans ('Plans'),
may purchase Units, Preferred Securities and Depositary Shares subject to the
investing fiduciary's determination that the investment in Units, Preferred
Securities and Depositary Shares satisfied ERISA's fiduciary standards and other
requirements applicable to investments by the Plan.
In any case, Salomon Inc and/or any of its affiliates may be considered a
'party in interest' (within the meaning of ERISA) or a 'disqualified person'
(within the meaning of Section 4975 of the Code) with respect to certain plans
(generally, Plans maintained or sponsored by, or contributed to by, any such
persons or Plans with respect to which any such person is a fiduciary or service
provider). The acquisition and ownership of Units, Preferred Securities and
Depositary Shares by a Plan with respect to which Salomon Inc or any of its
affiliates is considered a party in interest or a disqualified person, may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such securities are acquired pursuant to and in accordance with
an applicable exemption.
Any Plans proposing to acquire the Units, Preferred Securities or
Depositary Shares should consult with their own ERISA counsel and should not
acquire the Units, Preferred Securities or Depositary Shares unless it is
determined that such acquisition does not constitute a prohibited transaction.
Any such acquisition by a Plan shall be deemed a representation by the Plan and
the fiduciary effecting the investment on behalf of the Plan that such
acquisition does not and will not constitute a prohibited transaction for which
an exemption is not available.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the 'Underwriting Agreement') among the Company, the Trust and the Underwriters
named below (the 'Underwriters'), the Company and the Trust have agreed to sell
to each of the Underwriters named below, and each of such Underwriters, for whom
Salomon Brothers Inc is acting as representative, has severally agreed to
purchase from the Company and the Trust, the number of Units set forth below
opposite such Underwriter's name.
UNDERWRITER NUMBER OF UNITS
- ----------- ----------------
Salomon Brothers Inc..................
.................
.................
----------------
Total.................................
----------------
----------------
The Company has been advised by the Underwriters that the Underwriters
propose initially to offer the Units to the public at the public offering price
set forth on the cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of $ per unit. The Underwriters
may allow, and such dealers may reallow, a concession to certain other dealers
not in excess of $ per Unit. After the initial public offering, the
public offering price and such concessions may be changed from time to time.
58
<PAGE>
The Underwriting Agreement provides that the Company and the Trust will
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to payments the
Underwriters may be required to make in respect thereof.
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all the Units if any of the Units are purchased.
The Company and the Trust have granted to the Underwriters an option to
purchase up to an additional Units at the initial offering price less the
aggregate underwriting discounts and commissions, solely to cover
over-allotments. The option may be exercised at any time up to 30 days after the
date of this Prospectus. To the extent that the Underwriters exercise such
options, each of the Underwriters will be committed, subject to certain
conditions, to purchase a number of option Units proportionate to the initial
commitment of such Underwriter.
Salomon Brothers Inc is an indirect wholly owned subsidiary of the Company.
The participation of Salomon Brothers Inc in the offer and sale of the Units in
respect of which this Prospectus is delivered complies with the requirements of
Schedule E of the By-laws of the NASD regarding underwriting securities of an
affiliate of an NASD member.
The Units are a new issue of securities with no established trading market.
Application will be made to list the Units on the NYSE. The Company and the
Trust have been advised by the Underwriters that they intend to make a market in
the Units but are not obligated to do so and may discontinue market-making at
any time without notice. No assurance can be given as to the liquidity of the
trading market of the Units. See 'Risk Factors--Absence of Trading Market;
Separation of the Units.'
EXPERTS
The financial statements and related schedules included in the Company's
1995 10-K have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in this Prospectus in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
LEGAL OPINIONS
Certain legal matters relating to the Securities will be passed upon for
the Trust and the Company by Cravath, Swaine & Moore, New York, New York, and
for the Underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New York.
59
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information........................ 5
Incorporation of Certain Documents by
Reference.................................. 5
Prospectus Summary........................... 6
Risk Factors................................. 10
Salomon Inc.................................. 12
Recent Developments.......................... 12
Use of Proceeds.............................. 12
Ratio of Earnings to Fixed Charges........... 13
The Trust.................................... 13
Description of the Units..................... 14
Description of the Preferred Securities...... 27
Description of the Guarantee................. 36
Description of the Subordinated Debt
Securities................................. 39
Effect of Obligations Under the Subordinated
Debt Securities and the Guarantee.......... 46
Description of the Series F Preferred
Stock...................................... 47
Description of the Depositary Shares......... 51
United States Federal Income Taxation........ 54
ERISA Considerations......................... 58
Underwriting................................. 58
Experts...................................... 59
Legal Opinions............................... 59
</TABLE>
TRUST PREFERRED STOCK(SERVICE MARK)
UNITS
(TRUPS(SERVICE MARK))
CONSISTING OF
SI FINANCING TRUST I
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN
BY SALOMON INC
AND
SALOMON INC
PURCHASE CONTRACTS EACH REQUIRING THE PURCHASE ON
, 2021 (OR EARLIER) OF ONE DEPOSITARY SHARE REPRESENTING A
ONE-TWENTIETH INTEREST IN A SHARE OF % CUMULATIVE PREFERRED STOCK, SERIES
F, LIQUIDATION PREFERENCE $500 PER SHARE, OF SALOMON INC AT A PRICE OF $25 PER
DEPOSITARY SHARE
SALOMON BROTHERS INC
PROSPECTUS
DATED , 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Commission Registration Fee.......................................... $ 344.83
Accounting Fees......................................................
Trustees', Collateral Agent's and Preferred Stock Depositary's Fees
and Expenses.......................................................
Blue Sky Fees and Expenses...........................................
Printing and Engraving Fees..........................................
Rating Agency Fees...................................................
NASD Fee............................................................. 600.00
NYSE Listing Fee.....................................................
Legal Fees and Expenses..............................................
Miscellaneous........................................................
----------
Total Expenses.................................................. $ 944.83
----------
----------
</TABLE>
- ------------------
* All amounts are estimated except for the Commission registration fee and the
NASD fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 of the Delaware General Corporation Law
which provides for indemnification of directors and officers in certain
circumstances.
Article Fourteenth of the Company's Certificate of Incorporation provides
for indemnification of directors and officers of the Company against certain
liabilities incurred as a result of their duties as such and Article Sixteenth
of the Company's Certificate of Incorporation provides for the elimination of
the monetary liability of directors for certain actions as such. The Company's
Certificate of Incorporation, as amended, is filed as Exhibit 4(a) to the
Registration Statement on Form S-3 (No. 2-84733) filed June 29, 1983, Exhibit 3
to the Quarterly Report on Form 10-Q for the quarter ended June 30, 1986,
Exhibit 3 to the Quarterly Report on Form 10-Q for the quarter ended June 30,
1987, Exhibit 4 to the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1987, Exhibit A to Exhibit 1 to Registration Statement on Form 8-A
filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13,
1991, Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993, and
Exhibit 4(a) to Current Report on Form 8-K dated February 12, 1996.
The Company maintains insurance policies covering liabilities of directors
and officers to the extent not covered by indemnification from the Company,
subject to the conditions and exclusions of the policies, deductible provisions,
a maximum amount of coverage of $35 million and disputes with insurers about
availability of coverage.
For the undertaking with respect to indemnification, see Item 17 herein.
See the Form of proposed Underwriting Agreement filed as Exhibit 1(a) for
certain indemnification provisions.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
1(a) -- Proposed Form of Underwriting Agreement.*
4(a) -- Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibits 3 to
Quarterly Reports on Form 10-Q for the quarters ended June 30, 1987 and June 30, 1986, Exhibit 4(a) to
Registration Statement Number 2-84733 on Form S-3 filed June 30, 1983, Exhibit 4 to Quarterly Report
on Form 10-Q for the quarter ended September 30, 1987, Exhibit A to Exhibit 1 to Registration
Statement on Form 8-A filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13,
1991, Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993 and Exhibit 4(a) to Current
Report on Form 8-K dated February 12, 1996).
4(b) -- By-laws of the Company, as amended (incorporated by reference to Exhibit 3(b) to the Annual Report on
Form 10-K for the year ended December 31, 1994).
4(c) -- Certificate of Trust of SI Financing Trust I.+
4(d) -- Declaration of Trust of SI Financing Trust I.+
4(e) -- Form of Amended and Restated Declaration of Trust of SI Financing Trust I (including as an exhibit thereto
the Form of Preferred Security).*
4(f) -- Form of Indenture between Salomon Inc and (including as an exhibit the Form of
Subordinated Debt Security).*
4(g) -- Form of Pledge Agreement between Salomon Inc and .*
4(h) -- Form of Unit Agreement between Salomon Inc and (including as an exhibit thereto
the Form of Unit).*
4(i) -- Form of Guarantee between Salomon Inc and .*
4(j) -- Form of Purchase Contract.*
4(k) -- Form of Certificate of Designations relating to the Preferred Stock.*
4(l) -- Form of Certificate of Series F Preferred Stock, without par value, of the Company.*
4(m) -- Form of Deposit Agreement.*
5 -- Opinion of Cravath, Swaine & Moore.*
8 -- Opinion re: Tax Matters.*
12 -- Calculation of Ratios of Earnings to Fixed Charges (incorporated by reference to Exhibit 12(a) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
23(a) -- Consent of Arthur Andersen L.L.P.*
23(b) -- Consent of Cravath, Swaine & Moore (included in Exhibits 5 and 8).*
24 -- Powers of Attorney.*
25(a) -- Form T-1 Statement of Eligibility and Qualification of under the Trust
Indenture Act of 1939.*
25(b) -- Form T-1 Statement of Eligibility and Qualification of under the Trust
Indenture Act of 1939.*
</TABLE>
- ------------------
* To be filed by amendment
+ Filed herewith
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, as amended, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934, as amended, that
is incorporated by reference in this registration statement shall
II-2
<PAGE>
be deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described under Item 15 above,
or otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereby, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
(3) For purposes of determining any liability under the Securities Act of
1933, as amended, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(4) For the purpose of determining any liability under the Securities Act
of 1933, as amended, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, SALOMON INC AND SI
FINANCING TRUST I EACH HEREBY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK,
STATE OF NEW YORK, ON THE 26TH DAY OF APRIL, 1996.
SI FINANCING TRUST I
BY: SALOMON INC, as Sponsor
By: /s/ Arnold S. Olshin
---------------------------------
(Arnold S. Olshin, Secretary)
SALOMON INC
By: /s/ Arnold S. Olshin
---------------------------------
(Arnold S. Olshin, Secretary)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES WITH SALOMON INC AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
* Chief Executive Officer, Chairman and
- --------------------- Director
(Robert E. Denham)
* Chief Financial Officer
- ---------------------
(Jerome H. Bailey)
* Principal Accounting Officer and
- --------------------- Controller
(Richard J. Carbone)
* Director
- ---------------------
(Dwayne O. Andreas)
* Director
- ---------------------
(Warren E. Buffett)
* Director
- ---------------------
(Claire M. Fagin)
* Director
- ---------------------
(John L. Haseltine)
* Director
- ---------------------
(Gedale B. Horowitz)
* Director
- ---------------------
(Deryck C. Maughan)
* Director
- ---------------------
(David O. Maxwell)
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C>
* Director
- ---------------------
(William F. May)
* Director
- ---------------------
(Charles T. Munger)
* Director
- ---------------------
(Shigeru Myojin)
* Director
- ---------------------
(Louis A. Simpson)
* Director
- ---------------------
(Robert G. Zeller)
</TABLE>
- ------------------
* The undersigned, by signing his name hereto, does hereby sign this
registration statement or amendment thereto on behalf of each of the
above-indicated directors and officers of Salomon Inc pursuant to powers of
attorney executed on behalf of each such director and officer.
By: /s/ Arnold S. Olshin
----------------------------------
(Arnold S. Olshin,
Attorney-in-Fact)
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
<S> <C> <C>
1(a) -- Proposed Form of Underwriting Agreement.*
4(a) -- Certificate of Incorporation of the Company, as amended (incorporated by reference to
Exhibits 3 to Quarterly Reports on Form 10-Q for the quarters ended June 30, 1987 and
June 30, 1986, Exhibit 4(a) to Registration Statement Number 2-84733 on Form S-3
filed June 30, 1983, Exhibit 4 to Quarterly Report on Form 10-Q for the quarter ended
September 30, 1987, Exhibit A to Exhibit 1 to Registration Statement on Form 8-A
filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13, 1991,
Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993 and Exhibit 4(a)
to Current Report on Form 8-K dated February 12, 1996).
4(b) -- By-laws of the Company, as amended (incorporated by reference to Exhibit 3(b) to the
Annual Report on Form 10-K for the year ended December 31, 1994).
4(c) -- Certificate of Trust of SI Financing Trust I.+
4(d) -- Declaration of Trust of SI Financing Trust I.+
4(e) -- Form of Amended and Restated Declaration of Trust of SI Financing Trust I (including as
an exhibit thereto the Form of Preferred Security).*
4(f) -- Form of Indenture between Salomon Inc and (including as an exhibit thereto
the Form of Subordinated Debt Security).*
4(g) -- Form of Pledge Agreement between Salomon Inc and .*
4(h) -- Form of Unit Agreement between Salomon Inc and (including as an
exhibit thereto the Form of Unit).*
4(i) -- Form of Guarantee between Salomon Inc and .*
4(j) -- Form of Purchase Contract.*
4(k) -- Form of Certificate of Designations relating to the Preferred Stock.*
4(l) -- Form of Certificate of Series F Preferred Stock, without par value, of the Company.*
4(m) -- Form of Deposit Agreement.*
5 -- Opinion of Cravath, Swaine & Moore.*
8 -- Opinion re: Tax Matters.*
12 -- Calculation of Ratios of Earnings to Fixed Charges (incorporated by reference to
Exhibit 12(a) to the Company's Annual Report on Form 10-K for the year ended December
31, 1995).
23(a) -- Consent of Arthur Andersen L.L.P.*
23(b) -- Consent of Cravath, Swaine & Moore (included in Exhibits 5 and 8).*
24 -- Powers of Attorney.*
25(a) -- Form T-1 Statement of Eligibility and Qualification of Chemical Bank under the Trust
Indenture Act of 1939.*
25(b) -- Form T-1 Statement of Eligibility and Qualification of under the
Trust Indenture Act of 1939.*
</TABLE>
- ------------------
* To be filed by amendment
+ Filed herewith
CERTIFICATE OF TRUST
OF
SI FINANCING TRUST I
This Certificate of Trust of SI Financing Trust I (the
"Trust"), dated April 25, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. 3801 et seq.).
1. Name. The name of the business trust
formed hereby is SI Financing Trust I.
2. Delaware Trustee. The name and business
address of the trustee of the Trust with a principal place of business
in the State of Delaware are Chemical Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801, Attention: Corporate Trustee
Administration Department.
3. Effective Date. This Certificate of Trust
shall be effective as of its filing.
4. Counterparts. This Certificate may be
executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being the sole
trustees of the Trust, have executed this Certificate of Trust as of
the date first above written.
/s/ Nazareth A. Festekjian
----------------------------
Nazareth A. Festekjian,
as trustee
/s/ Philip U. Tremmel
-----------------------------
Philip U. Tremmel,
as trustee
/s/ Marwan A. Marshi
-----------------------------
Marwan A. Marshi,
as trustee
CHEMICAL BANK DELAWARE,
as trustee
/s/ John J. Cashin
By: -------------------------
Name: John J. Cashin
Title: Senior Trust Officer
CHEMICAL BANK,
as trustee
/s/ Glenn McKeever
By: --------------------------
Name: Glenn McKeever
Title: Senior Trust Officer
DECLARATION OF TRUST
OF
SI FINANCING TRUST I
Declaration of Trust, dated as of April 25, 1996,
between Salomon Inc, a Delaware corporation, as Sponsor, and Nazareth
A. Festekjian, Philip U. Tremmel, Marwan A. Marshi, Chemical Bank, a New
York banking corporation and Chemical Bank Delaware, a Delaware banking
corporation, not in their individual capacities but solely as Trustees.
The Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "SI
Financing Trust I" (the "Trust"), in which name the Trustees, or the
Sponsor to the extent provided herein, may conduct the business of the
Trust, make and execute contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and
sets over to the Trustees the sum of $10. The Trustees hereby
acknowledge receipt of such amount in trust from the Sponsor, which
amount shall constitute the initial trust estate. The Trustees hereby
declare that they will hold the trust estate in trust for the Sponsor.
It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of title 12 of the
Delaware Code, 12 Del. C. Section 3801 et seq. (the "Business Trust Act"),
and that this document constitute the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State substantially
in the form attached hereto or in such other form as the Trustees may
approve.
3. The Sponsor and the Trustees will enter into an
amended and restated Declaration of Trust, satisfactory to each such
party, to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common
Securities referred to in the 1933 Act Registration Statement (as
defined below). Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain
prior to such execution and delivery any licenses, consents or
approvals required by applicable law or otherwise. However,
notwithstanding the foregoing, all Trustees may take all actions deemed
proper as are necessary to effect the transactions contemplated herein.
4. The Sponsor and the Trustees hereby authorize and
direct the Sponsor, as the sponsor of the Trust, (i) to file with the
Securities and Exchange Commission (the "Commission") and execute, in
each case on behalf of the Trust, (a) the Registration Statement on
Form S-3 (the "1933 Act Registration Statement") including
pre-effective or post-effective amendments to such Registration
Statement, relating to the registration under the Securities Act of
1933, as amended, of the Preferred Securities of the Trust and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration
Statement") including pre-effective or post-effective amendments to such
Registration Statement, relating to the registration of the Preferred
Securities of the Trust under Section 12(b) of the Securities Exchange
Act of 1934, as amended; and (ii) to file and execute on behalf of the
Trust such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or "blue sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary
or desirable. The Trustees further hereby ratify and approve all
actions having previously been taken with respect to the foregoing. In
the event that any filing referred to in clauses (i) or (ii) above is
required by the rules and regulations of the Commission or state
securities or blue sky laws, to be executed on behalf of the Trust by
the Trustees, Nazareth A. Festekjian, Philip U. Tremmel and Marwan A.
Marshi, in their capacities as Trustees of the Trust, are hereby
authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood
that Chemical Bank and Chemical Bank Delaware, in their capacities as
Trustees of the Trust, shall not be required to join in any such filing
or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission or state securities or blue
sky laws. In connection with all of the foregoing, the Sponsor and each
Trustee (other than Chemical Bank and Chemical Bank Delaware), solely
in its capacity as Trustee of the Trust, hereby constitutes and appoints
Bradley J. Gans and Arnold S. Olshin, and each of them, as his or its,
as the case may be, true and lawful attorneys-in-fact, and agents, with
full power of substitution and resubstitution, for the Sponsor or such
Trustee or in the Sponsor's or such Trustee's name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all
intents and purposes as the Sponsor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes,
shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one
or more counterparts.
6. The number of Trustees initially shall be five (5)
and thereafter the number of Trustees shall be such number as shall be
fixed from time to time by a written instrument signed by the Sponsor
which may increase or decrease the number of Trustees; provided,
however, that the number of Trustees shall in no event be less than
three (3); and provided, further that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is
a resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware. Subject to the foregoing, the Sponsor is entitled to appoint
or remove without cause any Trustee at any time. The Trustees may
resign at any time upon written notice to the Sponsor.
IN WITNESS WHEREOF, the parties hereto have caused
this Declaration of Trust to be duly executed as of the day and year
first above written.
SALOMON INC,
as Sponsor
By: /s/ Thomas W. Jasper
------------------------------
Name: Thomas W. Jasper
Title: Treasurer
/s/ Nazareth A. Festekjian
-----------------------------------
Nazareth A. Festekjian,
not in his individual capacity but solely
as Trustee
/s/ Philip U. Tremmel
-------------------------------------
Philip U. Tremmel,
not in his individual capacity but solely
as Trustee
/s/ Marwan A. Marshi
--------------------------------------
Marwan A. Marshi,
not in his individual capacity but solely
as Trustee
CHEMICAL BANK,
not in its individual capacity but solely
as Trustee
By: /s/ Glenn McKeever
-------------------------------------
Name: Glenn McKeever
Title: Senior Trust Officer
CHEMICAL BANK DELAWARE,
not in its individual capacity but solely
as Trustee
By: /s/ John J. Cashin
-------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
CERTIFICATE OF TRUST
OF
SI FINANCING TRUST I
This Certificate of Trust of SI Financing Trust I (the
"Trust"), dated April 25, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. 3801 et seq.).
1. Name. The name of the business trust
formed hereby is SI Financing Trust I.
2. Delaware Trustee. The name and business
address of the trustee of the Trust with a principal place of business
in the State of Delaware are Chemical Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801, Attention: Corporate Trustee
Administration Department.
3. Effective Date. This Certificate of Trust
shall be effective as of its filing.
4. Counterparts. This Certificate may be
executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being the sole
trustees of the Trust, have executed this Certificate of Trust as of
the date first above written.
----------------------------
Nazareth A. Festekjian,
as trustee
-----------------------------
Philip U. Tremmel,
as trustee
-----------------------------
Marwan A. Marshi,
as trustee
CHEMICAL BANK DELAWARE,
as trustee
By: -------------------------
Name: John J. Cashin
Title: Senior Trust Officer
CHEMICAL BANK,
as trustee
By: --------------------------
Name: Glenn McKeever
Title: Senior Trust Officer
