<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 22, 1996
REGISTRATION NO. 333-11881
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SALOMON INC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 22-1660266
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
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:
<TABLE>
<S> <C> <C>
JOHN W. WHITE, ESQ. R. GREGORY MORGAN, ESQ. ALAN L. BELLER, ESQ.
CRAVATH, SWAINE & MOORE MUNGER, TOLLES & OLSON CLEARY, GOTTLIEB, STEEN & HAMILTON
825 EIGHTH AVENUE 355 SOUTH GRAND AVENUE ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10019 LOS ANGELES, CALIFORNIA 90071 NEW YORK, NEW YORK 10006
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
At such time (from time to time) after the effective date of this Registration
Statement as agreed upon by Berkshire Hathaway Inc. ("Berkshire") and the
Underwriters in light of market conditions.
------------------------
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
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. [ ]
------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
NOVEMBER 22, 1996
PROSPECTUS SUPPLEMENT APPENDIX A
(To Prospectus Dated November , 1996)
SHARES
SALOMON INC
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
This Prospectus Supplement relates to shares (subject to adjustment as
described below) of Common Stock, par value $1.00 per share (the "Common
Stock"), of Salomon Inc (the "Company"), that may be delivered by Berkshire
Hathaway Inc. ("Berkshire") upon exchange for its Senior Exchangeable Notes Due
2001 (the "Notes") at or prior to maturity in accordance with the terms of such
Notes. The number of shares of Common Stock that may be delivered by Berkshire
upon exchange for the Notes is subject to adjustment upon the occurrence of
certain events as described in the anti-dilution provisions of the Notes. This
Prospectus Supplement, together with the attached Prospectus, constitutes
Appendix A to a prospectus of Berkshire (the "Berkshire Prospectus") covering
the sale of $350,000,000 aggregate principal amount of Notes. The Company will
not receive any of the net proceeds from the sale of the Notes or delivery
thereunder of the shares of Common Stock covered hereby.
Berkshire has granted the Underwriters of the Notes a 30-day option to purchase
up to an additional $50,000,000 aggregate principal amount of Notes, which, upon
their redemption by Berkshire or at maturity, may be exchangeable, at
Berkshire's option, for an additional shares (subject to adjustment as
described above) of Common Stock. Such option to purchase additional Notes has
been granted solely to cover over-allotments, if any.
The Common Stock is traded on the New York Stock Exchange (the "NYSE") under the
symbol "SB." On November 21, 1996, the closing sale price of Common Stock was
$45 7/8 per share. See "Price Range of Common Stock."
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 SUPPLEMENT OR THE ATTACHED PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is November , 1996.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NYSE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
PRICE RANGE OF COMMON STOCK
The Common Stock of the Company is listed on the NYSE under the symbol
"SB." The following table sets forth the high and low sales prices of the Common
Stock as reported on the NYSE and the dividends paid per share thereon for the
calendar periods listed below:
<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW PER SHARE
---- ---- ---------
<S> <C> <C> <C>
1994
First Quarter................................................. $52 3/4 $44 3/4 $ .16
Second Quarter................................................ 52 5/8 47 1/4 .16
Third Quarter................................................. 48 1/4 38 1/2 .16
Fourth Quarter................................................ 42 35 .16
1995
First Quarter................................................. 40 1/8 32 1/4 .16
Second Quarter................................................ 43 1/4 33 1/4 .16
Third Quarter................................................. 41 1/8 34 3/4 .16
Fourth Quarter................................................ 40 5/8 33 7/8 .16
1996
First Quarter................................................. 39 1/4 34 7/8 .16
Second Quarter................................................ 44 1/4 36 1/8 .16
Third Quarter................................................. 46 7/8 38 .16
Fourth Quarter (through November 21, 1996).................... 49 44 1/8 .16
</TABLE>
For a recent closing price of the Common Stock, see the cover page of this
Prospectus Supplement.
As of November 20, 1996, there were 11,569 record holders of the Common
Stock, including The Depository Trust Company which holds shares of Common Stock
on behalf of an indeterminate number of beneficial owners.
OWNERSHIP OF COMPANY SECURITIES BY BERKSHIRE
Assuming that Berkshire were to deliver the maximum number of shares of
Common Stock deliverable upon exchange of the Notes at the initial exchange rate
applicable thereto, Berkshire would beneficially own shares
( shares if the Underwriters' over-allotment option is exercised in
full) of Common Stock, representing approximately % ( % if the Underwriters'
over-allotment option is exercised in full) of the outstanding voting power of
the Company, in each case based on the number of shares of Common Stock and the
Company's 9.00% Series A Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock") beneficially owned by Berkshire as of November
, 1996, and assuming full conversion of such Convertible Preferred Stock and
no disposition of Common Stock by Berkshire other than upon exchange of the
Notes.
S-2
<PAGE> 4
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Underwriting
Agreement, Berkshire has agreed to sell to the Underwriters named below, and
each of the Underwriters has severally agreed to purchase from Berkshire, the
principal amount of the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT OF NOTES
------------------------------------------------------------------- -------------
<S> <C>
Salomon Brothers Inc............................................... $
Goldman, Sachs & Co................................................
Smith Barney Inc...................................................
----------
Total.................................................... $350,000,000
==========
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all the Notes
if any are purchased.
Berkshire has been advised that the Underwriters propose to offer the Notes
to the public initially at the offering price set forth on the cover of the
Berkshire Prospectus and to certain dealers at such price less a selling
concession of not more than % of such principal amount of the Notes; that the
Underwriters may allow, and each such dealer may reallow, to other dealers a
concession not exceeding % of such principal amount of the Notes; and that
such public offering price and concession and reallowance may be changed by the
Underwriters after completion of the offering of the Notes.
Berkshire has granted to the Underwriters an option, exercisable for 30
days from the date of the Berkshire Prospectus (or, if such 30th day shall not
be a business day, on the next business day thereafter), to purchase up to an
additional $50,000,000 aggregate principal amount of the Notes at the public
offering price set forth on the cover page of the Berkshire Prospectus, less the
underwriting discount. The Underwriters may exercise such option solely for the
purpose of covering over-allotments, if any, incurred in connection with the
sale of the Notes.
Each of Berkshire and the Company has agreed that it will not, for a period
of 90 days after the date of the Berkshire Prospectus, without the written
consent of Salomon Brothers Inc, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any shares of
Common Stock, or any securities convertible into or exchangeable for, shares of
Common Stock; provided, however, that such restriction shall not affect the
ability of Berkshire, the Company or their subsidiaries to take any such actions
in connection with the offer and sale of the Notes or any exchange at or prior
to maturity pursuant to the terms of Notes; and provided, further, that the
Company may sell or register shares of Common Stock or grant options to purchase
the same, in either case, pursuant to any employee or director stock option
plan, stock ownership plan or dividend reinvestment plan of the Company in
effect as of the date of the Berkshire Prospectus.
Berkshire and the Company have agreed in the Underwriting Agreement to
indemnify the Underwriters and their controlling persons against certain
liabilities under the Securities Act of 1933, as amended (the "Securities Act"),
or contribute to payments the Underwriters or their controlling persons may be
required to make in respect thereof. The Company and Berkshire have also agreed
to indemnify each other and their controlling persons with respect to certain
liabilities, including liabilities under the Securities Act, or contribute to
payments in respect thereof.
S-3
<PAGE> 5
Berkshire has been advised by the Underwriters (other than Salomon Brothers
Inc) that they may make a market in the Notes but they are not obligated to do
so and may discontinue such market making at any time without notice. No
assurance can be given that an active public market for the Notes will develop.
In the ordinary course of their respective businesses, certain of the
Underwriters and their respective affiliates have engaged in and may in the
future engage in commercial and investment banking transactions with Berkshire,
the Company and their affiliates.
S-4
<PAGE> 6
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
NOVEMBER 22, 1996
PROSPECTUS
SALOMON INC
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
This Prospectus relates to an indeterminate number of shares (the "Shares") of
Common Stock, par value $1.00 per share (the "Common Stock"), of Salomon Inc
(the "Company"), that may be deliverable by Berkshire Hathaway Inc.
("Berkshire") upon exchange of exchangeable debt securities having an aggregate
public offering price of up to $400,000,000 (the "Berkshire Exchangeable Debt
Securities") that may be offered by Berkshire. The Common Stock deliverable by
Berkshire upon exchange of the Berkshire Exchangeable Debt Securities may
include shares of Common Stock currently owned by Berkshire or its affiliates
and/or shares of Common Stock hereafter acquired by Berkshire or its affiliates
upon conversion of shares of the Company's 9.00% Series A Cumulative Convertible
Preferred Stock (the "Convertible Preferred Stock"), through open market
purchases, or in privately negotiated transactions. See "Ownership of Company
Securities by Berkshire." The Company will not receive any of the net proceeds
from the sale of the Berkshire Exchangeable Debt Securities or delivery
thereunder of the Shares covered hereby.
The specific terms of the Berkshire Exchangeable Debt Securities will be set
forth in one or more prospectuses of Berkshire (the "Berkshire Prospectus"), to
which this Prospectus, together with a Prospectus Supplement, will constitute
Appendix A. This Prospectus may not be used unless accompanied by a Prospectus
Supplement.
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.
The Berkshire Exchangeable Debt Securities may be sold (i) through underwriting
syndicates represented by one or more managing underwriters or through one or
more underwriters; (ii) through agents designated from time to time; or (iii)
directly to institutional purchasers. Any such managing underwriters or
underwriters will include Salomon Brothers Inc. The names of any underwriters or
agents involved in the sale of the Berkshire Exchangeable Debt Securities and
any applicable commissions or discounts will be set forth in the Berkshire
Prospectus.
The Common Stock is traded on the New York Stock Exchange under the symbol "SB."
The date of this Prospectus is November , 1996.
<PAGE> 7
AVAILABLE INFORMATION
The Company is subject to the informational 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"). Reports, proxy statements
and other information concerning 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, or through the World Wide Web (http://www.sec.gov). 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
"Company Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the Shares offered hereby. This Prospectus
does not contain all the information set forth in the Company 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 Company 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 Company 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"); (ii) the Quarterly Reports on Form 10-Q for the periods
ended March 31, 1996, June 30, 1996 and September 30, 1996; and (iii) the
Current Reports on Form 8-K dated January 23, 1996, February 1, 1996, February
12, 1996, April 23, 1996, April 29, 1996, May 30, 1996, June 5, 1996, June 26,
1996, June 28, 1996, July 23, 1996, September 12, 1996 and October 22, 1996.
All 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 Shares shall be deemed to be incorporated
by reference in this Prospectus.
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.
2
<PAGE> 8
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.
------------------
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, including Salomon Brothers Inc ("Salomon Brothers"). 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
November 8, 1996, the Company employed 8,639 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.
OWNERSHIP OF COMPANY SECURITIES BY BERKSHIRE
As of the date of this Prospectus, Berkshire beneficially owns 21,370,437
shares of Common Stock, representing approximately 18% of the outstanding voting
power of the Company. Such beneficial ownership consists of (i) 10,317,806
shares of Common Stock held by subsidiaries of Berkshire and (ii) 420,000 shares
of Convertible Preferred Stock held by subsidiaries of Berkshire, which shares
are convertible, at the option of the holder, into 11,052,631 shares of Common
Stock at the current conversion rate.
In October 1987, pursuant to a Purchase Agreement dated September 27, 1987,
between the Company and Berkshire (the "Purchase Agreement"), the Company issued
to certain affiliates of Berkshire an aggregate of 700,000 shares of Convertible
Preferred Stock. In the Purchase Agreement, Berkshire (which for purposes of the
Purchase Agreement includes the affiliates of Berkshire) agreed that (i)
Berkshire will not sell any Company securities owned by it to a third party
without first giving the Company or its designee a reasonable opportunity to
purchase such securities at the same price and on the same terms and conditions
proposed with respect to an anticipated sale by Berkshire to a third party, and
(ii) if the Company does not exercise its right of first refusal and buy Company
securities which Berkshire proposes to sell, Berkshire will not knowingly sell
to any one entity or group acting in concert Company securities giving such
entity or group securities which amount in the aggregate to over 5% of the
Company voting stock outstanding at the time of the sale. In the Purchase
Agreement, the Company agreed to use its best efforts to nominate and elect
Warren E. Buffett and Charles T. Munger, or two other Berkshire representatives
reasonably acceptable to the Company, to the Company's Board of Directors, so
long as Berkshire owns at least 5% of the Company's outstanding voting
securities.
On October 31, 1995, pursuant to the terms of the Certificate of
Designation of the Convertible Preferred Stock, the Company redeemed 140,000
shares of Convertible Preferred Stock for a redemption price of $140,000,000. On
October 29, 1996, Berkshire converted the 140,000 shares of Convertible
Preferred Stock that would otherwise have been redeemed by the Company on
October 31, 1996, into 3,684,206 shares of Common Stock. If the shares called
for redemption are
3
<PAGE> 9
not previously converted, one-third of the remaining 420,000 shares of
Convertible Preferred Stock are to be redeemed annually on each October 31 of
1997 through 1999 at $1,000 per share plus any accrued but unpaid dividends. No
cash dividends may be paid on the Common Stock, nor may the Company repurchase
any of its Common Stock, if dividends or required redemptions of the Convertible
Preferred Stock are in arrears.
Berkshire has advised the Company that it is considering engaging in a
transaction at some future date that may over time result in a reduction in
Berkshire's shareholding in the Company. In this connection, Berkshire has
advised the Company that it is considering whether to sell Berkshire
Exchangeable Debt Securities, and has asked the Company, pursuant to the
Company's obligations under the Purchase Agreement, to file the Company
Registration Statement registering the Shares covered hereby. Pursuant to the
Purchase Agreement, the Company will pay certain expenses arising in connection
with such registration. In addition, the Company will waive its right of first
refusal under the Purchase Agreement with respect to the delivery of Shares in
exchange for any Berkshire Exchangeable Debt Securities.
Berkshire has also advised the Company that, depending upon its evaluation
of market conditions and investment alternatives, Berkshire may effect other
types of transactions that could result in a disposition of a portion of its
shares of Common Stock, or may determine not to effect any such transaction.
Berkshire expects to remain a large shareholder of the Company even if, over
time, it disposes of a portion of its shares of Common Stock. In that
connection, Berkshire has advised the Company that Mr. Buffett, Berkshire's
Chairman and Chief Executive Officer, and Mr. Munger, its Vice Chairman, expect
to remain on the Company's Board of Directors, with Mr. Buffett continuing to
serve as Chairman of the Executive Committee. In addition, Louis A. Simpson,
President and Chief Executive Officer--Capital Operations of GEICO Corporation,
a wholly owned subsidiary of Berkshire, would expect to remain a director of the
Company and to continue serving as Chairman of the Audit Committee.
Each Prospectus Supplement will set forth the number of shares of Common
Stock that would be beneficially owned by Berkshire assuming that Berkshire were
to deliver the maximum number of Shares deliverable upon exchange of the
Berkshire Exchangeable Debt Securities offered thereby at the exchange rate
applicable thereto, as well as any change in the ownership of Company securities
by Berkshire since the date of this Prospectus.
DESCRIPTION OF CAPITAL STOCK
The following description of the capital stock of the Company is subject to
the detailed provisions of the Company's Certificate of Incorporation and bylaws
as currently in effect (the "Bylaws"). This description does not purport to be
complete or to give full effect to the terms of the provisions of statutory or
common law and is subject to, and qualified in its entirety by reference to, the
Certificate of Incorporation and the Bylaws, each of which has been incorporated
by reference as an exhibit to the Company Registration Statement of which this
Prospectus is a part.
COMMON STOCK
As of the date of this Prospectus, the Company's Certificate of
Incorporation authorizes the issuance of 250,000,000 shares of Common Stock. As
of November 20, 1996, 109,039,278 shares of Common Stock were outstanding.
Subject to the rights of the holders of any outstanding shares of preferred
stock, holders of Common Stock are entitled to receive such dividends, in cash,
securities, or property, as may from time to time be declared by the Board of
Directors. Subject to the provisions of the Bylaws with respect to the closing
of the transfer books and the fixing of a record date, holders of shares of
Common Stock are entitled to one vote per share of Common Stock held on all
matters requiring a vote of the holders of Common Stock. In the event of any
liquidation, dissolution or winding up of the Company, either voluntary or
involuntary, after payment shall have been made to the holders of preferred
stock of the full amount to which they shall be entitled, the holders of Common
Stock shall
4
<PAGE> 10
be entitled to share ratably, according to the number of shares held by them, in
all remaining assets of the Company available for distribution. Shares of Common
Stock are not redeemable and have no subscription, conversion or preemptive
rights.
The outstanding shares of Common Stock are listed on the New York Stock
Exchange and trade under the symbol "SB." The transfer agent and registrar for
the Common Stock is First Chicago Trust Company of New York.
PREFERRED STOCK
The Company is authorized by its Certificate of Incorporation 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 or a
duly authorized committee thereof.
As of the date of this Prospectus, the Company has outstanding (i) 400,000
shares of 8.08% Cumulative Preferred Stock, Series D, (ii) 500,000 shares of
8.40% Cumulative Preferred Stock, Series E, and (iii) 420,000 shares of
Convertible Preferred Stock. See "Ownership of Company Securities by Berkshire."
Each outstanding series of preferred stock ranks on parity as to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up. There are also currently authorized and reserved for issuance
690,000 shares of 9.50% Cumulative Preferred Stock, Series F (the "Series F
Preferred Stock"), which shares are issuable pursuant to purchase contracts of
the Company, each of which requires the purchase on June 30, 2021 (or earlier if
accelerated by the Company) of a depositary share representing one-twentieth of
a share of Series F Preferred Stock. These purchase contracts were issued in
connection with the offering by SI Financing Trust I of 13,800,000 9 1/2% Trust
Preferred Stock(SM) (TRUPS(SM)) Units, each consisting of a 9 1/4% Preferred
Security fully and unconditionally guaranteed by the Company and one purchase
contract.
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 (other
than Berkshire and its affiliates) acquires or (unless exercisability is delayed
by the Company's Board of Directors) announces an offer to acquire 20% or more
(which percentage may be reduced to not less than 10% by the Company's Board of
Directors prior to the time the Rights become exercisable) of the outstanding
shares of Common Stock. 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 with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up.
PLAN OF DISTRIBUTION
The Shares covered hereby will be deliverable only upon exchange of the
Berkshire Exchangeable Debt Securities, and may include shares of Common Stock
currently owned by Berkshire or its affiliates and/or shares of Common Stock
hereafter acquired by Berkshire or its affiliates upon conversion of shares of
Convertible Preferred Stock, through open market purchases, or in privately
negotiated transactions. See "Ownership of Company Securities by Berkshire."
Berkshire may sell the Berkshire Exchangeable Debt Securities in any of
three ways: (i) through underwriting syndicates represented by one or more
managing underwriters or through one or more underwriters; (ii) through agents
designated from time to time; or (iii) directly to institutional purchasers. Any
such managing underwriters or underwriters will include Salomon
5
<PAGE> 11
Brothers. The Berkshire Prospectus will set forth the terms of the offering of
the Berkshire Exchangeable Debt Securities, including the name or names of any
underwriters or agents, the purchase price of such Berkshire Exchangeable Debt
Securities and the proceeds to Berkshire from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers, and any securities exchanges on which such Berkshire
Exchangeable Debt Securities may be listed.
If accompanied by a Prospectus Supplement indicating that it may be used
for such purpose, this Prospectus also may be used by Berkshire in connection
with any exchange of Berkshire Exchangeable Debt Securities for Common Stock at
the option of the holder.
Salomon Brothers is a wholly owned subsidiary of the Company. Berkshire
beneficially owns Common Stock and Convertible Preferred Stock representing
approximately 18% of the outstanding voting power of the Company. Mr. Buffett,
Mr. Munger, and Mr. Simpson are directors of the Company. Because of such
ownership and other relationships between Salomon Brothers and Berkshire,
Berkshire may be deemed to be an affiliate of Salomon Brothers. Accordingly, any
offering of the Shares covered hereby will be made pursuant to the provisions of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc.
EXPERTS
The financial statements and related schedules included in the 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 will be passed upon for the Company by Cravath,
Swaine & Moore, New York, New York, and for any agents or underwriters of the
Berkshire Exchangeable Debt Securities by Cleary, Gottlieb, Steen & Hamilton,
New York, New York. Cravath, Swaine & Moore has previously represented, and may
continue to represent, GEICO Corporation, a wholly owned subsidiary of
Berkshire, in connection with its significant legal matters.
6
<PAGE> 12
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 SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE 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 DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Price Range of Common Stock........... S-2
Ownership of Company Securities by
Berkshire........................... S-2
Plan of Distribution.................. S-3
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Salomon Inc........................... 3
Ownership of Company Securities by
Berkshire........................... 3
Description of Capital Stock.......... 4
Plan of Distribution.................. 5
Experts............................... 6
Legal Opinions........................ 6
</TABLE>
SHARES
SALOMON INC
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
PROSPECTUS SUPPLEMENT
DATED NOVEMBER , 1996
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Commission Registration Fee.............................................. $137,931+
NASD Fee................................................................. 30,500
Blue Sky Fees and Expenses............................................... 1,000
Printing and Engraving Fees.............................................. 8,000
Transfer Agent and Registrar Fees and Expenses........................... 0
Accounting Fees.......................................................... 15,000
Legal Fees and Expenses.................................................. 275,000
Miscellaneous............................................................ 3,000
--------
Total.......................................................... $470,431
========
</TABLE>
- ---------------
+ Because the Common Stock being registered hereunder is deliverable only upon
exchange of the Berkshire Exchangeable Debt Securities, the registration fee
has been calculated pursuant to Rule 457 based on the proposed maximum
aggregate offering price of the Berkshire Exchangeable Debt Securities.
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 registrant's Certificate of Incorporation
provides for indemnification of directors and officers of the registrant against
certain liabilities incurred as a result of their duties as such and Article
Sixteenth of the registrant's Certificate of Incorporation provides for the
elimination of the monetary liability of directors for certain actions as such.
The registrant'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 24,
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, Exhibit 4(a) to Current Report on Form 8-K dated February 12, 1996, and
Exhibit 7(a) to Current Report on Form 8-K dated June 28, 1996.
The registrant maintains insurance policies covering liabilities of
directors and officers to the extent not covered by indemnification from the
registrant, 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.
II-1
<PAGE> 14
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
1 -- 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 24, 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,
Exhibit 4(a) to Current Report on Form 8-K dated February 12, 1996, and Exhibit
7(a) to Current Report on Form 8-K dated June 28, 1996).
4(b) -- Bylaws 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) -- Form of Certificate of Common Stock, par value $1.00 per share, of the Company
(incorporated by reference to Exhibit 4(c) to Registration Statement No. 2-84733).
5 -- Opinion of Cravath, Swaine & Moore.
23(a) -- Consent of Arthur Andersen LLP.
23(b) -- Consent of Cravath, Swaine & Moore (included in Exhibit 5).
24* -- Powers of Attorney.
</TABLE>
- ---------------
* Filed as an Exhibit to the registrant's Registration Statement on Form S-3
(Registration No. 333-11881) on September 12, 1996.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934, as amended, that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, as amended, each such post-effective amendment shall 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.
II-2
<PAGE> 15
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, as amended, each filing of the registrant'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
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.
(5) 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 registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant 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 registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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 registrant 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.
(6) 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 registrant 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.
(7) 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> 16
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALOMON INC
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
21ST DAY OF NOVEMBER, 1996.
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
- ----------------------------------- -------------------------------- ------------------
<C> <S> <C>
* Chief Executive Officer, November 21, 1996
- ----------------------------------- Chairman and Director
(Robert E. Denham)
* Chief Financial Officer November 21, 1996
- -----------------------------------
(Jerome H. Bailey)
/s/ RICHARD J. CARBONE Principal Accounting Officer November 21, 1996
- ----------------------------------- and Controller
(Richard J. Carbone)
* Director November 21, 1996
- -----------------------------------
(Dwayne O. Andreas)
* Director November 21, 1996
- -----------------------------------
(Warren E. Buffett)
* Director November 21, 1996
- -----------------------------------
(Claire M. Fagin)
* Director November 21, 1996
- -----------------------------------
(John L. Haseltine)
* Director November 21, 1996
- -----------------------------------
(Gedale B. Horowitz)
* Director November 21, 1996
- -----------------------------------
(Deryck C. Maughan)
* Director November 21, 1996
- -----------------------------------
(David O. Maxwell)
* Director November 21, 1996
- -----------------------------------
(William F. May)
</TABLE>
II-4
<PAGE> 17
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ----------------------------------- -------------------------------- ------------------
<C> <S> <C>
* Director November 21, 1996
- -----------------------------------
(Charles T. Munger)
* Director November 21, 1996
- -----------------------------------
(Shigeru Myojin)
* Director November 21, 1996
- -----------------------------------
(Louis A. Simpson)
* Director November 21, 1996
- -----------------------------------
(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> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ ----------------------------------------------------------------------------
<S> <C> <C>
1 -- 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 24, 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, Exhibit
4(a) to Current Report on Form 8-K dated February 12, 1996, and Exhibit 7(a)
to Current Report on Form 8-K dated June 28, 1996).
4(b) -- Bylaws 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) -- Form of Certificate of Common Stock, par value $1.00 per share, of the
Company (incorporated by reference to Exhibit 4(c) to Registration Statement
No. 2-84733).
5 -- Opinion of Cravath, Swaine & Moore.
23(a) -- Consent of Arthur Andersen LLP.
23(b) -- Consent of Cravath, Swaine & Moore (included in Exhibit 5).
24* -- Powers of Attorney.
</TABLE>
- ---------------
* Filed as an Exhibit to the registrant's Registration Statement on Form S-3
(Registration No. 333-11881) on September 12, 1996.
<PAGE> 1
Exhibit 1
Draft 11/13/96
BERKSHIRE HATHAWAY INC.
$[350,000,000]
_____ % Senior Exchangeable Notes Due _______, 2001*
(Subject to Exchange into Shares of Common Stock,
par value $1.00 per share, of Salomon Inc)
Underwriting Agreement
New York, New York
November 21, 1996
Salomon Brothers Inc
Goldman, Sachs & Co.
Smith Barney Inc.
as Representatives of the several Underwriters
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Berkshire Hathaway Inc., a Delaware corporation ("Berkshire"),
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, $[350,000,000] principal face amount of its ______% Senior
Exchangeable Notes Due ________, 2001 (the "Underwritten Securities"), to be
issued under an indenture (the "Indenture") dated as of December 1, 1987 between
Berkshire and State Street Bank and Trust Company, as successor trustee to the
First National Bank of Boston (the "Trustee"), as amended to the date hereof by
the First Supplemental Indenture
- ---------------
* Plus an option to purchase from Berkshire Hathaway Inc. up to
$[50,000,000] principal face amount of additional _____% Senior
Exchangeable Notes Due ________, 2001 to cover over-allotments.
<PAGE> 2
thereto dated as of November __, 1996. In addition, the Underwriters will have
an option to purchase up to $[50,000,000] principal face amount of such
securities (the "Option Securities" and, together with the Underwritten
Securities, the "Securities"). The Securities may be exchanged by Berkshire
under certain circumstances at maturity (including as a result of acceleration
or otherwise) or prior to maturity into shares of Common Stock, par value $1.00
per share (the "Salomon Common Stock"), of Salomon Inc, a Delaware corporation
("Salomon") (or, at Berkshire's option under the circumstances described in the
Final Berkshire Prospectus, cash with an equal value), at the rate specified in
the Final Berkshire Prospectus. The Securities may also, at the option of the
holders and subject to certain conditions, be exchanged into Salomon Common
Stock at such rate during certain periods.
In connection with the foregoing and pursuant to the Purchase
Agreement dated September 27, 1987 between Berkshire and Salomon, as amended
(the "Purchase Agreement") Salomon has filed with the Commission a registration
statement with respect to ___________ shares (the "Underwritten Shares") of
Salomon Common Stock, in respect of the Underwritten Securities, plus an
additional ________ shares (the "Option Shares" and, together with the
Underwritten Shares, the "Shares") of Salomon Common Stock in respect of the
Option Securities, for sale by Berkshire as a selling stockholder (to the extent
Berkshire shall so elect to deliver to holders of the Securities, or holders of
the Securities shall so elect to receive during specified periods, Salomon
Common Stock pursuant to the terms of the Securities), which registration
statement is referred to in Section 2 of this Agreement, and Salomon , by action
of its Board of Directors, has waived its right of first refusal under Section
10(b)(iii) of the Purchase Agreement with respect to such a sale of the Shares
by Berkshire.
Certain terms used in this Agreement are defined in paragraph
(c) of Section 1 and paragraph (c) of Section 2.
1. Representations and Warranties of Berkshire. Berkshire
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(a) Berkshire meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
(file number 33-30570) on Form S-3, including a basic prospectus, for the
registration under the Act of the offering and sale of the Securities. Berkshire
may have filed one or more amendments thereto, and may have used a Preliminary
Final Berkshire Prospectus, each of which has previously been furnished to you.
Such registration statement, as so amended, has become effective. Although the
Basic Berkshire Prospectus may not include all the information with respect to
the Securities and the offering thereof required by the Act and the rules
thereunder to be included in the Final Berkshire Prospectus, the Basic Berkshire
Prospectus includes all such information required by the Act and the rules
thereunder. Berkshire will next file with the Commission pursuant to Rules 415
and 424(b)(2) or (5) a final supplement to the form of prospectus included in
such registration statement relating to the Securities and the offering thereof.
As filed, such final prospectus supplement shall include all required
information with respect to the Securities and the offering thereof and, except
to the extent the Representatives shall agree in writing to a modification,
2
<PAGE> 3
shall be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that
contained in the Basic Berkshire Prospectus and any Preliminary Final Berkshire
Prospectus) as Berkshire has advised you, prior to the Execution Time, will be
included or made therein.
(b) On the Berkshire Effective Date, the Berkshire
Registration Statement did or will, and when the Final Berkshire Prospectus is
first filed in accordance with Rule 424(b) and on the Closing Date, the Final
Berkshire Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the respective rules
thereunder; on the Berkshire Effective Date, the Berkshire Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Berkshire Effective
Date and on the Closing Date the Indenture did or will comply in all material
respects with the applicable requirements of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and the rules thereunder; and, on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the Final
Prospectuses (together with any supplements thereto) will not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that Berkshire makes no
representations or warranties as to (i) that part of the Berkshire Registration
Statement which shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee, (ii) the information
contained in or omitted from the Berkshire Registration Statement or any Final
Prospectuses (or any supplements thereto) in reliance upon and in conformity
with information furnished in writing to Berkshire or Salomon by or on behalf of
any Underwriter through the Representatives specifically for use in connection
with the Berkshire Registration Statement or any Final Prospectuses (or any
supplements thereto) or (iii) (A) the information contained in or omitted from
the Final Berkshire Prospectus under the headings "Salomon Inc" and "Price Range
of Salomon Common Stock and Dividend Policy" (other than the last paragraph
thereof) or (B) the information contained in or omitted from the Salomon
Prospectus, except that under the heading "Ownership of Company Securities by
Berkshire".
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Berkshire Effective Date" shall mean each
date that the Berkshire Registration Statement and any post-effective amendment
or amendments thereto became or become effective. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the parties
hereto. "Basic Berkshire Prospectus" shall mean the prospectus referred to in
paragraph (a) of this Section 1 contained in the Berkshire Registration
Statement at the Berkshire Effective Date. "Preliminary Final Berkshire
Prospectus" shall mean any preliminary prospectus supplement to the Basic
Berkshire Prospectus which describes the Securities and the offering thereof and
is used prior to filing the Final Berkshire Prospectus. "Final Berkshire
Prospectus" shall mean the prospectus supplement relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time together with
the Basic Berkshire Prospectus. The Final Berkshire Prospectus and the Salomon
3
<PAGE> 4
Prospectus (as defined in Section 2(c)) are referred to herein collectively as
the "Final Prospectuses". "Berkshire Registration Statement" shall mean the
registration statement referred to in paragraph (a) of this Section 1, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date shall also mean such registration statement
as so amended. "Rule 415," "Rule 424" and "Regulation S-K" refer to such rules
or regulation under the Act. Any reference herein to the Berkshire Registration
Statement, the Basic Berkshire Prospectus, any Preliminary Final Berkshire
Prospectus or the Final Berkshire Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Exchange Act on or before the Berkshire
Effective Date or the issue date of the Basic Berkshire Prospectus, any
Preliminary Final Berkshire Prospectus or the Final Berkshire Prospectus, as the
case may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Berkshire Registration Statement, the Basic
Berkshire Prospectus, any Preliminary Final Berkshire Prospectus or the Final
Berkshire Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Berkshire Effective Date, or the issue
date of the Basic Berkshire Prospectus, any Preliminary Final Berkshire
Prospectus or the Final Berkshire Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(d) Immediately prior to any delivery of Shares pursuant to
the Securities, Berkshire or one of its subsidiaries will be the lawful owner of
such Shares and will convey good and marketable title to such Shares upon such
delivery, free and clear of all liens, encumbrances, equities and claims
whatsoever.
(e) Berkshire has no reason to believe that the
representations and warranties of Salomon contained in Section 2 hereof are not
true and correct, is familiar with the Salomon Registration Statement and has no
knowledge of any material fact, condition or information not disclosed in the
Salomon Prospectus or any supplement thereto which has adversely affected or may
adversely affect the business of Salomon or any of its subsidiaries.
(f) Berkshire has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of Salomon to
facilitate the sale or resale of the Securities or the Shares, and has not
effected any sales of Salomon Common Stock which, if effected by the issuer,
would be required to be disclosed in response to Item 701 of Regulation S-K.
2. Representations and Warranties of Salomon. Salomon
represents and warrants to, and agrees with, each Underwriter and, with respect
to Section 2(f) only, Berkshire as set forth below in this Section 2.
(a) Salomon meets the requirements for use of Form S-3 under
the Act and has filed with the Commission a registration statement (file number
333-11881) on such Form, including a related preliminary prospectus, for the
registration under the Act of the offering and sale of the Shares in connection
with the offering and sale of the Securities. Salomon may have
4
<PAGE> 5
filed one or more amendments thereto, including the related preliminary
prospectus, and may have used a preliminary prospectus supplement, each of which
has previously been furnished to you. Salomon will next file with the Commission
one of the following: (i) prior to effectiveness of such registration statement,
a further amendment to such registration statement, including the form of final
prospectus, (ii) a final prospectus in accordance with Rules 430A and 424(b)(1)
or (4), or (iii) a final prospectus in accordance with Rules 415 and 424(b)(2)
or (5). In the case of clause (ii), Salomon has included in such registration
statement, as amended at the Salomon Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in the Salomon Prospectus with respect to the Shares and the offering
thereof. As filed, such amendment and form of final prospectus, or such final
prospectus, shall contain all Rule 430A Information, together with all other
such required information, with respect to the Shares and the offering thereof
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest Preliminary
Salomon Prospectus) as Salomon has advised you, prior to the Execution Time,
will be included or made therein.
(b) On the Salomon Effective Date, the Salomon Registration
Statement did or will, and when the Salomon Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date, the Salomon
Prospectus (and any supplement thereto) will, comply in all material respects
with the applicable requirements of the Act, the Exchange Act and the respective
rules thereunder; on the Salomon Effective Date, the Salomon Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Salomon Effective
Date the Salomon Prospectus, if not filed pursuant to Rule 424(b), did not or
will not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectuses (together with any supplements thereto)
will not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that Salomon makes no representation or warranty as to (i) the information
contained in or omitted from the Salomon Registration Statement or any Final
Prospectuses (or any supplements thereto) in reliance upon and in conformity
with information furnished in writing to Salomon or Berkshire by or on behalf of
any Underwriter through the Representatives or (ii) (A) the information
contained in or omitted from the Salomon Prospectus under the heading "Ownership
of Company Securities by Berkshire" in the prospectus supplement and in the
first, fourth and fifth paragraphs under the heading "Ownership of Company
Securities by Berkshire" in the base prospectus or (B) the information contained
in or omitted from the Berkshire Prospectus, except that under the headings
"Salomon Inc" and "Price Range of Salomon Common Stock and Dividend Policy"
(other than the last paragraph thereto).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Salomon Effective Date" shall mean each
date that the Salomon Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Preliminary Salomon Prospectus"
shall mean any preliminary prospectus and
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any preliminary prospectus supplement referred to in paragraph (a) of this
Section 2 and any preliminary prospectus and any preliminary prospectus
supplement included in the Salomon Registration Statement at the Salomon
Effective Date that omits Rule 430A Information. "Salomon Prospectus" shall mean
the prospectus relating to the Shares that is used in connection with the
offering and sale of the Securities, that is attached as Appendix A to the Final
Berkshire Prospectus and that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean
the form of final prospectus relating to the Shares included in the Salomon
Registration Statement at the Salomon Effective Date. "Salomon Registration
Statement" shall mean the registration statement referred to in paragraph (a) of
this Section 2 including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information deemed to be included therein at
the Salomon Effective Date as provided by Rule 430A. "Rule 430A" refers to such
rule under the Act. "Rule 430A Information" means information with respect to
the Securities (or the Shares) and the offering thereof permitted to be omitted
from the Berkshire Registration Statement (or the Salomon Registration
Statement) when it becomes effective pursuant to Rule 430A. Any reference herein
to the Salomon Registration Statement, Preliminary Salomon Prospectus or the
Salomon Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Salomon Effective Date or the
issue date of a Preliminary Salomon Prospectus or the Salomon Prospectus, as the
case may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Salomon Registration Statement, any Preliminary
Salomon Prospectus or the Salomon Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Salomon
Effective Date, or the issue date of any Preliminary Salomon Prospectus or the
Salomon Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(d) Except as disclosed in the Salomon Prospectus, there is no
pending or, to the best knowledge of Salomon, threatened action, suit or
proceeding before any court or governmental agency, authority or body or any
arbitrator to which Salomon or any of its subsidiaries is a party or of which
any property of Salomon or any of its subsidiaries is the subject that would
reasonably be expected, individually or in the aggregate, to have a material
adverse effect on the business or financial position of Salomon and its
subsidiaries taken as a whole.
(e) Salomon and its subsidiaries are (i) in compliance with
any and all applicable federal, state and local and foreign laws and regulations
applicable to any of them, (ii) have accomplished all registrations and received
all permits, licenses or other approvals required of them under applicable laws
and regulations to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such registration, permit,
license or approval, except as described in the Salomon Prospectus or where such
noncompliance, failure to accomplish required registrations or receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such registrations, permits, licenses or
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<PAGE> 7
approvals would not, singly or in the aggregate, have a material adverse effect
on the business or financial position of Salomon and its subsidiaries taken as a
whole.
(f) Pursuant to the Purchase Agreement, at any time when
Berkshire is an affiliate of Salomon within the meaning of the Act and
registration of the Shares deliverable upon exchange of the Securities at the
option of the holders of Securities is required under the Act, Salomon shall use
its reasonable efforts to cause a registration statement to be effective under
the Act during each Exchange Period (as defined in the Final Berkshire
Prospectus) in order to permit a prospectus to be usable by Berkshire in
connection with any exchange of Securities, pursuant to the terms thereof, at
the option of the holders thereof. It is understood and agreed that Salomon may
delay the effectiveness of any registration statement or the delivery of any
Salomon prospectus if Salomon determines in good faith and for valid business
reasons that delivery of a Salomon prospectus would not be in the best interest
of Salomon or is prohibited by applicable law. Salomon shall notify Berkshire of
any delay pursuant to the immediately preceding sentence and Berkshire shall not
use any Salomon prospectus previously furnished to it during the period of such
delay.
3. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth,
Berkshire agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from Berkshire, at purchase price of ___%
of the principal face amount thereof, plus amortization of original issue
discount, if any, on the Securities from November __, 1996 to the Closing Date,
the principal face amount of the Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, Berkshire hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
$_______ principal face amount of the Option Securities at the same purchase
price as the Underwriters shall pay for the Underwritten Securities. Said option
may be exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Final Berkshire Prospectus upon written or telegraphic notice by the
Representatives to Berkshire setting forth the number of the Option Securities
as to which the several Underwriters are exercising the option and the
settlement date. Delivery of certificates for the Option Securities, and payment
therefor, shall be made as provided in Section 4 hereof. The principal amount of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total principal face amount of Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to round the denominations of the Securities to integral
multiples of $1,000.
4. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 3(b) hereof shall have been exercised on or before the first business
day prior to the Closing Date) shall be made at
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10:00 AM, New York City time, on November __, 1996, (or such later date not
later than five business days after such specified date as the Representatives
shall designate) which date and time may be postponed by agreement between the
Representatives and Berkshire or as provided in Section 11 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of Berkshire either by certified or official bank check or checks
drawn on or by a New York Clearing House bank or by wire transfer to an account
designated in writing by Berkshire at least two business days in advance of the
Closing Date, and in either case payable in same-day funds. Delivery of the
Securities shall be made through the facilities of The Depository Trust Company.
Berkshire agrees to have the Securities available for
inspection and checking by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
If the option provided for in Section 3(b) hereof is exercised
after the first business day prior to the Closing Date, Berkshire will deliver
(at the expense of Berkshire) to the Representatives at Seven World Trade
Center, New York, New York, on the date specified by the Representatives (which
shall be within three business days after exercise of said option), certificates
for the Option Securities in such names and denominations as the Representatives
shall have requested against payment of the purchase price thereof to or upon
the order of Berkshire either by certified or official bank check or checks
drawn on or by a New York Clearing House bank or by wire transfer to an account
designated in writing by Berkshire at least two business days in advance of the
Closing Date, and in either case payable in same-day funds. If settlement for
the Option Securities occurs after the Closing Date, Berkshire and Salomon will
deliver to the Representatives on the settlement date for the Option Securities,
and the obligation of the Underwriters to purchase the Option Securities shall
be conditioned upon receipt of, supplemental opinions and certificates
confirming as of such date certain of the opinions and certificates, as
requested by the Underwriters, delivered on the Closing Date pursuant to Section
7 hereof.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Berkshire Prospectus.
6. Agreements of Berkshire. Berkshire agrees with the several
Underwriters that:
(a) Berkshire will use its best efforts to cause the Berkshire
Registration Statement, if not effective at the Execution Time, and any
amendment thereto to become effective. Prior to the termination of the offering
of the Securities, Berkshire will not file any amendment of the Berkshire
Registration Statement or supplement (including the Final Berkshire Prospectus
or any Preliminary Final Berkshire Prospectus) to the Basic Berkshire Prospectus
unless Berkshire has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, Berkshire will cause the Final
Berkshire Prospectus, properly completed, and
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<PAGE> 9
any supplement thereto to be filed with the Commission, if required, pursuant to
the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely filing.
Berkshire will promptly advise the Representatives (i) when the Berkshire
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Final Berkshire
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination of the
offering of the Securities, any amendment to the Berkshire Registration
Statement shall have been filed or become effective, (iv) of any request by the
Commission for any amendment of the Berkshire Registration Statement or
supplement to the Final Berkshire Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Berkshire Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt by
Berkshire of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. Berkshire will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Final Berkshire Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend
the Berkshire Registration Statement or supplement the Final Berkshire
Prospectus to comply with the Act or the Exchange Act or the respective rules
thereunder, Berkshire promptly will prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 6, an amendment
or supplement which will correct such statement or omission or effect such
compliance.
(c) As soon as practicable, Berkshire will make generally
available to its security holders and to the Representatives an earnings
statement or statements of Berkshire and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) Berkshire will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Berkshire Registration
Statement (including exhibits thereto), and to each other Underwriter a copy of
the Berkshire Registration Statement (without exhibits thereto) and so long as
delivery of a prospectus by an Underwriter or any dealer may be required by the
Act, as many copies of each Preliminary Final Berkshire Prospectus and the Final
Berkshire Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) Berkshire will arrange for the qualification of the
Securities and the Shares for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in effect so
long as required for the distribution of the Securities and the Shares;
provided, however, that in connection therewith, Berkshire shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any
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jurisdiction. Berkshire will pay the fee of the National Association of
Securities Dealers, Inc. in connection with any review of the offering by it.
(f) Until the 90th business day following the Execution Time,
Berkshire will not, without the prior written consent of Salomon Brothers Inc,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any shares of Salomon Common Stock, or
any securities convertible into or exchangeable for, shares of Salomon Common
Stock; provided, however, that the foregoing shall not restrict the ability of
Berkshire or its subsidiaries to take any such actions in connection with the
offer and sale of shares of Salomon Common Stock in connection with the offering
of the Securities or any exchange or redemption of the Securities in accordance
with their terms.
7. Agreements of Salomon. Salomon agrees with the several
Underwriters that:
(a) Salomon will use its best efforts to cause the Salomon
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the offering
of the Securities, Salomon will not file any amendment of the Salomon
Registration Statement or supplement to the Salomon Prospectus unless Salomon
has furnished you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, if the Salomon Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Salomon Prospectus is
otherwise required under Rule 424(b), Salomon will cause the Salomon Prospectus,
properly completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of such
timely filing. Salomon will promptly advise the Representatives (i) when the
Salomon Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Salomon
Prospectus, and any supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b), (iii) when, prior to termination of the
offering of the Shares, any amendment to the Salomon Registration Statement
shall have been filed or become effective, (iv) of any request by the Commission
for any amendment of the Salomon Registration Statement or supplement to the
Salomon Prospectus or for any additional information, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Salomon
Registration Statement or the institution or threatening of any proceeding for
that purpose and (vi) of the receipt by Salomon of any notification with respect
to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. Salomon will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act in connection with the distribution of
the Securities, any event occurs as a result of which the Salomon Prospectus as
then supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein in the light
of the circumstances under which they were made not misleading, or if it shall
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be necessary to amend the Salomon Registration Statement or supplement the
Salomon Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, Salomon promptly will notify the Representatives and prepare
and file with the Commission, subject to the second sentence of paragraph (a) of
this Section 7, an amendment or supplement which will correct such statement or
omission or effect such compliance.
(c) As soon as practicable, Salomon will make generally
available to its security holders and to the Representatives an earnings
statement or statements of Salomon and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) Salomon will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Salomon Registration
Statement (including exhibits thereto), and to each other Underwriter a copy of
the Salomon Registration Statement (without exhibits thereto) and so long as
delivery of a prospectus by an Underwriter or any dealer may be required by the
Act, as many copies of each Preliminary Salomon Prospectus and the Salomon
Prospectus and any supplement thereto as the Representatives may reasonably
request.
(e) Salomon will arrange for the qualification of the Shares
for sale under the laws of such jurisdictions as the Representatives may
designate and will maintain such qualifications in effect so long as required
for the distribution of the Securities and the Shares; provided, however, that
in connection therewith, Salomon shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(f) Until the 90th business day following the Execution Time,
Salomon will not without the prior written consent of Salomon Brothers Inc,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any shares of Salomon Common Stock or
any securities convertible into, or exchangeable for, shares of Salomon Common
Stock (other than the Shares in connection with the offering by Berkshire of the
Securities); provided, however, that the foregoing shall not restrict the
ability of Salomon or its subsidiaries to take such actions in connection with
the offering by Berkshire of the Securities or any exchange or redemption of the
Securities in accordance with their terms; and provided, further, that Salomon
may sell or register shares of Salomon Common Stock or grant options to purchase
the same, in either case, pursuant to any employee or director stock option
plan, stock ownership plan or dividend reinvestment plan of Salomon in effect at
the Execution Time.
8. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of Berkshire and Salomon contained
herein as of the Execution Time, the Closing Date and any settlement date
pursuant to Section 4 hereof, to the accuracy of the statements of Berkshire and
Salomon made in any certificates pursuant to the provisions hereof, to the
performance by Berkshire and Salomon of their respective obligations hereunder
and to the following additional conditions:
(a) If the Berkshire Registration Statement or the Salomon
Registration Statement has not become effective prior to the Execution Time,
unless the Representatives agrees in
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writing to a later time, such Berkshire or Salomon Registration Statement will
become effective not later than (i) 6:00 PM, New York City time, on the date of
determination of the public offering price, if such determination occurred at or
prior to 3:00 PM, New York City time, on such date or (ii) 12:00 Noon, New York
City time, on the business day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM, New York
City time, on such date; if filing of the Final Berkshire Prospectus or the
Salomon Prospectus, or any supplements thereto, is required pursuant to Rule
424(b), such Final Berkshire Prospectus or Salomon Prospectus, and any such
supplements, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Berkshire
Registration Statement or the Salomon Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) Berkshire shall have furnished to the Representatives the
opinion of Munger, Tolles & Olson, counsel for Berkshire, dated the Closing
Date, to the effect that:
(i) each of Berkshire and National Indemnity Company, Columbia
Insurance Company and Government Employees Insurance Company
(individually a "Subsidiary" and collectively the "Subsidiaries") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final Berkshire
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification where it owns or leases material
properties or conducts material business, except for any such
jurisdiction where the failure to be so qualified would not have a
material adverse effect on such Subsidiary; and Berkshire is not
required to register as an investment company under the Investment
Company Act of 1940;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Final Berkshire Prospectus, all outstanding shares of capital stock of
the Subsidiaries are owned by Berkshire either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and such counsel is not aware of any other security interests,
claims, liens or encumbrances;
(iii) Berkshire's authorized equity capitalization is as set
forth in the Final Berkshire Prospectus; the Securities conform to the
description thereof contained in the Final Berkshire Prospectus; and
authorization has been given to list the Securities on the NYSE,
subject to official notice of issuance and evidence of satisfactory
distribution, or Berkshire has filed a preliminary listing application
and all required supporting documents with respect to the Securities
with the NYSE and such counsel has no reason to believe that the
Securities will not be authorized for listing, subject to official
notice of issuance and evidence of satisfactory distribution;
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(iv) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act and
constitutes a legal, valid and binding obligation enforceable against
Berkshire in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and equitable principles relating to the
granting of specific performance and other equitable remedies as a
matter of judicial discretion); and the Securities have been duly
authorized, executed and delivered by Berkshire and, when authenticated
by the Trustee in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute legal, valid and binding obligations of
Berkshire entitled to the benefits of the Indenture;
(v) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving
Berkshire or any of its subsidiaries, of a character required to be
disclosed in the Berkshire Registration Statement which is not
adequately disclosed in the Final Berkshire Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Berkshire Registration Statement or Final Berkshire
Prospectus, or to be filed as an exhibit, which is not described or
filed as required;
(vi) the Berkshire Registration Statement has become effective
under the Act; any required filing of the Basic Berkshire Prospectus,
any Preliminary Final Berkshire Prospectus and the Final Berkshire
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Berkshire Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened, and the Berkshire Registration Statement and the Final
Berkshire Prospectus (other than the financial statements and other
financial and statistical information contained or incorporated therein
and the Salomon Prospectus, as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act
and the respective rules thereunder; and such counsel has no reason to
believe that at the Berkshire Effective Date the Berkshire Registration
Statement (other than the financial statements and other financial and
statistical information contained or incorporated therein and the
Salomon Prospectus, as to which such counsel need express no opinion)
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Final Berkshire
Prospectus (other than the financial statements and other financial and
statistical information contained or incorporated therein and the
Salomon Prospectus, as to which such counsel need express no opinion)
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
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(vii) this Agreement has been duly authorized, executed and
delivered by Berkshire;
(viii) no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the consummation of the transactions
contemplated herein, except such as have been obtained under the Act,
the Exchange Act and the Trust Indenture Act and such as may be
required under the state securities or blue sky laws in connection with
the purchase and distribution of the Securities and the Shares by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach of, or constitute a default under the charter or by-laws of
Berkshire or the terms of any indenture or other agreement or
instrument known to such counsel and to which Berkshire or any of its
subsidiaries is a party or bound, or any order or regulation known to
such counsel to be applicable to Berkshire or any of its subsidiaries
of any court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over Berkshire or any of its
subsidiaries; and
(x) no holder of securities of Berkshire has rights to the
registration of such securities under the Berkshire Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
States of California and Delaware (and as to Delaware, involving the application
of any law other than the Delaware General Corporation Law) or the United
States, to the extent deemed proper and specified in such opinion, upon the
opinion of other counsel of good standing believed to be reliable and who are
satisfactory to counsel for the Underwriters, (B) to the extent such opinion
relates to the law of the State of New York (which law the Indenture, this
Agreement and the Securities state to be the governing law thereof), assume that
the laws of the State of California are the same as those of the State of New
York and (C) as to matters of fact, to the extent deemed proper, on certificates
of responsible officers of Berkshire and public officials. References to the
Final Berkshire Prospectus in this paragraph (b) include any supplements thereto
at the Closing Date.
(c) Salomon shall have furnished to the Representatives the
opinion of Cravath, Swaine & Moore, counsel for Salomon, or Arnold S. Olshin,
Secretary for Salomon, dated the Closing Date, to the effect, in the aggregate,
that:
(i) each of Salomon and Salomon Brothers Inc. ("SBI") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Salomon
Prospectus;
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(ii) Salomon's authorized equity capitalization is as set
forth in the Salomon Prospectus; the capital stock of Salomon conforms
to the description thereof contained in the Salomon Prospectus; the
outstanding shares of Salomon Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the shares
of Salomon Common Stock (the "Conversion Shares") issuable on
conversion of Salomon's 9% Series A Cumulative Convertible Preferred
Stock (the "Convertible Preferred Stock") shall upon conversion of the
Convertible Preferred Stock in accordance with its terms be duly
issued, fully paid and nonassessable; and no holders of securities of
Salomon are entitled to preemptive or other rights to subscribe for the
Conversion Shares;
(iii) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving
Salomon or any of its subsidiaries, of a character required to be
disclosed in the Salomon Registration Statement which is not adequately
disclosed in the Salomon Prospectus; and the statements included or
incorporated in the Salomon Prospectus describing any legal proceedings
relating to Salomon fairly summarize such matters;
(iv) the Salomon Registration Statement has become effective
under the Act; any required filing of any Salomon Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Salomon Registration Statement has been issued, and no
proceedings for that purpose have been instituted or threatened; the
Salomon Registration Statement and the Salomon Prospectus (other than
the financial statements and other financial and statistical
information contained therein as to which such counsel need not express
any opinion) appeared on their face to be appropriately responsive in
all material respects with the requirements of the Act and the
respective rules and regulations thereunder; and such counsel has no
reason to believe that at the Salomon Effective Date, the Salomon
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that at the Closing Date, the Salomon Prospectus (other than the
financial statements and other financial and statistical information
contained therein) includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(v) this Agreement has been duly authorized, executed and
delivered by Salomon;
(vi) no consent, approval, authorization or order of any
court or governmental body or agency is required for the consummation
by Salomon of the transactions contemplated herein, except such as have
been obtained under the Act (other than in connection with any exchange
of the Securities at the option of the holder thereof) and such as may
be required under the blue sky laws of any jurisdiction in connection
with
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<PAGE> 16
the sale of the Securities by the Underwriters and the distribution of
the Shares pursuant to the terms of the Securities and such other
approvals (specified in such opinion) as have been obtained;
(vii) neither the issue and sale of the Securities nor the
delivery of the Shares upon exchange of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach of, or constitute a default under the charter or by-laws of
Salomon or the terms of any indenture or other agreement or instrument
known to such counsel and to which Salomon or any of its subsidiaries
is a party or bound, or any order or regulation known to such counsel
to be applicable to Salomon or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over Salomon or any of its subsidiaries; and
(viii) no holder of securities of Salomon, other than
Berkshire, has rights to the registration of such securities under the
Salomon Registration Statement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
States of New York and Delaware or the United States, to the extent such counsel
deems proper and specified in such opinion, upon the opinion of other counsel of
good standing whom such counsel believes to be reliable and who are satisfactory
to counsel for the Underwriters and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of Salomon
and public officials. References to the Salomon Prospectus in this paragraph (c)
include any supplements thereto at the Closing Date.
(d) The Representatives shall have received from Cleary,
Gottlieb, Steen & Hamilton, counsel for the Underwriters, such opinion or
opinions, or letter or letters, dated the Closing Date, with respect to the
issuance and sale of the Securities, the Indenture, the Shares, the Salomon
Registration Statement, the Salomon Prospectus (together with any supplement
thereto), certain information contained in the Berkshire Registration Statement
and the Final Berkshire Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and the
Representatives and Berkshire shall have received from Cravath, Swaine & Moore
such letter or letters, dated the Closing Date, with respect to certain
information contained in the Berkshire Registration Statement and the Final
Berkshire Prospectus (together with any supplement thereto) as the
Representatives may reasonably require.
(e) Berkshire shall have furnished to the Representatives a
certificate of Berkshire, signed by the Chairman or the Vice Chairman of the
Board and the principal financial or accounting officer of Berkshire, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Berkshire Registration Statement, the Final Berkshire Prospectus,
any supplement to the Final Berkshire Prospectus and this Agreement and that:
(i) the representations and warranties of Berkshire in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if
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<PAGE> 17
made on the Closing Date and Berkshire has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Berkshire Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to Berkshire's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in, or incorporated by reference in, the Final Berkshire
Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of Berkshire and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Berkshire
Prospectus (exclusive of any supplement thereto).
(f) Salomon shall have furnished to the Representatives and
Berkshire a certificate of Salomon, signed by the Senior Vice President and
Controller of Salomon, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Salomon Registration Statement, the
Salomon Prospectus, any supplements to the Salomon Prospectus and this Agreement
and that:
(i) the representations and warranties of Salomon in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and Salomon has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Salomon Registration Statement and no proceedings for that purpose have
been instituted or, to Salomon's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in, or incorporated by reference in, the Salomon Prospectus
(exclusive of any supplement thereto), there has been no material
adverse change in the condition (financial or other), earnings,
business or properties of Salomon and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Salomon Prospectus (exclusive of
any supplement thereto).
(g) At the Execution Time and at the Closing Date, Deloitte
& Touche LLP shall have furnished to the Representatives a letter or letters
(which may refer to letters previously delivered to one or more of the
Representatives), dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
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<PAGE> 18
(i) in their opinion the audited consolidated financial
statements and financial statement schedules included or incorporated
in the Berkshire Registration Statement and the Final Berkshire
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
consolidated financial statements made available by Berkshire and its
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and audit committees of
Berkshire and the minutes of the meetings of the stockholders and
directors of the Subsidiaries; and inquiries of certain officials of
Berkshire who have responsibility for financial and accounting matters
of Berkshire and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial statements
in or incorporated in the Final Berkshire Prospectus, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Berkshire Registration Statement and the
Final Berkshire Prospectus do not comply as to form in all
material respects with applicable accounting requirements and
with the published rules and regulations of the Commission
with respect to financial statements included or incorporated
in quarterly reports on Form 10-Q under the Exchange Act; and
said unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included or incorporated in the Berkshire
Registration Statement and the Final Berkshire Prospectus; or
(2) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, in or incorporated
in the Berkshire Registration Statement and the Final
Berkshire Prospectus, there were any increases, at a specified
date not more than three business days prior to the date of
the letter, in the borrowings under investment agreements and
other debt of Berkshire and its subsidiaries or decreases in
stockholders' equity of Berkshire, each as compared with the
amounts shown on the most recent consolidated balance sheet
included or incorporated in the Berkshire Registration
Statement and the Final Berkshire Prospectus, except in all
instances for changes set forth in such letter, in which case
the letter shall be accompanied by an explanation by Berkshire
as to the significance thereof unless said explanation is not
deemed necessary by the Representatives; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
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<PAGE> 19
general accounting records of Berkshire and is subsidiaries) set forth
in the Berkshire Registration Statement and the Final Berkshire
Prospectus and in Exhibit 12 to the Berkshire Registration Statement,
including the information set forth under the caption "Selected
Consolidated Financial Data of Berkshire" in the Final Berkshire
Prospectus, the information included or incorporated in Items 1, 6 and
7 of Berkshire's Annual Report on Form 10-K, incorporated in the
Berkshire Registration Statement and the Final Berkshire Prospectus,
and the information included in the "Management's Discussion and
Analysis of Berkshire Financial Condition and Results of Operations"
included or incorporated in Berkshire's Quarterly Reports on Form 10-Q,
incorporated in the Berkshire Registration Statement Registration
Statement and the Final Berkshire Prospectus, agrees with the
accounting records of Berkshire and its subsidiaries, excluding any
questions of legal interpretation.
References to the Final Berkshire Prospectus in this paragraph
(g) include any supplement thereto at the date of the letter.
(h) At the Execution Time, Arthur Andersen LLP shall have
furnished to the Representatives and Berkshire a letter or letters (which may
refer to letters previously delivered to the Representatives), dated as of the
Execution Time, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
schedules included or incorporated by reference in the Salomon
Registration Statement and the Salomon Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations thereunder;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by Salomon and its subsidiaries;
their limited review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
interim financial information as indicated in their reports
incorporated in the Salomon Registration Statement and the Salomon
Prospectus; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and executive and audit
committees of Salomon and SBI; and inquiries of certain officials of
Salomon who have responsibility for financial and accounting matters of
Salomon and its subsidiaries as to transactions and events subsequent
to the date of the most recent audited financial statements in or
incorporated in the Salomon Prospectus, nothing came to their attention
which caused them to believe that:
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<PAGE> 20
(1) any unaudited financial statements included or
incorporated in the Salomon Registration Statement and the
Salomon Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and with the related published rules and
regulations with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial statements are not
in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
Salomon Registration Statement and the Salomon Prospectus; or
(2) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, in or incorporated
in the Salomon Registration Statement and the Salomon
Prospectus, there were any changes, at a specified date not
more than three business days prior to the date of the letter,
in the consolidated long-term debt of Salomon and its
subsidiaries or decreases in the stockholders' equity of
Salomon and its subsidiaries as compared with the amounts
shown on the most recent consolidated balance sheet included
or incorporated in the Salomon Registration Statement and the
Salomon Prospectus, or for the period from the date of the
most recent financial statements included or incorporated in
the Salomon Registration Statement and the Salomon Prospectus
to such specified date there were any decreases, as compared
with the corresponding period in the preceding year, in net
revenues or income before taxes or in total or per share
amounts of net income of Salomon and its subsidiaries, except
in all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by Salomon as to the significance thereof unless
said explanation is not deemed necessary by the
Representatives; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of Salomon and is subsidiaries) set forth in
the Salomon Registration Statement and the Salomon Prospectus,
including the information included or incorporated in Items 1, 2, 6, 7
and 11 of Salomon's Annual Report on Form 10-K, incorporated in the
Salomon Registration Statement and the Salomon Prospectus, and the
information included in the "Management's Discussion and Analysis of
Salomon Financial Condition and Results of Operations" included or
incorporated in Salomon's Quarterly Reports on Form 10-Q, incorporated
in the Salomon Registration Statement and the Salomon Prospectus,
agrees with the accounting records of Salomon and its subsidiaries,
excluding any questions of legal interpretation.
References to the Salomon Prospectus in this paragraph (h)
include any supplement thereto at the date of the letter.
20
<PAGE> 21
In addition, at the Closing Date, Arthur Andersen LLP shall
have furnished to the Representatives and Berkshire a letter or letters, dated
as of the Closing Date, in form and substance satisfactory to the
Representatives, to the effect set forth above.
(i) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in each of the Berkshire Registration Statement
and the Salomon Registration Statement (exclusive of any amendment thereof) and
each of the Final Berkshire Prospectus and the Salomon Prospectus (exclusive of
any supplements thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraphs (g) and (h) of this
Section 8 or (ii) any change, or any development involving a prospective change,
in or affecting the business or properties of either Berkshire or Salomon and
their respective subsidiaries, taken as a whole, the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Berkshire Registration Statement and the Salomon
Registration Statement (in either case, exclusive of any amendment thereof) and
the Final Berkshire Prospectus and the Salomon Prospectus (in either case,
exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of Berkshire's or Salomon's debt
securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act).
(k) Prior to the Closing Date, each of Berkshire and Salomon
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 8 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriter hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to Berkshire and
Salomon in writing or by telephone or telegraph confirmed in writing.
9. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 8 hereof is not satisfied,
because of any termination pursuant to Section 12 hereof or because of any
refusal, inability or failure on the part of Berkshire or Salomon to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any Underwriter, Berkshire will reimburse the Underwriters severally
upon demand for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
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<PAGE> 22
10. Indemnification and Contribution. (a) Berkshire agrees to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter, each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act, Salomon, each of Salomon's
directors, each of Salomon's officers who signs the Salomon Registration
Statement and each person who controls Salomon within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
(i) the Berkshire Registration Statement as originally filed or in any amendment
thereof, or in the Basic Berkshire Prospectus, any Preliminary Final Berkshire
Prospectus or the Final Berkshire Prospectus, or in any amendment thereof or
supplement thereto, or (ii) the Salomon Registration Statement as originally
filed or in any amendment thereof, or in any Preliminary Salomon Prospectus or
the Salomon Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state in the
documents referred to in clause (i) or (ii) above a material fact required to be
stated in the documents referred to in clause (i) or (ii) above or necessary to
make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that Berkshire will not
be liable under the indemnity agreement in this paragraph (a) to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made in (A) the documents referred to in clause (i) or (ii) above in
reliance upon and in conformity with written information furnished to Berkshire
or Salomon by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein, or (B) (1) the Berkshire Registration
Statement, any Preliminary Final Berkshire Prospectus or the Final Berkshire
Prospectus (or any amendment or supplement thereto) under the headings "Salomon
Inc" and "Price Range of Salomon Common Stock and Dividend Policy" (other than
the last paragraph thereof) or (2) the Salomon Registration Statement, any
Preliminary Salomon Prospectus or the Salomon Prospectus (or any amendment or
supplement thereto), except under the heading "Ownership of Company Securities
by Berkshire". This indemnity agreement will be in addition to any liability
which Berkshire may otherwise have.
(b) Salomon agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter, each person who
controls any Underwriter within the meaning of either the Act or the Exchange
Act, Berkshire, each of Berkshire's directors, each of Berkshire's officers who
signs the Berkshire Registration Statement, and each person who controls
Berkshire within the meaning of either the Act or the Exchange Act, against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) the Salomon Registration Statement
as originally filed or in any amendment thereof, or in any Preliminary Salomon
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<PAGE> 23
Prospectus or the Salomon Prospectus, or in any amendment thereof or supplement
thereto, or (ii) the Berkshire Registration Statement as originally filed or in
any amendment thereof, or in any Preliminary Final Berkshire Prospectus or the
Final Berkshire Prospectus, or in any amendment thereto or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
the documents referred to in clause (i) or (ii) above a material fact required
to be stated in the documents referred to in clause (i) or (ii) above or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that Salomon
will not be liable under the indemnity agreement in this paragraph (b) to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in (A) the documents referred to in clause (i) or (ii)
above in reliance upon and in conformity with written information furnished to
Salomon or Berkshire by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein or (B) (1) the information
contained in or omitted from the Salomon Registration Statement, any Preliminary
Salomon Prospectus or the Salomon Prospectus under the heading "Ownership of
Company Securities by Berkshire" in the prospectus supplement and in the first,
fourth and fifth paragraphs under the heading "Ownership of Company Securities
by Berkshire" in the base prospectus or (2) the Berkshire Registration
Statement, any Preliminary Final Berkshire Prospectus or the Final Berkshire
Prospectus (or any amendment or supplement thereto), except under the headings
"Salomon Inc" and "Price Range of Salomon Common Stock and Dividend Policy"
(other than the last paragraph thereof). This indemnity agreement will be in
addition to any liability which Salomon may otherwise have.
(c) Each Underwriter severally agrees to indemnify and hold
harmless Berkshire and Salomon, each of their respective directors, each of
their respective officers who signs the Berkshire Registration Statement or the
Salomon Registration Statement, respectively, and each person who controls
Berkshire or Salomon within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnities in paragraph (a) from Berkshire
to each Underwriter or in paragraph (b) from Salomon to each Underwriter,
respectively, but only with reference to written information relating to such
Underwriter furnished to Berkshire by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the Berkshire Registration
Statement as originally filed or in any amendment thereof, or in any Preliminary
Final Berkshire Prospectus or the Final Berkshire Prospectus, or in any
amendment thereof or supplement thereto, and to Salomon by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Salomon Registration Statement as originally filed or in any amendment thereof,
or in any Preliminary Salomon Prospectus or the Salomon Prospectus, or in any
amendment thereof or supplement thereto. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have. Berkshire
and Salomon acknowledge that the statements set forth in the last paragraph of
the cover page and under the heading "Plan of Distribution" in any Preliminary
Final Berkshire Prospectus or the Final Berkshire Prospectus and the statements
set forth under the heading "Plan of Distribution" in any Preliminary Salomon
Prospectus or the Salomon Prospectus constitute the only information furnished
in writing by or on behalf of any Underwriter for inclusion in the
23
<PAGE> 24
documents referred to in the foregoing indemnity, and you, as the
Representatives, confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 10, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from any liability under paragraphs (a), (b) or (c) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a), (b) or (c) above. The
indemnifying party shall be entitled to appoint counsel of indemnifying party's
choice at the indemnifying party's expense to represent the indemnified party in
any action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party in accordance with this
paragraph (d) within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified party to
employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 10 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, Berkshire, Salomon and the Underwriters
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which Berkshire,
Salomon and one or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by Berkshire and
Salomon, on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities; provided, however, that in no case shall any
24
<PAGE> 25
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, Berkshire and
Salomon, on the one hand, and the Underwriters, on the other hand, shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of Berkshire and Salomon, on the
one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. The relative benefits received by Berkshire
or Salomon on the one hand and the Underwriters on the other with respect to
such offering shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by Berkshire, and the total
underwriting discounts and commissions, respectively, in each case as set forth
on the cover page of the Final Berkshire Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by Berkshire and Salomon, on the one hand, or
the Underwriters, on the other hand. Berkshire, Salomon and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (e), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 10, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of such Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls
Berkshire or Salomon within the meaning of either the Act or the Exchange Act,
each officer of Berkshire or Salomon who shall have signed the Berkshire
Registration Statement or the Salomon Registration Statement and each director
of Berkshire or Salomon shall have the same rights to contribution as Berkshire
or Salomon, subject in each case to the applicable terms and conditions of this
paragraph (e).
11. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, Berkshire or Salomon. In the
event of a default by any Underwriter as set forth in this Section 11, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall
25
<PAGE> 26
determine in order that the required changes in the Berkshire Registration
Statement or Salomon Registration Statement and the Final Berkshire Prospectus
or Salomon Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to Berkshire, Salomon and any nondefaulting Underwriter
for damages occasioned by its default hereunder.
12. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to Berkshire and Salomon prior to delivery of and payment for the Securities, if
prior to such time (i) trading in Berkshire's or Salomon's Common Stock shall
have been suspended by the Commission, (ii) trading in the securities generally
on the NYSE shall have been suspended or limited or minimum prices shall have
been established on such Exchange, (iii) a banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis, the
effect of which on financial markets of the United States is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the Final
Berkshire Prospectus (exclusive of any supplement thereto).
13. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
Berkshire and Salomon or their respective officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the
Underwriters, Berkshire or Salomon or any of the officers, directors or
controlling persons referred to in Section 10 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 9 and 10 hereof
shall survive the termination or cancellation of this Agreement.
14. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them at Seven World Trade
Center, New York, New York 10048, attention of the Legal Department; if sent to
Berkshire, will be mailed, delivered or telegraphed and confirmed to it at 1440
Kiewit Plaza, Omaha, Nebraska 68131, attention of the Chief Executive Officer;
or if sent to Salomon, will be mailed, delivered, telegraphed and confirmed to
it at Seven World Trade Center, New York, New York 10048, attention of the
Secretary.
15. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 10 hereof,
and no other person will have any right or obligation hereunder.
26
<PAGE> 27
16. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among
Berkshire, Salomon and the several Underwriters.
Very truly yours,
Berkshire Hathaway Inc.
By: ____________________________
Name:
Title:
Salomon Inc
By:_____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Goldman, Sachs & Co.
Smith Barney Inc.
By: Salomon Brothers Inc
By:___________________________
Name:
Title:
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
27
<PAGE> 28
SCHEDULE I
<TABLE>
<CAPTION>
Underwriter Principal Face Amount of Underwritten Securities
- ----------- ------------------------------------------------
to be Purchased
---------------
<S> <C>
Salomon Brothers Inc.........................
Goldman, Sachs & Co..........................
Smith Barney Inc.............................
-------------
Total................... $[350,000,000]
==============
</TABLE>
28
<PAGE> 1
[LETTERHEAD OF CRAVATH, SWAINE & MOORE]
November 21, 1996
Salomon Inc
Registration Statement on Form S-3
(Registration No. 333-11881)
Dear Ladies and Gentlemen:
We have acted as special counsel for Salomon Inc, a Delaware
corporation (the "Company"), in connection with the filing by the Company with
the Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-3 (the "Registration Statement") relating to an
indeterminate number of shares (the "Shares") of Common Stock, par value $1.00
per share (the "Common Stock"), of the Company, that may be deliverable by
Berkshire Hathaway Inc. ("Berkshire") upon exchange of exchangeable debt
securities in an aggregate principal amount of up to $400,000,000 (the
"Berkshire Exchangeable Debt Securities") to be offered by Berkshire. The
Shares being registered under the Registration Statement will be offered on a
continued or delayed basis pursuant to the provisions of Rule 415 under the
Securities Act of 1933 (the "Act").
In connection with the foregoing, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary for the
purposes of this opinion, including without limitation the following: (a) the
Certificate of Incorporation, as amended, of the Company (including the
Certificate of Designation (the "Certificate of Designation") relating to the
9.00% Series A Cumulative Preferred Stock of the Company (the "Convertible
Preferred Stock")); (b) the By-laws, as amended, of the Company; (c)
resolutions of the Board of
<PAGE> 2
Directors of the Company; (d) resolutions of the stockholders of the
Company; (e) specimen certificates for the Shares; and (f) certificates
of public officials and officers and representatives of the Company.
Based upon and subject to the foregoing, we are of the opinion that:
(1) the Shares that are issued and outstanding on the date
hereof have been duly and validly authorized and issued
and are fully paid and nonassessable; and
(2) the Shares that are issuable upon conversion of the
Convertible Preferred Stock, when issued and delivered
to the holder thereof in accordance with the terms of
the Certificate of Designation, will be duly and validly
authorized and issued and fully paid and nonassessable.
We are aware that we are referred to under the heading "Legal Opinions"
in the Prospectus forming a part of the Registration Statement, and we hereby
consent to such use of our name therein and to the use of this opinion for
filing with the Registration Statement as Exhibit 5 thereto. In giving this
consent, we do not hereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act or the rules
and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Cravath, Swaine & Moore
Salomon Inc
Seven World Trade Center
New York, NY 10048
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
SALOMON INC
FORM S-3 REGISTRATION STATEMENT
SALOMON INC
COMMON STOCK
Par Value $1.00 per share
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated
February 6, 1996 incorporated by reference in Salomon Inc's Form 10-K for the
year ended December 31, 1995 and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
New York, New York
November 21, 1996
