<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1996
REGISTRATION NO. 333-2897
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
SALOMON INC DELAWARE 22-1660266
SI FINANCING TRUST I DELAWARE TO BE APPLIED FOR
(EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
AS SPECIFIED IN ITS CHARTER) OF INCORPORATION OR ORGANIZATION)
</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>
GREGORY M. SHAW, ESQ. ALLAN G. SPERLING, ESQ.
CRAVATH, SWAINE & MOORE CLEARY, GOTTLIEB, STEEN & HAMILTON
825 EIGHTH AVENUE ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10006
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable on or after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the 'Securities Act'), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. /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. / /
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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. / /
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /x/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
OFFERING PRICE AGGREGATE AMOUNT OF
AMOUNT TO BE PER OFFERING REGISTRATION
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1)
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<S> <C> <C> <C> <C>
Units...............................................
Preferred Securities................................
Guarantee of Preferred Securities by Salomon Inc and
certain back-up undertakings(4)...................
Subordinated Debt Securities........................
Purchase Contracts..................................
Cumulative Preferred Stock Series F (without par
value)............................................
Depositary Shares...................................
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Total....................................... $287,500,000(5) 100% $287,500,000(5) $99,137.93
</TABLE>
(1) Pursuant to Rule 457(o) under the Securities Act, which permits the
registration fee to be calculated on the basis of the maximum aggregate
offering price of all the securities listed, the table does not specify by
each class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price. The
proposed maximum aggregate offering price of all the securities listed
includes the consideration required to be paid in connection with the
settlement of the Purchase Contracts.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Exclusive of accrued interest and dividends, if any.
(4) No separate consideration will be received for the Guarantee. The Guarantee
includes the rights of holders of the Preferred Securities under the
Guarantee and certain back-up undertakings, comprised of obligations of
Salomon Inc under the Indenture and pursuant to the Declaration to provide
certain indemnities in respect of, and be responsible for certain costs,
expenses, debts and liabilities of SI Financing Trust I, as described in the
Registration Statement. All obligations under the Declaration, including the
indemnity obligation, are included in the back-up undertakings.
(5) There is also being registered an indeterminate amount of all the types of
securities being registered hereunder that may be offered and sold by
affiliates of the Company, including Salomon Brothers Inc, in market-making
transactions at negotiated prices relating to prevailing market prices at
the time of sale.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
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 SUCH STATE.
SUBJECT TO COMPLETION
JUNE 24, 1996
PROSPECTUS
10,000,000 % TRUST PREFERRED STOCK(SERVICE MARK) (TRUPS(SERVICE MARK))*
UNITS
consisting of
SI FINANCING TRUST I
10,000,000 % PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY SALOMON INC
and
SALOMON INC
10,000,000 PURCHASE CONTRACTS
EACH REQUIRING THE PURCHASE ON , 2021 (OR EARLIER) OF ONE DEPOSITARY
SHARE REPRESENTING A ONE-TWENTIETH INTEREST IN A SHARE OF % CUMULATIVE
PREFERRED STOCK, SERIES F, LIQUIDATION PREFERENCE $500 PER SHARE, OF SALOMON INC
AT A PURCHASE PRICE OF $25 PER DEPOSITARY SHARE.
Each % Trust Preferred Stock(Service Mark) (TRUPS(Service Mark))* Unit (a
'Unit') will consist of (i) a % Preferred Security (the 'Preferred
Security') of SI Financing Trust I (the 'Trust'), having a stated liquidation
amount of $25 (the 'Stated Amount'), and (ii) a related contract (the 'Purchase
Contract') requiring the purchase on , 2021 (or earlier as
described below) of one Depositary Share (a 'Depositary Share') representing a
one-twentieth interest in a share of % Cumulative Preferred Stock, Series
F, liquidation preference $500 per share (the 'Series F Preferred Stock'), of
Salomon Inc (the 'Company') at a purchase price of $25 per Depositary Share. A
holder of a Unit (a 'Unitholder') may cause the Preferred Security to be repaid
and the proceeds thereof to be used to pay the purchase price of a Depositary
Share under the Purchase Contract. (continued on following page)
SEE 'RISK FACTORS' BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CAREFULLY CONSIDERED BY PROSPECTIVE PURCHASERS.
The Units have been approved for listing on the New York Stock Exchange ('NYSE')
under the symbol 'SB PrG', subject to official notice of issuance. Prior to this
offering there has been no public market for the Units. In the event that a
Preferred Security is separated from the related Purchase Contract, the
resulting separated Purchase Contract will not be transferable without the prior
written consent of the Company and will not be tradable on the NYSE. The
Preferred Securities will not be listed or traded on any securities exchange.
Unless and until a significant number of Preferred Securities are separated from
the related Purchase Contracts, there will be no market for the Preferred
Securities and even then there is not expected to be a market for Preferred
Securities separate from the Units. The Depositary Shares have been approved for
listing on the NYSE, subject to official notice of issuance. The Series F
Preferred Stock will not be listed and the Company does not expect that there
will be any trading market for the Series F Preferred Stock except as
represented by the Depositary Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
Per Unit..............
Total(3)..............
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</TABLE>
(1) Plus accrued distributions on the Preferred Securities and Contract Fees, if
any, from , 1996.
(2) Before deducting expenses payable by the Company estimated to be
$ .
(3) The Company and the Trust have granted to the Underwriters a 30-day option
to purchase up to an aggregate of 1,500,000 additional Units at the Price to
Public, less the Underwriting Discount, solely to cover over-allotments, if
any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $ ,
$ and $ , respectively. See 'Underwriting.'
The Units are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Units will be made through the facilities of The Depository
Trust Company, on or about , 1996.
The Company or one or more of its subsidiaries may from time to time purchase or
acquire a position in the Units and may, at its option, hold or resell such
Units. Salomon Brothers Inc, an indirect wholly owned subsidiary of the Company,
expects to offer and sell previously issued Units in the course of its business
as a broker-dealer. Salomon Brothers Inc may act as principal or agent in such
transactions. This Prospectus may be used by the Company or any of its
subsidiaries, including Salomon Brothers Inc, in connection with such
transactions. Such sales, if any, will be made at varying prices related to
prevailing market prices at the time of sale.
*Salomon Inc has filed applications with the United States Patent and Trademark
Office for the registration of the Trust Preferred Stock and TRUPS service
marks.
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SALOMON BROTHERS INC
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The date of this Prospectus is , 1996.
<PAGE>
(continued from previous page)
Each Unit will entitle the holder thereof to receive % of the Stated Amount
per annum (equivalent to $ per annum), consisting of (i) % per annum of
the Stated Amount in distributions on the related Preferred Security and (ii)
% per annum of the Stated Amount in Contract Fees (as defined herein).
Distributions on the Preferred Securities and Contract Fees will accrue from the
date of original issuance of the Units and will be payable quarterly in arrears
on each , , and
(each, a 'Payment Date'), commencing on , 1996. In addition, each
Unit will entitle the holder thereof to all other proportional rights and
preferences of the Preferred Securities (including voting, redemption, repayment
and liquidation rights).
Each Depositary Share will entitle the holder thereof to all proportional rights
and preferences of the Series F Preferred Stock (including dividend, voting,
redemption and liquidation rights). The proportionate liquidation preference of
each Depositary Share will be $25. See 'Description of the Depositary Shares.'
Dividends on the Series F Preferred Stock will be cumulative from the date of
issue and will be payable quarterly on each Payment Date at the rate of %
per annum (equivalent to $ per annum per Depositary Share). See
'Description of the Depositary Shares-- Dividends and Other Distributions.' The
Series F Preferred Stock will be redeemable at the option of the Company at any
time on or after the later of , 2001 or the date of issue, in
whole or in part, at a redemption price of $500 per share (equivalent to $25 per
Depositary Share), plus accrued and unpaid dividends to the redemption date.
Each Preferred Security will represent a preferred undivided beneficial interest
in the assets of the Trust. The Company will, directly or indirectly, own all
the common securities (the 'Common Securities' and, together with the Preferred
Securities, the 'Trust Securities') representing undivided beneficial interests
in the assets of the Trust. The Trust exists for the sole purpose of issuing the
Preferred Securities and Common Securities and investing the proceeds thereof in
the % Subordinated Debt Securities due , 2026 (the
'Subordinated Debt Securities') of the Company. Upon an event of default under
the Declaration (as defined herein), the holders of Preferred Securities will
have a preference over the holders of the Common Securities with respect to
payments in respect of distributions and payments upon redemption, liquidation
or otherwise. The payment of distributions out of money held by the Trust, and
payments upon redemption or repayment of the Preferred Securities or liquidation
of the Trust, as described below, are guaranteed by the Company (the
'Guarantee') to the extent described under 'Description of the Guarantee.' The
Guarantee covers payments of distributions and other payments on the Preferred
Securities only if and to the extent that the Trust has funds available therefor
which will not be the case unless the Company has made a payment of interest or
principal or other payments on the Subordinated Debt Securities held by the
Trust as its sole asset. The Guarantee, when taken together with the Company's
obligations under the Subordinated Debt Securities and the Indenture (as defined
herein) and its obligations under the Declaration (as defined herein), including
its liabilities to pay costs, expenses, debts and obligations of the Trust
(other than with respect to the Trust Securities), provides a full and
unconditional guarantee of amounts due on the Preferred Securities. See 'Risk
Factors--Rights under the Guarantee.' The obligations of the Company under the
Guarantee will be subordinate and junior in right of payment to all other
liabilities of the Company and pari passu with the most senior preferred stock
issued from time to time by the Company. The obligations of the Company under
the Subordinated Debt Securities are subordinate and junior in right of payment
to all present and future Senior Indebtedness (as defined herein) of the
Company, which aggregated approximately $96.1 billion at March 31, 1996, and
rank pari passu with the Company's other general unsecured obligations.
The Subordinated Debt Securities purchased by the Trust may be subsequently
distributed pro rata to holders of the Preferred Securities and Common
Securities in connection with the dissolution of the Trust at any time at the
option of the Company or upon the occurrence of certain events. In the event the
Subordinated Debt Securities are distributed to the holders of the Preferred
Securities, a Unit will thereafter consist of a Subordinated Debt Security and a
related Purchase Contract and a Unitholder
2
<PAGE>
may cause such Subordinated Debt Security to be repaid and the proceeds thereof
to be used to pay the purchase price of a Depositary Share under the Purchase
Contract.
The distribution rate and the payment dates for the Preferred Securities will
correspond to the interest rate and the payment dates on the Subordinated Debt
Securities, which will be the sole assets of the Trust. As a result, if
principal or interest is not paid on the Subordinated Debt Securities, no
amounts will be paid on the Preferred Securities. If the Company does not make
principal or interest payments on the Subordinated Debt Securities, the Trust
will not have sufficient funds to make distributions on the Preferred
Securities, in which event the Guarantee will not apply to such distributions
until the Trust has sufficient funds available therefor.
The Subordinated Debt Securities will be redeemable at the option of the
Company, in whole (but not in part), on or after , 2001 on any
Payment Date; provided, however, that after the settlement date for the Purchase
Contracts, the right of the Company to redeem any Subordinated Debt Securities
that remain outstanding will be postponed or suspended until the fifth
anniversary of such date. If the Company redeems the Subordinated Debt
Securities, the Trust must redeem the Trust Securities at the Stated Amount
thereof plus any accrued and unpaid distributions thereon to the date of
redemption (subject to the right of holders of record on the relevant record
date to receive distributions due on a Payment Date) (the 'Redemption Price')
and any outstanding Purchase Contracts will terminate. Any Preferred Securities
not previously redeemed will be redeemed upon maturity of the Subordinated Debt
Securities. See 'Description of the Preferred Securities--Mandatory Redemption.'
In addition, upon the occurrence of a Tax Event (as defined herein) or
Investment Company Event (as defined herein), unless the Subordinated Debt
Securities are redeemed in the limited circumstances described herein, the Trust
will be dissolved with the result that the Subordinated Debt Securities will be
distributed to the holders of the Preferred Securities and Common Securities, on
a pro rata basis, in lieu of any cash distribution. In certain circumstances in
the case of a Tax Event, the Company will have the right to redeem the
Subordinated Debt Securities, which would result in the redemption by the Trust
of the Trust Securities in the same amount on a pro rata basis and the
termination of any outstanding Purchase Contracts. See 'Description of the
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution; Optional Distribution.'
In the event of the liquidation of the Trust, either (i) the holders of the
Preferred Securities will be entitled to receive for each Preferred Security the
Stated Amount plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment and any outstanding Purchase Contracts will
terminate or (ii) the Subordinated Debt Securities will be distributed to the
holders of the Preferred Securities. See 'Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution.'
The Preferred Securities initially will be pledged with the Collateral Agent (as
defined herein) to secure the obligations of Unitholders to purchase the
Depositary Shares under the Purchase Contracts. A Preferred Security may be
separated from the related Purchase Contract at the option of a Unitholder prior
to settlement of the Purchase Contract by the delivery to the Collateral Agent
of Eligible Collateral (as defined herein) having an aggregate principal amount
equal to the Stated Amount of such Preferred Security. See 'Description of the
Units--Separation of Preferred Security from the Related Purchase Contract.' The
Eligible Collateral will be pledged with the Collateral Agent as substitute
collateral to secure such Unitholder's obligation under the separated Purchase
Contract. Upon separation of the Preferred Security from a Purchase Contract,
the related Unit will cease to be outstanding and the Preferred Security will be
released to the holder of the separated Purchase Contract (each Unitholder or
holder of a separated Purchase Contract, a 'Holder'). Thereafter, the separated
Purchase Contract will be nontransferable without the prior written consent of
the Company. There can be no assurance that the Units will not be delisted from
the NYSE or that trading in the Units on the NYSE will not be suspended in the
event that there is a significant decrease in the number of outstanding Units as
a result of the election by Unitholders to separate the Preferred Securities
from the related Purchase Contracts which would cause the number of Units to
fall below the minimum requirements for the listing of securities on the NYSE.
See 'Risk Factors--Absence of Trading Market; Separation of Units.'
3
<PAGE>
The Collateral Agent will pay directly to Holders of separated Purchase
Contracts any distributions received on the Eligible Collateral, and if at any
time the aggregate principal amount at maturity of the Holder's Eligible
Collateral exceeds the required principal amount of Eligible Collateral, such
excess amount will be released to the Holder at the Holder's request. See
'Description of the Units-- Reinvestment of Eligible Collateral' and
'--Distributions on Collateral.' A Holder of a separated Purchase Contract may
reestablish prior to settlement of the Purchase Contract a transferable Unit
consisting of a Preferred Security and a related Purchase Contract by delivering
a Preferred Security to the Collateral Agent in exchange for the release of
Eligible Collateral having a corresponding aggregate principal amount.
The Company may, at its option, accelerate, in whole (but not in part), the
settlement of the Purchase Contracts to any Payment Date. See 'Description of
the Units--Description of the Purchase Contracts--Acceleration of Purchase.' A
Unitholder may settle a Purchase Contract by instructing the Collateral Agent to
present the related Preferred Security to the Trust for repayment and to apply
$25 of the proceeds therefrom in satisfaction of the Purchase Contract (a
'Collateral Settlement') or by delivering $25 in cash to the Collateral Agent (a
'Cash Settlement'), in each case on the Business Day immediately prior to the
settlement date for the Purchase Contract, provided that failure to provide
instructions or deliver cash will be deemed to be an election to effect a
Collateral Settlement. To the extent a Unitholder effects a Cash Settlement, the
related Preferred Security will be released to the Unitholder. A Holder of a
separated Purchase Contract will be required to settle such Purchase Contract
from the proceeds of the related Eligible Collateral. See 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
Upon the settlement of the Purchase Contracts on , 2021 or
earlier if the Purchase Contracts are accelerated, the Units and any separated
Purchase Contracts will cease to be outstanding.
Holders of Preferred Securities that have been separated from Purchase Contracts
will have the right to require the Trust to repay such Preferred Securities on
the Business Day immediately prior to the settlement date for the Purchase
Contracts.
Holders of Preferred Securities that remain outstanding after an accelerated
settlement date for the Purchase Contracts will have the right to require the
Trust to repay such Preferred Securities on the fifth anniversary of such date.
See 'Description of the Units--Description of the Purchase Contracts-- Payment
of Purchase Price; Delivery of Depositary Shares.'
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE UNITS OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at Seven World Trade Center, 13th Floor, New York, New York
10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained upon written request
addressed to the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy
statements and other information concerning the Company may be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005 and at the offices of the American Stock Exchange, 86 Trinity Place,
New York, New York 10006.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
'Registration Statement') under the Securities Act of 1933, as amended (the
'Securities Act') relating to the Securities. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement and to the exhibits thereto. Statements contained herein
concerning the provisions of certain documents are not necessarily complete, and
in each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission pursuant
to Section 13 of the Exchange Act (File No. 1-4346), are incorporated herein by
reference: (i) the Annual Report on Form 10-K for the year ended December 31,
1995; (ii) the Quarterly Report on Form 10-Q for the quarter ended March 31,
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 and
June 5, 1996.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing such reports and documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of any such person, a copy of any or all of the documents
incorporated herein by reference, except the exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents).
Written requests for such copies should be directed to the Corporate Secretary,
Salomon Inc, Seven World Trade Center, New York, New York 10048. Telephone
requests for such copies should be directed to the Corporate Secretary at (212)
783-7000.
5
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus. Investors should carefully
consider the information set forth under the heading 'Risk Factors.' For
definitions of capitalized terms used in this Prospectus, see 'Glossary of
Defined Terms.'
THE OFFERING
<TABLE>
<S> <C>
Units Offered............................. 10,000,000 % Trust Preferred StockSM (TRUPSSM) Units.
Each Unit will consist of (i) a % Preferred Security of SI
Financing Trust I and (ii) a Purchase Contract requiring the purchase
on , 2021 (or earlier as described below) of one
Depositary Share representing a one-twentieth interest in a share of
% Cumulative Preferred Stock, Series F, of Salomon Inc at a
purchase price of $25 per Depositary Share. A Unitholder may cause a
Preferred Security to be repaid and the proceeds thereof to be used
to pay the purchase price of a Depositary Share under the Purchase
Contract.
Distributions and Contract Fees........... Each Unit will entitle the holder thereof to receive % of the
Stated Amount per annum (equivalent to $ per annum),
consisting of (i) % per annum of the Stated Amount in
distributions on the related Preferred Security and (ii) % per
annum of the Stated Amount in Contract Fees. Distributions on the
Preferred Securities and Contract Fees will accrue from the date of
original issuance of the Units and will be payable quarterly in
arrears on each , , and (each, a
'Payment Date'), commencing , 1996.
Depositary Shares......................... Each Depositary Share will entitle the holder thereof to all
proportional rights and preferences of the Series F Preferred Stock
(including dividend, voting, redemption and liquidation rights). The
proportionate liquidation preference of each Depositary Share will be
$25. Dividends on the Series F Preferred Stock will be cumulative
from the date of issue and will be payable quarterly on each Payment
Date at the rate of % per annum (equivalent to $ per annum
per Depositary Share). The Series F Preferred Stock will be
redeemable at the option of the Company at any time on or after the
later of , 2001 or the date of issue, in whole or in part,
at a redemption price of $500 per share (equivalent to $25 per
Depositary Share), plus accrued and unpaid dividends to the
redemption date.
Preferred Securities...................... Each Preferred Security will represent a preferred undivided
beneficial interest in the assets of the Trust. The Trust exists for
the sole purpose of issuing the Preferred Securities and the Common
Securities (which will be owned directly or indirectly by the
Company) and investing the proceeds thereof in the % Subordinated
Debt Securities due , 2026 of the Company. The
distribution rate and the payment dates for the Preferred Securities
will correspond to the interest rate and the payment dates on the
Subordinated Debt Securities, which will be the sole assets of the
Trust. As a result, if principal or
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6
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<TABLE>
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interest is not paid on the Subordinated Debt Securities, no amounts
will be paid on the Preferred Securities.
Distribution of Subordinated Debt
Securities.............................. The Subordinated Debt Securities purchased by the Trust may be
subsequently distributed pro rata to holders of the Preferred
Securities and Common Securities in connection with the dissolution
of the Trust at any time at the option of the Company or upon the
occurrence of certain events. In the event the Subordinated Debt
Securities are distributed to the holders of the Preferred
Securities, a Unit will thereafter consist of a Subordinated Debt
Security and a related Purchase Contract and a Unitholder may cause
such Subordinated Debt Security to be repaid and the proceeds thereof
to be used to pay the purchase price of a Depositary Share under the
Purchase Contract.
Redemption of Preferred Securities;
Termination of Purchase
Contracts; Tax Event or Investment
Company Event........................... Upon the optional redemption by the Company of the Subordinated Debt
Securities, the Preferred Securities will be redeemed at the Stated
Amount thereof plus any accrued and unpaid distributions thereon to
the date of redemption and any outstanding Purchase Contracts will
terminate. The Subordinated Debt Securities will be redeemable at the
option of the Company, in whole (but not in part), on and after
, 2001 on any Payment Date; provided, however, that after
the settlement date for the Purchase Contracts, the right of the
Company to redeem any Subordinated Debt Securities that remain
outstanding will be postponed or suspended until the fifth
anniversary of such date. Any Preferred Securities not previously
redeemed will be redeemed on maturity of the Subordinated Debt
Securities. In addition, upon the occurrence of a Tax Event or
Investment Company Event, unless the Subordinated Debt Securities are
redeemed in the limited circumstances described herein, the Trust
will be dissolved with the result that the Subordinated Debt
Securities will be distributed to the holders of the Preferred
Securities and Common Securities, on a pro rata basis, in lieu of any
cash distribution. In certain circumstances in the case of a Tax
Event, the Company will have the right to redeem the Subordinated
Debt Securities, which would result in the redemption by the Trust of
the Trust Securities in the same amount on a pro rata basis and the
termination of any outstanding Purchase Contracts.
Liquidation............................... In the event of the liquidation of the Trust, either (i) the holders
of the Preferred Securities will be entitled to receive for each
Preferred Security the Stated Amount plus accrued and unpaid
distributions thereon (including interest thereon) to the date of
payment and any outstanding Purchase Contracts will terminate or (ii)
the Subordinated Debt Securities will be distributed to the holders
of the Preferred Securities.
Guarantee................................. The payment of distributions out of money held by the Trust, and
payments upon redemption or repayment of the Preferred
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Securities or liquidation of the Trust, are guaranteed by the Company
to the extent described under 'Description of the Guarantee.' The
Guarantee does not cover payment of distributions when the Trust does
not have sufficient available funds to pay such distributions. The
Guarantee, when taken together with the Company's obligations under
the Subordinated Debt Securities and the Indenture and its
obligations under the Declaration, including its liabilities to pay
costs, expenses, debts and obligations of the Trust (other than with
respect to the Trust Securities), provides a full and unconditional
guarantee of amounts due on the Preferred Securities.
Pledge of Preferred Securities or Eligible
Collateral.............................. The Preferred Securities initially will be pledged with The Bank of
New York, as Collateral Agent for the Company (the 'Collateral
Agent'), to secure the obligation of Unitholders to purchase the
Depositary Shares under the Purchase Contracts. A Preferred Security
may be separated from the related Purchase Contract prior to
settlement of the Purchase Contract at the option of the Unitholder
by the delivery to the Collateral Agent of (i) cash or (ii) U.S.
Treasury Securities with a maturity of 30 days or less at the time of
determination ('Eligible Collateral') having an aggregate principal
amount equal to the Stated Amount of such Preferred Security. See
'Description of the Units--Separation of Preferred Security from the
Related Purchase Contract.' The Eligible Collateral will be pledged
with the Collateral Agent as substitute collateral to secure such
Unitholder's obligation under the separated Purchase Contract. Upon
separation of the Preferred Security from a Purchase Contract, the
related Unit will cease to be outstanding and the Preferred Security
will be released to the Holder of the separated Purchase Contract.
Thereafter, the separated Purchase Contract will be nontransferable
without the prior written consent of the Company. There can be no
assurance that the Units will not be delisted from the NYSE or that
trading in the Units on the NYSE will not be suspended in the event
that there is a significant decrease in the number of outstanding
Units as a result of the election by Unitholders to separate the
Preferred Securities from the related Purchase Contracts which would
cause the number of Units to fall below the minimum requirements for
the listing of securities on the NYSE. See 'Risk Factors--Absence of
Trading Market; Separation of Units.'
The Collateral Agent will pay directly to Holders of separated
Purchase Contracts any distributions received on the Eligible
Collateral, and if at any time the aggregate principal amount at
maturity of such holder's Eligible Collateral exceeds the required
principal amount of Eligible Collateral, such excess amount will be
released to such Holder at the Holder's request.
Reestablishment of Unit................... A Holder of a separated Purchase Contract may reestablish prior to
settlement of the Purchase Contract a transferable Unit consisting of
a Preferred Security and a related Purchase Contract by delivering a
Preferred Security to the Collateral Agent in exchange for the
release of Eligible Collateral having a corresponding aggregate
principal amount.
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Acceleration of Purchase Contracts........ The Company may, at its option, on not less than 45 nor more than 60
days' notice, accelerate, in whole (but not in part), the settlement
of the Purchase Contracts to any Payment Date, subject to
cancellation or rescission in certain circumstances. The Company
might, for example, choose to accelerate the settlement of the
Purchase Contracts for any of the following reasons: (i) if the
Company is required to comply with the capital requirements of any
applicable laws or regulations, (ii) if the rating agencies in their
analysis of the Company's capital structure no longer treat the Units
similarly to the Company's perpetual preferred stock, (iii) for
accounting reasons, including if the Preferred Securities are no
longer recorded on the Company's consolidated balance sheet as
described under 'Accounting Treatment' or the Company desires to
reclassify the Preferred Securities as equity, (iv) if the Company
desires to meet any future capital structure goal or (v) for tax
reasons, including if for Federal income tax purposes the
Subordinated Debt Securities are no longer classified as indebtedness
of the Company. See 'Description of the Units--Description of the
Purchase Contracts--Acceleration of Purchase.'
Settlement of Purchase Contracts; Certain
Rights of Holders of Preferred
Securities.............................. A Unitholder may settle a Purchase Contract by instructing the
Collateral Agent to present the related Preferred Security to the
Trust for repayment and to apply $25 of the proceeds therefrom in
satisfaction of the Purchase Contract (a 'Collateral Settlement') or
by delivering $25 in cash to the Collateral Agent (a 'Cash
Settlement'). To the extent a Unitholder effects a Cash Settlement,
the related Preferred Security will be released to the Unitholder. A
Holder of a separated Purchase Contract will be required to settle
the Purchase Contract from the proceeds of the related Eligible
Collateral. See 'Description of the Units-- Description of the
Purchase Contracts--Payment of Purchase Price; Delivery of Depositary
Shares.'
A Unitholder may effect a Cash Settlement by (a) providing the Unit
Agent with notice of its election to effect a Cash Settlement not
less than 10 nor more than 30 days prior to the settlement date for
the Purchase Contract and (b) making a payment of the purchase price
to the Collateral Agent prior to 9:00 a.m., New York City time, on
the Business Day immediately preceding the settlement date. A
Unitholder may effect a Collateral Settlement by directing the Unit
Agent not less than 10 nor more than 30 days prior to the settlement
date for the Purchase Contract to instruct the Collateral Agent to
present the related Preferred Security to the Trust for repayment
prior to 10:00 a.m., New York City time, on the Business Day
immediately preceding the settlement date. A Unitholder who does not
make an effective Cash Settlement or direct the Unit Agent to deliver
an instruction for a Collateral Settlement will be deemed to have
elected a Collateral Settlement.
</TABLE>
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<TABLE>
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Upon the settlement of the Purchase Contracts on, ,
2021 or earlier if the Purchase Contracts are accelerated, the Units
and any separated Purchase Contracts will cease to be outstanding.
Holders of Preferred Securities that have been separated from
Purchase Contracts will have the right to require the Trust to repay
such Preferred Securities on the Business Day immediately prior to
the settlement date for the Purchase Contracts.
Holders of Preferred Securities that remain outstanding after an
accelerated settlement date for the Purchase Contracts will have the
right to require the Trust to repay such Preferred Securities on the
fifth anniversary of such date. See 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase
Price; Delivery of Depositary Shares.'
Listing................................... The Units have been approved for listing on the NYSE under the symbol
'SB PrG', subject to official notice of issuance. Prior to this
offering there has been no public market for the Units. In the event
the Preferred Security is separated from the related Purchase
Contract, the resulting separated Purchase Contract will not be
tradable on the NYSE. The Preferred Securities will not be listed or
traded on any securities exchange, and unless and until a significant
number of Preferred Securities are separated from the related
Purchase Contracts, there will be no market for the Preferred
Securities. The Depositary Shares have been approved for listing on
the NYSE, subject to official notice of issuance. The Series F
Preferred Stock will not be listed and the Company does not expect
that there will be any trading market for the Series F Preferred
Stock except as represented by the Depositary Shares.
Certain Potential Benefits of Investment
in Units................................ The Company expects that the aggregate rate of the distributions on
the Preferred Securities and the Contract Fees will be higher than
the dividend rate that the Company would be required to pay if the
Company were to issue directly shares of its preferred stock in lieu
of issuance of the Units. In addition, a Unitholder will have the
option (i) to retain the related Preferred Security by making a Cash
Settlement of the Purchase Contract, which Preferred Security will be
non-redeemable by the Company for five years from the settlement of
the Purchase Contract and may be presented to the Trust for repayment
by the holder on the fifth anniversary of such settlement, or (ii) to
separate the related Preferred Security from the Purchase Contract at
any time prior to the settlement of the Purchase Contract by
depositing Eligible Collateral with the Collateral Agent in exchange
for such Preferred Security. In making the determination whether to
elect a Cash Settlement, a Unitholder should give careful
consideration at the time of such determination to, among other
things, prevailing interest rates on securities with terms similar to
the Preferred Security, the credit quality of the Company and the
terms of the Preferred Security. A Unitholder might elect a Cash
Settlement if, for example, the interest rate on securities
</TABLE>
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<TABLE>
<S> <C>
with similar terms and of similar credit quality were lower than the
interest rate on the Preferred Security. In the event a Holder's
Purchase Contract is secured by Eligible Collateral, the proceeds
from the Eligible Collateral will be applied automatically to the
settlement of the Purchase Contract without any exercise of
discretion by the Holder.
In Respect of the Company:
Certain Federal Income Tax Consequences;
Rating Agencies Treatment; and
Accounting Treatment.................... Tax counsel to the Company has advised the Company that the
Subordinated Debt Securities will be classified for Federal income
tax purposes as indebtedness of the Company. See 'United States
Federal Income Taxation.' It is the Company's understanding that the
rating agencies, in their analysis of the Company's capital
structure, will treat the Units similarly to the Company's perpetual
preferred stock. On the Company's consolidated balance sheet, the
Subordinated Debt Securities will not be recorded and the Preferred
Securities and Purchase Contracts will be recorded as described under
'Accounting Treatment.'
Forms of Securities....................... Units and Preferred Securities will be issued in book-entry form and
represented by a global certificate or certificates registered in the
name of Cede & Co., as nominee for The Depository Trust Company
('DTC'). Separated Purchase Contracts secured by Eligible Collateral
will be represented by a certificate or certificates that will be in
definitive form only. It is expected that Depositary Receipts (as
defined herein) evidencing the Depositary Shares will be issued in
book-entry form and represented by a global certificate or
certificates registered in the name of Cede & Co., as nominee for
DTC.
Unit Agreement; Unit Agent................ The Units will be issued under the Unit Agreement to be dated as of
, 1996 (the 'Unit Agreement'), between the Company and
Chemical Bank, a New York banking corporation, as the agent for the
Holders of Units and separated Purchase Contracts from time to time
(together with any successor thereto in such capacity, the 'Unit
Agent'). The Unit Agreement will not be qualified as an indenture
under the Trust Indenture Act (as defined herein), and the Unit Agent
will not be required to qualify as a trustee thereunder.
</TABLE>
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RISK FACTORS
Prospective purchasers of the Units should carefully review the information
contained elsewhere in this Prospectus and should particularly consider the
following matters:
HOLDERS WILL BE REQUIRED TO PURCHASE DEPOSITARY SHARES
Pursuant to the Purchase Contract, the Company may require each Holder to
purchase a Depositary Share on any Payment Date. Accordingly, each Unitholder
must be prepared to purchase the Depositary Share for cash or instruct the
Collateral Agent to present such Unitholder's related Preferred Security to the
Trust for repayment. A failure to deliver cash or provide instructions to the
Collateral Agent will be deemed to be an election to effect a Collateral
Settlement by the Unitholder. A Holder of a separated Purchase Contract will be
required to purchase the Depositary Share from the proceeds of the related
Eligible Collateral. Thus, following the settlement of the Purchase Contract, a
Unitholder who does not elect to effect a Cash Settlement will own a Depositary
Share rather than a beneficial interest in a pledged Preferred Security, and a
Holder of a separated Purchase Contract will own a Depositary Share rather than
a beneficial interest in Eligible Collateral, and the market value of the
Depositary Share may be materially different than the value of the Preferred
Security or Eligible Collateral. Moreover, prospective purchasers should
consider that upon a Collateral Settlement of a Purchase Contract, a Unitholder
will effectively exchange the Preferred Security of the Trust, whose assets
consist of the Subordinated Debt Securities, for a Depositary Share representing
a one-twentieth interest in a share of Series F Preferred Stock, which will be
subordinated in right of payment to all existing and future indebtedness of the
Company.
NO ADJUSTMENT OF DIVIDEND ON SERIES F PREFERRED STOCK
Prospective purchasers should consider the fact that the dividend rate of
the Series F Preferred Stock will not be adjusted to reflect subsequent changes
in interest rates or the financial condition of the Company. Accordingly, the
market value of a Depositary Share on a Purchase Date may be more or less than
$25, the purchase price of a Depositary Share.
NO RELATIONSHIP BETWEEN EVENTS OF DEFAULT WITH RESPECT TO SUBORDINATED DEBT
SECURITIES OR PREFERRED SECURITIES AND OBLIGATIONS UNDER PURCHASE CONTRACTS
The obligation of a Holder under a Purchase Contract to purchase a
Depositary Share will not be terminated or otherwise affected by the occurrence
and continuance of an Event of Default (as defined herein) with respect to
Subordinated Debt Securities or a Declaration Event of Default (as defined
herein) with respect to the Preferred Securities. The Purchase Contracts will
terminate, however, if the Company redeems the Subordinated Debt Securities or,
in certain circumstances, the Preferred Securities are not repaid at the Stated
Purchase Date (as defined herein). See 'Description of the Units--Description of
the Purchase Contracts--Termination.' In addition, the Company will not be
entitled to accelerate the obligation of a Holder under a Purchase Contract if,
in certain circumstances, the Preferred Securities are not repaid at an Early
Purchase Date (as defined herein). See 'Description of the Units--Description of
the Purchase Contracts--Payment of Purchase Price; Delivery of Depositary
Shares.'
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION; OPTIONAL
DISTRIBUTION
Upon the occurrence of a Tax Event, an Investment Company Event or an
Optional Distribution (as defined herein), the Trust will be dissolved (except
in the limited circumstances described in the following sentence) with the
result that the Subordinated Debt Securities will be distributed to the holders
of the Trust Securities. In certain circumstances involving a Tax Event, the
Company will have the right to redeem the Subordinated Debt Securities, in whole
(but not in part), in which event the Trust will redeem Trust Securities on a
pro rata basis to the same extent as the Subordinated Debt Securities
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<PAGE>
are redeemed. See 'Description of the Preferred Securities--Tax Event or
Investment Company Event Redemption or Distribution; Optional Distribution.'
Under current United States Federal income tax law, a distribution of
Subordinated Debt Securities upon the dissolution of the Trust would not be a
taxable event to holders of the Preferred Securities, including the Collateral
Agent. Upon occurrence of a Tax Event, however, a dissolution of the Trust in
which holders of the Preferred Securities receive cash would be a taxable event
to such holders, provided, however, that the initial Holders of the related
Units should not recognize gain or loss because such Holders' tax basis in the
Preferred Securities will equal the amount of cash received. See 'United States
Federal Income Taxation--U.S. Holders--Redemption of Preferred Securities and
Cancellation of Purchase Contract.'
There can be no assurance as to the impact on the market prices for the
Units of a distribution of the Subordinated Debt Securities in exchange for
Preferred Securities upon a dissolution or liquidation of the Trust. Because the
Units will consist of Subordinated Debt Securities and related Purchase
Contracts upon the occurrence of an Investment Company Event, an Optional
Distribution or, in certain circumstances, a Tax Event or liquidation of the
Trust, prospective purchasers of Units are also making an investment decision
with regard to the Subordinated Debt Securities and should carefully review all
the information regarding the Subordinated Debt Securities contained herein. See
'Description of the Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution; Optional Distribution' and 'Description of the
Subordinated Debt Securities--General.'
UNIT AGREEMENT NOT QUALIFIED UNDER TRUST INDENTURE ACT; LIMITED OBLIGATIONS OF
UNIT AGENT
Although the Preferred Securities constituting a part of the Units will be
issued pursuant to a Declaration (as defined herein) qualified under the Trust
Indenture Act of 1939, as amended (the 'Trust Indenture Act'), the Unit
Agreement will not be qualified as an indenture under the Trust Indenture Act,
and the Unit Agent will not be required to qualify as a trustee thereunder.
Accordingly, Holders will not have the benefit of the protection of the Trust
Indenture Act. The protections generally afforded the holder of a security
issued under an indenture that has been qualified under the Trust Indenture Act
include disqualification of the indenture trustee for 'conflicting interests' as
defined under the Trust Indenture Act, provisions preventing a trustee that is
also a creditor of the issuer from improving its own credit position at the
expense of the security holders immediately prior to or after a default under
the indenture and the requirement that the indenture trustee deliver reports at
least annually with respect to certain matters concerning the indenture trustee
and the securities. Under the terms of the Unit Agreement, the Unit Agent will
not be required to resign as agent in the event of a 'conflicting interest,'
will not be obligated to establish a separate account for the benefit of Holders
in the case of a credit relationship with the Company at the time of a default
under the Unit Agreement and will not be required to furnish any annual reports.
With respect to the Preferred Security, a Unitholder, as the holder of an
underlying Preferred Security, will have the protections of the Declaration,
which will be qualified under the Trust Indenture Act.
ABSENCE OF TRADING MARKET; SEPARATION OF UNITS
There is no existing trading market for the Units and there can be no
assurance as to the liquidity of any such market that may develop, the ability
of the Unitholders to sell such securities, the price at which the Unitholders
would be able to sell such securities or whether a trading market, if it
develops, will continue. If such a market were to exist, the Units could trade
at prices higher or lower than their initial offering amount, depending on many
factors, including prevailing interest rates, the market for similar securities
and the operating results of the Company. Unless or until a significant number
of Preferred Securities are separated from the Units there will be no market for
the Preferred Securities. The Preferred Securities will not be listed on any
securities exchange, and, regardless of a listing or lack thereof, the same
considerations referred to above would be equally applicable to the Preferred
Securities. In addition, upon such separation, the separated Purchase Contract
will be nontransferable without the prior written consent of the Company.
Holders should carefully consider the likely illiquidity
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of the Preferred Securities and Purchase Contracts prior to making an election
to separate. See 'Description of the Units.'
The Units have been approved for listing on the NYSE under the symbol 'SB
PrG', subject to official notice of issuance. However, there can be no assurance
that, if so listed, the Units will not later be delisted or that trading in the
Units on the NYSE will not be suspended in the event that there is a significant
decrease in the number of outstanding Units as a result of the election by
Unitholders to separate the Preferred Securities from the related Purchase
Contracts which would cause the number of Units to fall below the minimum
requirements for the listing of securities on the NYSE. In the event of
delisting or suspension of trading on such market, the Company will apply for
quotation on another trading market or for listing of the Units on another
national securities exchange. If the Units are not listed or traded on any
securities exchange or trading market, or if trading of the Units is suspended,
pricing information for the Units may be difficult to obtain, and the liquidity
of the Units may be adversely affected.
The Depositary Shares have been approved for listing on the NYSE, subject
to official notice of issuance. The Series F Preferred Stock will not be listed
on an exchange and the Company does not expect that there will be any trading
market for the Series F Preferred Stock except as represented by the Depositary
Shares.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, Trustees, which voting rights are vested exclusively in
the Company as holder of the Common Securities. See 'Description of the
Preferred Securities--Voting Rights.'
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. The Unit Agent will act as the Guarantee Trustee under the Guarantee for
the purposes of compliance with the Trust Indenture Act. The Guarantee Trustee
will hold the Guarantee for the benefit of the holders of the Preferred
Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be paid
on the Preferred Securities to the extent the Trust has funds available
therefor, (ii) the Redemption Price, including all accrued and upaid
distributions, with respect to Preferred Securities called for redemption by the
Trust, to the extent the Trust has funds available therefor, (iii) the amount
payable with respect to any Preferred Securities presented for repayment by the
holders thereof to the extent the Trust has funds available therefor and (iv)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Trust (other than in connection with the distribution of Subordinated Debt
Securities to the holders of Preferred Securities or a redemption or repayment
of all the Preferred Securities), the lesser of (a) the aggregate of the Stated
Amount and all accrued and unpaid distributions on the Preferred Securities to
the date of payment, to the extent the Trust has funds available therefor, and
(b) the amount of assets of the Trust remaining available for distribution to
holders of Preferred Securities. The holders of a majority in liquidation amount
of the Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
or to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. Notwithstanding the foregoing, any holder of
Preferred Securities may institute a legal proceeding directly against the
Company to enforce such holder's rights to receive payment under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity. If the Company were to default on its
obligation to pay amounts payable on the Subordinated Debt Securities or
otherwise, the Trust would lack available funds for the payment of distributions
or amounts payable on redemption or repayment of the Preferred Securities or
otherwise, and in such event, holders of the Preferred
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Securities would not be able to rely upon the Guarantee for payment of such
amounts. Instead, holders of the Preferred Securities would rely on the
enforcement (i) by the Property Trustee of its rights as registered holder of
the Subordinated Debt Securities or (ii) by such holder of its rights against
the Company to enforce payments on the Subordinated Debt Securities. See
'Description of the Guarantee' and 'Description of the Subordinated Debt
Securities.' The Declaration provides that each holder of Preferred Securities,
by acceptance thereof, agrees to the provisions of the Guarantee, including the
subordination thereof, and the Indenture.
EFFECT OF PROPOSED CHANGES IN TAX LAWS
The Clinton Administration has proposed a number of statutory changes in
the Federal income tax rules concerning debt and equity. Under one such
proposal, debt with a maximum maturity of more than 20 years that is not shown
as debt on the applicable balance sheet of the issuer would be recharacterized
as equity of the issuer, with the result that interest would be non-deductible
to the issuer. Under another proposal, no interest deduction would be allowed to
the issuer on debt that is payable in equity of the issuer. These proposals
would generally apply to all debt issued on or after December 7, 1995. The first
proposal would, and the second proposal might, apply to the Subordinated Debt
Securities. If either proposal did apply, a Tax Event would occur.
However, the Chairmen of the House Ways and Means Committee and the Senate
Finance Committee, as well as the Ranking Minority Member of the House Ways and
Means Committee, have publicly indicated their intent that the proposals, if
enacted, would not apply to debt issued prior to the date of 'appropriate
Congressional action'. No such Congressional action has yet occurred or is
expected to occur prior to the issuance of the Units. Nevertheless, no assurance
can be given that a Tax Event will not occur.
NON-U.S. HOLDERS
A Non-U.S. Holder (as defined herein) will be subject to U.S. withholding
tax with respect to any Contract Fee payments, as well as dividends on the
Depositary Shares, at a rate of 30% unless an applicable income tax treaty
provides a lower rate. Individual Non-U.S. Holders of Units, Purchase Contracts
or Depositary Shares would also be potentially subject to U.S. estate tax. See
'United States Federal Income Taxation--Non-U.S. Holders.'
SALOMON INC
Salomon Inc conducts global investment banking, global securities and
commodities trading, and U.S. oil refining and gathering activities. Investment
banking activities are conducted by Salomon Brothers Holding Company Inc and its
subsidiaries ('Salomon Brothers'), including Salomon Brothers Inc. Salomon
Brothers provides capital raising, advisory, trading and risk management
services to its customers, and executes proprietary trading strategies on its
own behalf. Salomon Inc's commodities trading activities are conducted by the
Company's wholly-owned subsidiary, Phibro Inc., and its subsidiaries. Oil
refining and gathering activities are conducted by Basis Petroleum, Inc. At
March 31, 1996, the Company employed 8,365 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.
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RECENT DEVELOPMENTS
On April 23, 1996, the Company announced first quarter 1996 net income of
$276 million, compared to net income of $81 million in the same period a year
ago. Fully diluted earnings per share were $2.21 and $0.59 for the three month
periods ended March 31, 1996 and 1995, respectively. Book value per common share
was $37.98 at March 31, 1996.
ACCOUNTING TREATMENT
The financial statements of SI Financing Trust I will be reflected in the
Company's consolidated financial statements with the Preferred Securities shown
as 'company obligated mandatorily redeemable preferred securities of subsidiary
SI Financing Trust I, holding solely $ principal amount of % Subordinated
Debt Securities due , 2026 of Salomon Inc.' In addition, the Company's
consolidated financial statements will disclose, in an audited footnote, that
the Trust is wholly-owned and that the Company's obligations under the
Guarantee, the Subordinated Debt Securities, the Indenture and the Declaration,
in the aggregate, constitute a full and unconditional guarantee by the Company
of the Trust's obligations under the Preferred Securities. Under current
generally accepted accounting principles, the Purchase Contracts will not be
recorded on the Company's consolidated balance sheet but will be disclosed in
the footnotes to the financial statements. See 'Ratio of Earnings to Fixed
Charges.'
USE OF PROCEEDS
The proceeds to be received by the Company from the sale of the Securities
will be used for general corporate purposes, principally to fund the business of
its operating units and to fund investments in, or extensions of credit to, its
subsidiaries and to lengthen the average maturity of liabilities, which may
include the reduction of short-term liabilities or the refunding of maturing
indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratios of earnings to fixed
charges and earnings to fixed charges and preferred dividends for each of the
years 1995, 1994, 1993, 1992 and 1991.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings of Fixed Charges........................................ 1.12 0.83(1) 1.32 1.25 1.16
Ratio of Earnings to Fixed Charges and Preferred Dividends................ 1.10 0.81(1) 1.30 1.21 1.14
</TABLE>
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(1) For the year ended December 31, 1994, earnings as defined were inadequate to
cover fixed charges, including preferred dividends. The amount by which
fixed charges exceeded earnings as defined for the year ended December 31,
1994 was $834 million. The amount by which fixed charges, including
preferred dividends, exceeded earnings as defined for the year ended
December 31, 1994 was $963 million.
Such ratios were calculated by dividing fixed charges and tax equivalent
preferred dividends into the sum of earnings before taxes and fixed charges.
Fixed charges consist largely of interest expense, including capitalized
interest, and a portion of rental expense representative of the interest factor.
Tax equivalent preferred dividends represent the pretax earnings necessary to
cover preferred stock dividend requirements, assuming such earnings are taxed at
the Company's consolidated effective income tax rate.
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SI FINANCING TRUST I
SI Financing Trust I is a statutory business trust formed under Delaware
law pursuant to (i) a declaration of trust, executed by the Company, as sponsor
(the 'Sponsor'), and the trustees of the Trust (the 'Company Trustees') and (ii)
the filing of a certificate of trust with the Secretary of State of the State of
Delaware. Such declaration will be amended and restated in its entirety (as so
amended and restated, the 'Declaration'), substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus is a part, upon
issuance of the Preferred Securities. The Declaration will be qualified under
the Trust Indenture Act. Upon issuance of the Preferred Securities, the
purchasers thereof will own all of the Preferred Securities. The Company will
directly or indirectly acquire Common Securities in an aggregate liquidation
amount equal to 3% of the total capital of the Trust. The Trust exists for the
exclusive purposes of (i) issuing the Trust Securities representing undivided
beneficial interests in the assets of the Trust, (ii) investing the gross
proceeds of the Trust Securities in the Subordinated Debt Securities and (iii)
engaging in only those other activities necessary or incidental thereto. The
Trust has a term of 35 years, but may terminate earlier as provided in the
Declaration.
Pursuant to the Declaration, the number of the Company Trustees will
initially be five. Three of the Company Trustees will be persons who are
employees or officers of the Company or affiliates of the Company (the 'Regular
Trustees'). The fourth Company Trustee will be an entity that maintains its
principal place of business in the state of Delaware (the 'Delaware Trustee').
Initially, Chemical Bank Delaware, a Delaware banking corporation, will be the
Delaware Trustee. The fifth Company Trustee will be a financial institution that
is unaffiliated with the Company and will serve as property trustee under the
Declaration and as indenture trustee for the purposes of the Trust Indenture Act
(the 'Property Trustee'). Initially, Chemical Bank, a New York banking
corporation, an affiliate of the Delaware Trustee, will be the Property Trustee
until removed or replaced by the holder of the Common Securities. For purposes
of compliance with the provisions of the Trust Indenture Act, Chemical Bank will
act as indenture trustee under the Guarantee (the 'Guarantee Trustee'). In
addition, Chemical Bank will act as the Unit Agent under the Unit Agreement.
The Property Trustee will hold title to the Subordinated Debt Securities
for the benefit of the holders of the Trust Securities and the Property Trustee
will have the power to exercise all rights, powers, and privileges under the
Indenture (as defined herein) as the holder of the Subordinated Debt Securities.
In addition, the Property Trustee will maintain exclusive control of a
segregated non-interest-bearing bank account (the 'Property Account') to hold
all payments made in respect of the Subordinated Debt Securities for the benefit
of the holders of the Trust Securities. The Property Trustee will make payments
of distributions and payments on liquidation, redemption, repayment and
otherwise to the holders of the Trust Securities out of funds from the Property
Account. The Guarantee Trustee will hold the Guarantee for the benefit of the
holders of the Preferred Securities. The Company, as the direct or indirect
holder of all the Common Securities, will have the right to appoint, remove or
replace any Company Trustee and to increase or decrease the number of Company
Trustees; provided that, (i) the number of Company Trustees shall be at least
three and (ii) at least two shall be Regular Trustees. The Company will pay all
fees and expenses related to the Trust, the offering of the Trust Securities and
the issuance of the Subordinated Debt Securities. See 'Description of the
Subordinated Debt Securities-- Miscellaneous.'
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the 'Trust Act') and the Trust
Indenture Act. See 'Description of the Preferred Securities.'
DESCRIPTION OF THE UNITS
The description of certain provisions of the Unit Agreement, the Pledge
Agreement, the Units and the Purchase Contracts does not purport to be complete
and is qualified in its entirety by reference to the Unit Agreement, the Pledge
Agreement, the Units and the Purchase Contracts, forms of which have
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been filed with the Commission as exhibits to the Registration Statement of
which this Prospectus is a part.
GENERAL
Each Unit will consist of (i) a Preferred Security of the Trust and (ii) a
related Purchase Contract requiring the purchase on , 2021 (or
earlier as described below) of one Depositary Share representing a one-twentieth
interest in a share of Series F Preferred Stock of the Company at a purchase
price of $25 per Depositary Share. A Unitholder may cause a Preferred Security
to be repaid and the proceeds thereof to be used to pay the purchase price of a
Depositary Share under the Purchase Contract.
Each Unit will entitle the holder thereof to receive % of the Stated
Amount per annum (equivalent to $ per annum), consisting of (i) %
per annum of the Stated Amount in distributions on the related Preferred
Security and (ii) % per annum of the Stated Amount in fees payable in respect
of the related Purchase Contract ('Contract Fees'). Distributions on the
Preferred Securities and Contract Fees will accrue from the date of original
issuance of the Units and will be payable quarterly in arrears on each Payment
Date, commencing , 1996. In addition, each Unit will entitle the
holder thereof to all other proportional rights and preferences of the Preferred
Securities (including voting, redemption, repayment and liquidation rights).
Each Depositary Share will entitle the holder thereof to all proportional
rights and preferences of the Series F Preferred Stock (including dividend,
voting, redemption and liquidation rights). The proportionate liquidation
preference of each Depositary Share will be $25. See 'Description of the
Depositary Shares.' Dividends on the Series F Preferred Stock will be cumulative
from the date of issue and will be payable quarterly on each Payment Date at the
rate of % per annum (equivalent to $ per annum per Depositary
Share). See 'Description of the Depositary Shares--Dividends and Other
Distributions.' The Series F Preferred Stock will be redeemable at the option of
the Company at any time on or after the later of , 2001 or the date
of issue, in whole or in part, at a redemption price of $500 per share
(equivalent to $25 per Depositary Share), plus accrued and unpaid dividends to
the redemption date.
Each Preferred Security will represent a preferred undivided beneficial
interest in the assets of the Trust. The Trust exists for the sole purpose of
issuing the Preferred Securities and Common Securities and investing the
proceeds thereof in the Subordinated Debt Securities of the Company. The
distribution rate and the payment dates for the Preferred Securities will
correspond to the interest rate and the payment dates on the Subordinated Debt
Securities, which will be the sole assets of the Trust. As a result, if
principal or interest is not paid on the Subordinated Debt Securities, no
amounts will be paid on the Preferred Securities. See 'Description of the
Preferred Securities' and 'Description of the Subordinated Debt Securities.'
The Subordinated Debt Securities purchased by the Trust may be subsequently
distributed pro rata to holders of the Preferred Securities and Common
Securities in connection with the dissolution of the Trust at any time at the
option of the Company or upon the occurrence of certain events. In the event the
Subordinated Debt Securities are distributed to the holders of the Preferred
Securities, a Unit will thereafter consist of a Subordinated Debt Security and a
related Purchase Contract and a Unitholder may cause such Subordinated Debt
Security to be repaid and the proceeds thereof to be used to pay the purchase
price of a Depositary Share under the Purchase Contract.
The Subordinated Debt Securities will be redeemable at the option of the
Company, in whole (but not in part), on or after , 2001 on any
Payment Date; provided, however, that after the settlement date for the Purchase
Contracts, the right of the Company to redeem any Subordinated Debt Securities
that remain outstanding will be postponed or suspended until the fifth
anniversary of such date. If the Company redeems the Subordinated Debt
Securities, the Trust must redeem the Trust Securities at the Redemption Price
and any outstanding Purchase Contracts will terminate. Any
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Preferred Securities not previously redeemed will be redeemed upon maturity of
the Subordinated Debt Securities. See 'Description of the Preferred
Securities--Mandatory Redemption.' In addition, upon the occurrence of a Tax
Event or Investment Company Event (as defined herein), unless the Subordinated
Debt Securities are redeemed in the limited circumstances described herein, the
Trust will be dissolved with the result that the Subordinated Debt Securities
will be distributed to the holders of the Preferred Securities and Common
Securities, on a pro rata basis, in lieu of any cash distribution. In certain
circumstances in the case of a Tax Event, the Company will have the right to
redeem the Subordinated Debt Securities, which would result in the redemption by
the Trust of the Trust Securities in the same amount on a pro rata basis and the
termination of any outstanding Purchase Contracts. See 'Description of the
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution; Optional Distribution.'
In the event of the liquidation of the Trust, either (i) the holders of the
Preferred Securities will be entitled to receive for each Preferred Security the
Stated Amount plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment and any outstanding Purchase Contracts will
terminate or (ii) the Subordinated Debt Securities will be distributed to the
holders of the Preferred Securities. See 'Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution.'
The payment of distributions out of money held by the Trust, and payments
upon redemption or repayment of the Preferred Securities or liquidation of the
Trust, are guaranteed by the Company to the extent described under 'Description
of the Guarantee.' The Guarantee does not cover payment of distributions when
the Trust does not have sufficient available funds to pay such distributions.
The Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities and the Indenture and its obligations under the
Declaration, including its liabilities to pay costs, expenses, debts and
obligations of the Trust (other than with respect to the Trust Securities),
provides a full and unconditional guarantee of amounts due on the Preferred
Securities.
The Preferred Securities initially will be pledged with the Collateral
Agent for the Company to secure the obligation of Unitholders to purchase the
Depositary Shares under the Purchase Contracts. A Preferred Security may be
separated from the related Purchase Contract prior to the settlement of the
Purchase Contract at the option of a Unitholder by the delivery of Eligible
Collateral having an aggregate principal amount equal to the Stated Amount of
such Preferred Security to the Collateral Agent. See '--Separation of Preferred
Security from the Related Purchase Contract.' The Eligible Collateral will be
pledged with the Collateral Agent as substitute collateral to secure such
Unitholder's obligation under the separated Purchase Contract (pledged Preferred
Securities and Eligible Collateral are, collectively, the 'Collateral'). Upon
separation of the Preferred Security from a Purchase Contract, the related Unit
will cease to be outstanding and the Preferred Security will be released to the
Holder of the separated Purchase Contract. Thereafter, the separated Purchase
Contract will be nontransferable without the prior written consent of the
Company. The Collateral Agent will pay directly to Holders of separated Purchase
Contracts any distributions received on the Eligible Collateral, and if at any
time the aggregate principal amount at maturity of the Holder's Eligible
Collateral exceeds the required principal amount of Eligible Collateral, such
excess amount will be released to the Holder at the Holder's request.
See '--Reinvestment of Eligible Collateral' and '--Distributions on Collateral.'
A Holder of a separated Purchase Contract may reestablish prior to the
settlement of the Purchase Contract a transferable Unit consisting of a
Preferred Security and a related Purchase Contract by delivering a Preferred
Security to the Collateral Agent in exchange for the release of Eligible
Collateral having a corresponding aggregate principal amount.
The Company may, at its option, accelerate, in whole (but not in part), the
settlement of the Purchase Contracts to any Payment Date. See '--Description of
the Purchase Contracts--Acceleration of Purchase.'
A Unitholder may settle a Purchase Contract by instructing the Collateral
Agent to present the related Preferred Security to the Trust for repayment and
to apply $25 of the proceeds therefrom in satisfaction of the Purchase Contract
(a 'Collateral Settlement') or by delivering $25 in cash to the
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Collateral Agent (a 'Cash Settlement'), provided that failure to provide
instructions or deliver cash will be deemed to be an election to effect a
Collateral Settlement. To the extent a Unitholder effects a Cash Settlement, the
related Preferred Security will be released to the Unitholder. A Holder of a
separated Purchase Contract will be required to settle the Purchase Contract
from the proceeds of the related Eligible Collateral. See '--Description of the
Purchase Contracts--Payment of Purchase Price; Delivery of Depositary Shares.'
Upon the settlement of the Purchase Contracts on , 2021 or
earlier if the Purchase Contracts are accelerated, the Units and any separated
Purchase Contracts will cease to be outstanding.
Holders of Preferred Securities that have been separated from Purchase
Contracts will have the right to require the Trust to repay such Preferred
Securities on the Business Day immediately prior to the settlement date for the
Purchase Contracts.
Holders of Preferred Securities that remain outstanding after an
accelerated settlement date for the Purchase Contracts will have the right to
require the Trust to repay such Preferred Securities on the fifth anniversary of
such date. See 'Description of the Units--Description of the Purchase
Contracts-- Payment of Purchase Price; Delivery of Depositary Shares.'
The Units have been approved for listing on the NYSE under the symbol 'SB
PrG', subject to official notice of issuance. Prior to this offering there has
been no public market for the Units. In the event the Preferred Security is
separated from the related Purchase Contract, the resulting separated Purchase
Contract will not be tradable on the NYSE. The Preferred Securities will not be
listed or traded on any securities exchange, and unless and until a significant
number of Preferred Securities are separated from the related Purchase
Contracts, there will be no market for the Preferred Securities and even then
there is not expected to be a market for Preferred Securities separate from the
Units. The Depositary Shares have been approved for listing on the NYSE, subject
to official notice of issuance. The Series F Preferred Stock will not be listed
and the Company does not expect that there will be any trading market for the
Series F Preferred Stock except as represented by the Depositary Shares.
Units and Preferred Securities will be issued in book-entry form and
represented by a global certificate or certificates registered in the name of
Cede & Co., as nominee for DTC. Separated Purchase Contracts secured by Eligible
Collateral will be represented by a certificate or certificates that will be in
definitive form only. See '--Separation of Preferred Security from the Related
Purchase Contract' and '--Book-Entry System.' It is expected that Depositary
Receipts evidencing the Depositary Shares will be issued in book-entry form and
represented by a global certificate or certificates registered in the name of
Cede & Co., as nominee for DTC.
The Units will be issued under the Unit Agreement to be dated as of
, 1996, between the Company and the Unit Agent. The Unit Agreement
will not be qualified as an indenture under the Trust Indenture Act, and the
Unit Agent will not be required to qualify as a trustee thereunder.
DESCRIPTION OF THE PURCHASE CONTRACTS
General
Each Purchase Contract will obligate the Holder to purchase, and the
Company to sell, on , 2021 (the 'Stated Purchase Date') (or earlier
as described below), one Depositary Share evidencing ownership of a
one-twentieth interest in a share of Series F Preferred Stock, at a purchase
price of $25 per Depositary Share (the 'Purchase Price'). Prior to the purchase
of Depositary Shares pursuant to the Purchase Contracts, Holders will not be
shareholders of the Company or have any of the rights and privileges of a
shareholder. Certain rights and obligations of the Company and the Holders under
the Purchase Contracts are subject to termination in certain circumstances. See
'--Termination.' If the Stated Purchase Date is not a Business Day, such Stated
Purchase Date shall be the immediately preceding Business Day. 'Business Day'
means any day that is not a Saturday,
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Sunday or a day on which the NYSE or banking institutions or trust companies in
The City of New York are authorized or obligated by law or executive order to be
closed.
Each Holder will, under the terms of the Unit Agreement, the Units and the
Purchase Contracts, be deemed to have irrevocably (i) agreed to be bound by the
terms of the Purchase Contracts and Pledge Agreement for so long as such Holder
remains a Holder, (ii) appointed the Unit Agent as such Holder's
attorney-in-fact to enter into and perform the Purchase Contracts and Pledge
Agreement on behalf of and in the name of such Holder and (iii) pledged the
Preferred Security or Eligible Collateral, agreed to the terms of the Pledge
Agreement and authorized the Unit Agent to enter into the Pledge Agreement on
each Holder's behalf.
Acceleration of Purchase
The Company may, at its option, in whole (but not in part), on not less
than 45 nor more than 60 days' notice, accelerate the obligation of the Holders
to purchase, and the Company to sell, on the next succeeding Payment Date (such
Payment Date, an 'Early Purchase Date' and, together with the Stated Purchase
Date, a 'Purchase Date'), one Depositary Share per Purchase Contract. Any
acceleration notice may be canceled if the Company gives written notice of such
cancellation to the Unit Agent and the Holders on or before the twentieth day
immediately prior to the applicable Early Purchase Date. In addition, in certain
circumstances, an acceleration may be rescinded. See '--Payment of Purchase
Price; Delivery of Depositary Shares.' If an Early Purchase Date is not a
Business Day, such Early Purchase Date shall be the immediately preceding
Business Day.
The cancellation or rescission of any notice of acceleration will not
prevent the Company from giving notice of an acceleration at a later date.
Contract Fees
The Company is obligated, under the terms of each Purchase Contract, to pay
Contract Fees in respect thereof equal to % per annum of the Stated Amount.
The Contract Fees will be payable quarterly on each Payment Date, commencing
, 1996, to the persons in whose names the related Units or separated
Purchase Contracts are registered at the close of business on the fifteenth day
immediately preceding such Payment Date. Contract Fees payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. If a
Payment Date falls on a day that is not a Business Day, the Contract Fee may be
paid on the next succeeding Business Day, and no additional amounts will accrue
as a result of such delayed payment, except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date. The Contract Fee with respect to any Purchase Contract will cease to be
payable in respect of any period after the Purchase Date (or in the case of a
Put Default (as defined herein) the Delayed Purchase Date (as defined herein))
or, if earlier, in respect of any period after termination of the Purchase
Contract. The failure by the Company to pay the Contract Fees on any Payment
Date will result in the termination of the Purchase Contracts if such failure
shall continue for a period of more than 30 days following such Payment Date
without being remedied.
Payment of Purchase Price; Delivery of Depositary Shares
Under the terms of the Unit Agreement, on the Purchase Date a Unitholder
may pay for the Depositary Share to be issued under the related Purchase
Contract by effecting a Cash Settlement or a Collateral Settlement.
A Unitholder may effect a 'Cash Settlement' of a Purchase Contract by (a)
providing the Unit Agent with notice of its election to effect a Cash Settlement
not less than 10 nor more than 30 days prior to the Purchase Date and (b) making
a payment of the Purchase Price to the Collateral Agent prior to 9:00 a.m., New
York City time, on the Business Day immediately preceding the Purchase Date by
check or wire transfer in immediately available funds payable to or upon the
order of the Company. Upon receipt of notice from a Unitholder electing a Cash
Settlement, the Unit Agent promptly will notify the
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Collateral Agent of such Unitholder's election. The funds received by the
Collateral Agent will be invested promptly in overnight Federal funds and paid
to the Company on the Purchase Date in settlement of the Purchase Contract. Any
funds received by the Collateral Agent in respect of the interest earned from
the investment in overnight Federal funds will be distributed to the Unit Agent
for payment to the Unitholder. If a Unitholder properly effects a Cash
Settlement of a Purchase Contract, the Unit with respect to such Purchase
Contract will be canceled and the related Preferred Security will be released to
the Unit Agent for the benefit of the Unitholder free and clear of any security
interest of the Company.
A Unitholder may effect a 'Collateral Settlement' of a Purchase Contract by
directing the Unit Agent not less than 10 nor more than 30 days prior to the
Purchase Date, on behalf of the Unitholder, to instruct the Collateral Agent to
present the related Preferred Security to the Trust for repayment prior to 10:00
a.m., New York City time, on the Business Day immediately preceding the Purchase
Date at the Stated Amount thereof plus any accrued and unpaid distributions
thereon to the date of repayment (subject to the right of holders of record on
the relevant record date to receive distributions due on a Payment Date) (the
'Repayment Price') and to apply $25 of the proceeds therefrom to the settlement
of the Purchase Contract held by the Unitholder. On such Business Day, the
Property Trustee will, on behalf of the holders of Preferred Securities,
including the Collateral Agent and holders of separated Preferred Securities,
who have delivered such Preferred Securities to the Trust for repayment, present
Subordinated Debt Securities in an aggregate principal amount equal to the
Stated Amount of such Preferred Securities to the Company for immediate
repayment on such Business Day at the Subordinated Debt Repayment Price (as
defined herein). Upon repayment of such Subordinated Debt Securities, (a) the
proceeds therefrom will be applied to repay the Preferred Securities at the
Repayment Price and (b) the Property Trustee will (i) transfer to the Collateral
Agent funds in an aggregate amount equal to the Repayment Price of the Preferred
Securities pledged with the Collateral Agent and (ii) with respect to separated
Preferred Securities, pay immediately the Repayment Price to the holders
thereof. Any funds received by the Collateral Agent in respect of the repayment
of the pledged Preferred Securities will be invested promptly in overnight
Federal funds and paid to the Company on the Purchase Date in settlement of the
related Purchase Contracts. Any funds received by the Collateral Agent (a) in
excess of the aggregate Purchase Price of the Purchase Contracts being settled
thereby or (b) in respect of the interest earned from the investment in
overnight Federal funds will be distributed to the Unit Agent for payment to the
relevant Unitholders. In addition, if the rate of interest per annum paid on
such investment is less than %, the Company shall make a distribution to the
Unit Agent for payment to the relevant Unitholders of an amount per Purchase
Contract equal to one day's interest on the Stated Amount at the rate of % per
annum less the amount of interest actually earned from such investment per
Purchase Contract.
A Unitholder who does not make an effective Cash Settlement or direct the
Unit Agent to deliver an instruction for a Collateral Settlement will be deemed
to have elected a Collateral Settlement, and the Unitholder's Purchase Contract
automatically will be settled accordingly.
A Holder of a separated Purchase Contract will be required under the terms
of the Unit Agreement to pay for the Depositary Share to be issued under the
Purchase Contract from the proceeds of the related Eligible Collateral, which
will be applied automatically by the Collateral Agent to the separated Purchase
Contract on the Purchase Date without receiving any instruction from the Holder
of the separated Purchase Contract. During the 30 days immediately prior to the
Purchase Date, the Collateral Agent will reinvest any maturing Eligible
Collateral in instruments maturing no later than the Business Day immediately
prior to the Purchase Date. On the Business Day immediately prior to the
Purchase Date, the maturing Eligible Collateral will be invested in overnight
Federal funds and paid to the Company on the Purchase Date in settlement of the
related Purchase Contracts. In the event the sum of the proceeds from the
related Eligible Collateral and the interest earned from the investment in
overnight Federal funds is in excess of such aggregate Purchase Price, such
excess amount will be distributed by the Collateral Agent to the Holders of the
related Purchase Contracts on the Purchase Date.
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Upon receiving a payment of the Purchase Price, the Company will be
obligated to issue and deliver the Series F Preferred Stock to the Depositary
(as defined herein), and Depositary Shares will be distributed to the Holders or
their designees.
If any of the Preferred Securities are presented by the Collateral Agent
for repayment in connection with settlement of the related Purchase Contracts on
an Early Purchase Date but are not repaid in accordance with their terms (a 'Put
Default') and such Put Default shall continue for more than two Business Days
(the 'Extension Period'), (a) the Company will not be entitled to accelerate the
obligations of the Holders to any Early Purchase Date, (b) notice of any such
acceleration will be rescinded and annulled automatically, (c) any payments
deposited with the Collateral Agent to effect a Cash Settlement will be returned
to the Unit Agent, for distribution to the relevant Unitholders, and (d) any
proceeds received by the Collateral Agent from the Eligible Collateral will be
reinvested in accordance with the written instructions of the Holders of the
related separated Purchase Contracts or, in the absence of such instructions, to
the extent possible, in the same type or types of Eligible Collateral originally
deposited with the Collateral Agent. If a Put Default shall occur and continue
for more than two Business Days in connection with a settlement of the related
Purchase Contracts on the Stated Purchase Date, the Purchase Contracts will
terminate. See '--Termination.' However, if such Preferred Securities are repaid
at the Repayment Price on any day during the Extension Period, the Company and
the Holders will be obligated to settle the Purchase Contracts on their original
terms on the immediately following Business Day (a 'Delayed Purchase Date').
During the Extension Period and until settlement on the Delayed Purchase Date,
if any, any payments deposited with the Collateral Agent to effect a Cash
Settlement and any proceeds received by the Collateral Agent from the Eligible
Collateral or any repaid Preferred Securities shall be invested in overnight
Federal funds.
After the Purchase Date (or a related Delayed Purchase Date), the right of
the Company to redeem any Subordinated Debt Securities that remain outstanding
after such date will be postponed or suspended until the fifth anniversary of
such date. In addition, if the Purchase Date (or a related Delayed Purchase
Date) is an Early Purchase Date, holders of Preferred Securities that remain
outstanding after such date will have the right to require the Trust to repay
such Preferred Securities on the fifth anniversary of such date. See
'Description of the Preferred Securities--Optional Redemption by the Company'
and '--Repayment at the Option of the Holder' and 'Description of the
Subordinated Debt Securities--Optional Redemption by the Company' and
'--Repayment at the Option of the Holder.'
Termination
Each Purchase Contract and the rights and obligations of the Company and of
the Holders thereunder (including the right and obligation to purchase
Depositary Shares) will terminate (i) upon the optional redemption by the
Company of the Subordinated Debt Securities as described in 'Description of the
Subordinated Debt Securities--Optional Redemption by the Company,' (ii) upon
certain events of bankruptcy, insolvency or reorganization with respect to the
Company, (iii) upon the occurrence of a Put Default that continues for more than
two Business Days in connection with a settlement of the related Purchase
Contracts at the Stated Purchase Date, (iv) upon default in the payment of any
Contract Fee when it becomes due and payable and continuance of such default for
more than 30 days or (v) upon the occurrence of a Liquidation Distribution (as
defined herein) in connection with a liquidation of the Trust. See 'Description
of the Preferred Securities--Liquidation Distribution Upon Dissolution.' Upon
termination of the Purchase Contracts, the Collateral Agent will release the
Collateral held by it from the security interest of the Company for distribution
to the Holders. Any such termination will be without liability to the Holders or
the Company.
Except as described above, the obligation of a Holder under a Purchase
Contract to purchase a Depositary Share will not be terminated or otherwise
affected by the occurrence and continuance of an Event of Default with respect
to the Subordinated Debt Securities or a Declaration Event of Default with
respect to the Preferred Securities. In addition, the Company will not be
entitled to accelerate the obligation of a Holder under a Purchase Contract if,
in certain circumstances, the Preferred Securities
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are not repaid at an Early Purchase Date. See '--Payment of Purchase Price;
Delivery of Depositary Shares.'
Contract Fees with respect to any terminated Purchase Contracts will cease
to accrue in respect of any period from and after the date of termination. The
Company's obligations to pay any accrued Contract Fees will be deemed fulfilled
if the Company deposits with the Unit Agent funds necessary to pay such accrued
Contract Fees, in trust with irrevocable instructions and authorization that
such funds be delivered to the Holders of the Purchase Contracts.
VOTING RIGHTS OF UNITHOLDERS WITH RESPECT TO PREFERRED SECURITIES
Under the terms of the Pledge Agreement, the Unit Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Preferred
Securities pledged with the Collateral Agent. As soon as practicable after
receipt of notice from the Collateral Agent of any meeting at which holders of
the Preferred Securities which are part of the Units are entitled to vote or of
notice of any solicitation of consents or request for waiver or other action by
holders of the Preferred Securities which are part of the Units, the Unit Agent
promptly will convey such notice or request to the Unitholders as of the record
date for such meeting, consent, waiver or other action. Each such Unitholder
will be entitled, subject to any applicable restrictions, to instruct the Unit
Agent to vote the amount of Preferred Securities related to such Units. The Unit
Agent will endeavor, insofar as practicable, to vote the amount of the related
Preferred Securities in accordance with the instructions of the Unitholders as
conveyed to the Unit Agent, and the Company and the Trust will agree to take all
action which may be deemed necessary by the Unit Agent in order to enable the
Unit Agent to do so. The Unit Agent will abstain from voting shares of the
Preferred Securities which are part of the Units to the extent it does not
receive specific instructions from the Holders of the related Units.
SEPARATION OF PREFERRED SECURITY FROM THE RELATED PURCHASE CONTRACT
A Unitholder may separate Preferred Securities from the related Purchase
Contracts at any time on or prior to the 32nd day immediately preceding the
Purchase Date by (a) depositing with the Collateral Agent (i) cash and/or (ii)
U.S. Treasury Securities with a maturity of 30 days or less at the time of
determination ('Eligible Collateral') having an aggregate principal amount equal
to the Stated Amount of the Preferred Securities and (b) transferring the
related Units to the Unit Agent accompanied by a notice to the Unit Agent
stating that the Unitholder has transferred Eligible Collateral to the
Collateral Agent and requesting that the Unit Agent instruct the Collateral
Agent to release the Preferred Securities related to such Units. Upon such
deposit and receipt of an instruction from the Unit Agent, the Collateral Agent
will effect the release of the Preferred Securities from the pledge of the
Pledge Agreement free and clear of the Company's security interest therein to
the Unit Agent, which will (i) cancel the related Units, (ii) transfer the
Preferred Securities to the former Unitholder and (iii) deliver certificates in
definitive form to the former Unitholder evidencing its separated Purchase
Contracts.
Separated Purchase Contracts secured by Eligible Collateral will be
nontransferable without the prior written consent of the Company and the
certificates representing such Purchase Contracts will be in definitive form
only and bear a legend in substantially the following form:
THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THE PURCHASE
CONTRACTS EVIDENCED BY THIS CERTIFICATE, OR ANY INTEREST IN SUCH PURCHASE
CONTRACTS, IS RESTRICTED BY THE TERMS OF THE UNIT AGREEMENT DATED
, 1996, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE AGENT. NO SUCH SALE, ASSIGNMENT, TRANSFER OR OTHER
DISPOSITION SHALL BE EFFECTIVE WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
A Holder of separated Purchase Contracts may at any time on or prior to the
32nd day immediately preceding the Purchase Date reestablish transferable Units
consisting of Purchase Contracts and Preferred Securities by (a) transferring
Preferred Securities to the Collateral Agent with an instruction
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that the Collateral Agent (i) release Eligible Collateral having a corresponding
aggregate principal amount and (ii) notify the Unit Agent of the receipt of the
Preferred Securities and (b) delivering the certificates evidencing the
separated Purchase Contracts to the Unit Agent. The Unit Agent will effect the
reestablishment of the transferable Units by depositing the relevant number of
Units into DTC for the credit of such Holder (or its designee).
Holders who elect to separate the Preferred Security from the related
Purchase Contract shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent for the Eligible
Collateral and the Company shall not be responsible for any such fees or
expenses.
Unless and until a significant number of underlying Preferred Securities
are separated from the Units, there will be no market for the Preferred
Securities. Even if a significant number of Preferred Securities are so
separated, there can be no assurance that an active trading market will develop
or be sustained. The Preferred Securities will not be listed on any securities
exchange. Holders should carefully consider the likely illiquidity of the
Preferred Securities prior to making any election to separate.
Except as described above, a Preferred Security that secures a Purchase
Contract is not separable therefrom and both components may be transferred only
as a whole in the form of Units. Unitholders may separate Preferred Securities,
and Holders of separated Purchase Contracts may reestablish Units, only in
integral multiples of 400 Units.
REINVESTMENT OF ELIGIBLE COLLATERAL
The Collateral Agent will reinvest the full amount of the proceeds of any
maturing Eligible Collateral pledged by a Holder of the related Purchase
Contracts in Eligible Collateral maturing on or before the Purchase Date in
accordance with the specific instructions furnished in writing to the Collateral
Agent by the Holder at least one Business Day in advance or, in the absence of
any instructions, in the same type or types of Eligible Collateral originally
deposited with the Collateral Agent, until the settlement or termination of such
Purchase Contracts or the reestablishment of Units consisting of such Purchase
Contracts and Preferred Securities.
If at any time the aggregate principal amount at maturity of the Eligible
Collateral pledged by a Holder exceeds the product of the Stated Amount and the
number of related Purchase Contracts, the Holder may request the Collateral
Agent to release such excess amount to the Holder free and clear of the
Company's security interest therein, and the Collateral Agent will effect such
release.
Holders of separated Purchase Contracts will be responsible for any
brokerage or other fees or expenses relating to the reinvestment or release of
the related Eligible Collateral.
DISTRIBUTIONS ON COLLATERAL
Upon receipt of cash distributions on the pledged Preferred Securities, the
Collateral Agent will distribute the payments to the Unit Agent who will in turn
distribute those payments to the persons in whose names the related Units are
registered at the close of business on the Business Day immediately preceding
the date of such distribution. Upon receipt of any interest or other cash
distributions on the Eligible Collateral (other than the proceeds of any
maturing Eligible Collateral), the Collateral Agent will distribute the payments
directly to the Holders of the related Purchase Contracts.
PLEDGE AGREEMENT
The Collateral will be pledged to the Collateral Agent, for the benefit of
the Company, pursuant to a pledge agreement, to be dated as of ,
1996 (the 'Pledge Agreement'), to secure the obligations of the Holders to
purchase Depositary Shares under the Purchase Contracts. The rights of the
Holders to the Collateral will be subject to the Company's security interest
therein created by the Pledge Agreement. No Collateral will be released by the
Collateral Agent from the pledge arrangement except upon (i) the termination of
the related Purchase Contracts, (ii) the effective Cash Settlement of
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the related Purchase Contracts, (iii) the deposit of Eligible Collateral by a
Unitholder to separate a Preferred Security from the related Purchase Contract
or (iv) the repledge of a Preferred Security by a Holder of a separated Purchase
Contract to reestablish a transferable Unit. See '--Description of the Purchase
Contracts--Payment of Purchase Price; Delivery of Depositary Shares,'
'--Termination' and '--Separation of Preferred Security from the Related
Purchase Contract.' Subject to such security interest and the terms of the Unit
Agreement and the Pledge Agreement, each Unitholder will be entitled through the
Unit Agent and the Collateral Agent to all the proportional rights and
preferences of a Preferred Security (including distribution, voting, redemption,
repayment and liquidation rights) and each Holder of a separated Purchase
Contract will retain beneficial ownership of the Eligible Collateral pledged in
respect of such Purchase Contracts (including the right to receive any
distributions paid on such Eligible Collateral). See '--Voting Rights of
Unitholders with Respect to Preferred Securities' and '--Distributions on
Collateral.' The Company will have no interest in the Collateral other than its
security interest.
OTHER PLEDGE AND PAYMENT PROVISIONS
In the event Subordinated Debt Securities are received by the Collateral
Agent in respect of Preferred Securities held as Collateral upon the occurrence
of a Tax Event, Investment Company Event, Optional Distribution (as defined
herein) or liquidation of the Trust, the Subordinated Debt Securities will be
held by the Collateral Agent to secure the obligations to purchase Depositary
Shares under the related Purchase Contracts. Thereafter the Collateral Agent
will have such rights and obligations with respect to the Subordinated Debt
Securities that it had in respect of Preferred Securities. Among other things,
the Collateral Agent will be obligated with respect to the Subordinated Debt
Securities to present the Subordinated Debt Securities for repayment in
connection with a Collateral Settlement, to receive and distribute interest
payments to the Unit Agent for distribution to the Unitholders and to release
the Subordinated Debt Securities upon delivery of Eligible Collateral, in each
case, to the same extent as would have been required with respect to Preferred
Securities. In the event of the optional redemption of the Subordinated Debt
Securities by the Company as described in 'Description of the Subordinated Debt
Securities--Optional Redemption by the Company' or upon the occurrence of a
Liquidation Distribution in connection with a liquidation of the Trust, any cash
or other property received by the Collateral Agent in respect of Preferred
Securities held as Collateral will be distributed to the Unit Agent for
distribution to the Unitholders, any Eligible Collateral held by it will be
released to the Holders of separated Purchase Contracts and the Purchase
Contracts will be terminated. See '--Description of the Purchase
Contracts--Termination.'
CERTAIN PROVISIONS OF THE UNIT AGREEMENT AND THE PLEDGE AGREEMENT
Payment in Respect of Units and Separated Purchase Contracts; Delivery of
Depositary Shares or Preferred Securities
Payments on the Units in respect of distributions on the Preferred
Securities and Contract Fees will be made to DTC, which shall credit the
relevant accounts at DTC on the applicable Payment Dates. Payments on any
separated Purchase Contracts in respect of Contract Fees will be payable at the
office of the Unit Agent in the Borough of Manhattan, The City of New York, or,
at the option of the Company, by check mailed to the address of the person
entitled thereto as shown on the register for the related separated Purchase
Contracts.
Depositary Shares will be delivered, or, if the Purchase Contract is
terminated, or a Unitholder elects to settle the Purchase Contract by making a
cash payment to the Collateral Agent, the related Preferred Securities will be
distributed in each case at the offices of the Unit Agent.
The Unit Agent will have no obligation to invest or to pay interest on any
amounts held by the Unit Agent pending distribution, except as described above.
No service charge will be made to the Unitholder for any registration of
transfer or exchange of the Units, except for any tax or other governmental
charge incidental thereto.
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Modification
The Unit Agreement and the Pledge Agreement will contain provisions
permitting the Company and the Unit Agent or Collateral Agent, as the case may
be, with the consent of the Holders of not less than 66-2/3% of the combined
number of the Units and separated Purchase Contracts at the time outstanding, to
modify the terms of the Units, the Purchase Contracts, the Unit Agreement and
the Pledge Agreement, except that no such modification may, without the consent
of the Holder of each outstanding Unit or separated Purchase Contract affected
thereby, (a) change any Payment Dates, (b) increase the amount or decrease the
types of Collateral required to be pledged to secure a Holder's obligations
under the Purchase Contracts, impair the right of the Holder of any Purchase
Contract to receive distributions on the related Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral, (c) change the
place or currency of payment or reduce any Contract Fees, (d) impair the right
to institute suit for the enforcement of any Purchase Contract, (e) reduce the
amount of Depositary Shares purchasable under any Purchase Contract, increase
the price to purchase Depositary Shares on settlement of Purchase Contracts or
change the Stated Purchase Date, (f) reduce the above-stated percentage of
outstanding Units and separated Purchase Contracts, the consent of whose Holders
is required for the modification or amendment of the provisions of the Units,
the Purchase Contracts, the Unit Agreement or the Pledge Agreement, (g)
materially and adversely alter the rights of the holders of Preferred Securities
or (h) cause the Trust for United States Federal income tax purposes to be
classified as other than a grantor trust.
Merger, Consolidation and Sales of Assets
The Company will covenant in the Unit Agreement that it will not merge or
consolidate with any other entity or sell, transfer or lease all or
substantially all of its assets to another corporation unless the Company is the
continuing corporation or the successor entity is a corporation organized under
the laws of the United States of America or a state thereof ('Successor
Corporation') and such Successor Corporation expressly assumes the obligations
of the Company under the Purchase Contracts, the Unit Agreement and the Pledge
Agreement, the Company or such Successor Corporation is not, immediately after
such merger, consolidation, sale, transfer or lease, in default in the
performance of any of its obligations thereunder and such merger, consolidation,
sale, transfer or lease will not cause the Trust for United States Federal
income tax purposes to be classified as other than a grantor trust. Under the
terms of the Unit Agreement, in the case of any such consolidation, merger,
sale, transfer or lease, unless the Purchase Contracts have been terminated (see
'Description of the Purchase Contracts--Termination'), each Holder of Units or
separated Purchase Contracts then outstanding will have the right and the
obligation to purchase on the Purchase Date, either directly or through the
purchase of depositary shares, the same number of shares of preferred stock of
the Successor Corporation, with substantially the same preferences, rights and
powers as the Series F Preferred Stock, as such Holder would have purchased if a
Purchase Date with respect to such Purchase Contracts had occurred immediately
prior to such consolidation, merger, sale, transfer or lease. If, however, the
Successor Corporation does not have publicly held equity securities outstanding
but is a direct or indirect subsidiary of a corporation that does, then, at the
election of the Successor Corporation, the preferred stock may be preferred
stock of any such publicly held parent.
Title
The Company, the Unit Agent and the Collateral Agent may treat the
registered owner of any Unit or separated Purchase Contract as the absolute
owner thereof for the purpose of making payment and settling the Purchase
Contracts and for all other purposes.
Governing Law
The Unit Agreement, the Pledge Agreement, the Units and the Purchase
Contracts will be governed by, and construed in accordance with, the laws of the
State of New York.
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Information Concerning the Unit Agent
Chemical Bank, a New York banking corporation, will be the Unit Agent. The
Unit Agent will act as the agent for the holders of Units and separated Purchase
Contracts from time to time. The Unit Agreement will not obligate the Unit Agent
to exercise any discretionary actions in connection with a default under the
terms of the Units, the Unit Agreement or the Preferred Securities. The Unit
Agent also serves as the Property Trustee and the Guarantee Trustee.
The Unit Agreement will contain provisions limiting the liability of the
Unit Agent. The Unit Agreement will contain provisions under which the Unit
Agent may resign or be replaced. Such resignation or replacement would be
effective upon appointment of a successor.
Information Concerning the Collateral Agent
The Bank of New York will be the Collateral Agent. The Collateral Agent
will act solely as the agent of the Company and will not assume any obligation
or relationship of agency or trust for or with any of the Holders except for the
obligations owed by a pledgee of property to the owner thereof under the Pledge
Agreement and applicable law.
The Pledge Agreement will contain provisions limiting the liability of the
Collateral Agent. The Pledge Agreement will contain provisions under which the
Collateral Agent may resign or be replaced. Such resignation or replacement
would be effective upon the appointment of a successor.
Miscellaneous
The Unit Agreement will provide that the Company will pay all fees and
expenses related to (i) the offering of the Units, (ii) the retention of the
Collateral Agent and (iii) the enforcement by the Unit Agent of the rights of
the Unitholders; provided, however, that holders who elect to separate the
Preferred Security from the related Purchase Contract shall be responsible for
any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent for the Eligible Collateral, and the Company shall not be
responsible for any such fees or expenses. See '--Separation of Preferred
Security from the Related Purchase Contract.'
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Units by tender, in the
open market or by private agreement.
BOOK-ENTRY SYSTEM
DTC will act as securities depositary for Units. Those Units deposited with
DTC (the 'Global Units') will be represented by one or more certificates issued
only as fully registered securities registered in the name of Cede & Co. (DTC's
nominee).
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the Global Units as
represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a 'banking organization' within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a 'clearing corporation' within the
meaning of the New York Uniform Commercial Code, and a 'clearing agency'
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ('Participants') deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its Participants
and by the NYSE, the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. (the 'NASD'). Access to the DTC system is also
available to others, such as securities brokers and dealers, banks and trust
companies that clear transactions
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through or maintain a direct or indirect custodial relationship with a
Participant, either directly or indirectly ('Indirect Participants'). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Global Units within the DTC system must be made by or through
Participants, which will receive a credit for Global Units on DTC's records. The
ownership interest of each actual purchaser of Global Units (the 'Beneficial
Owner') is in turn to be recorded on the Participants' and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Participants or Indirect Participants
through which the Beneficial Owners purchased Global Units. Transfers of
ownership interests in the Global Units are to be accomplished by entries made
on the books of Participants and Indirect Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Global Units, except in the event that use of the
book-entry system for Global Units is discontinued.
To facilitate subsequent transfers, all Global Units deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Global Units with DTC and their registration in the name of Cede
& Co. effect no change in beneficial interest. DTC has no knowledge of the
actual Beneficial Owners of the Global Units; DTC's records reflect only the
identity of the Participants to whose accounts such Global Units are credited,
which may or may not be the Beneficial Owners. The Participants and Indirect
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
So long as DTC or its nominee is the registered owner or holder of a Global
Unit, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Units represented thereby for all purposes under the Unit
Agreement and the Units. No beneficial owner of an interest in a Global Unit
will be able to transfer that interest except in accordance with DTC's
applicable procedures, in addition to those provided for under the Unit
Agreement.
Transfers between Participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. If a holder
requires physical delivery of a Unit in a definitive form, for any reason,
including to sell Units to persons in states which require such delivery of such
Units or to pledge such Units, such holder must transfer its interest in the
Global Unit in accordance with the normal procedures of DTC and the procedures
set forth in the Unit Agreement.
DTC has advised the Unit Agent that it will take any action permitted to be
taken by a Unitholder only at the direction of one or more Participants to whose
account the DTC interests in the Global Units are certified and only in respect
of such portion of the aggregate number of Units as to which such Participant or
Participants has or have given such direction. However, if there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, DTC will exchange the Global
Units for Units in definitive form, which it will distribute to its
Participants.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time.
Although voting with respect to the Global Units is limited, in those cases
where a vote is required, neither DTC nor Cede & Co. will itself consent or vote
with respect to Global Units. Under its usual procedures, DTC would mail an
Omnibus Proxy to the Unit Agent as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Participants to whose accounts the Global Units are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments on the Global Units held in book-entry form in respect of
distributions on Preferred Securities and Contract Fees will be made to DTC in
immediately available funds. DTC's practice is to
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credit Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers in bearer form or registered in 'street name,'
and such payments will be the responsibility of such Participants and Indirect
Participants and not of DTC or the Unit Agent, subject to any statutory or
regulatory requirements to the contrary that may be in effect from time to time.
Payments of Contract Fees and distributions on Preferred Securities to DTC are
the responsibility of the Unit Agent; disbursement of such payments to
Participants is the responsibility of DTC; and disbursement of such payments to
the Beneficial Owners is the responsibility of Participants and Indirect
Participants.
Except as provided herein, a Beneficial Owner in a global certificate
representing the Global Units will not be entitled to receive physical delivery
of Global Units. Accordingly, each Beneficial Owner must rely on the procedures
of DTC to exercise any rights under the Global Units.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interest in the Global Units among Participants of DTC, DTC is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company, the Trust nor
the Unit Agent will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depositary with
respect to the Global Units at any time by giving reasonable notice to the
Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Global Units certificates are required to be printed
and delivered. Additionally, the Company may decide to discontinue use of the
system of book-entry transfers through DTC (or any successor depositary) with
respect to the Global Units. In that event, certificates for Global Units will
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
LISTING
The Units have been approved for listing on the NYSE under the symbol 'SB
PrG', subject to official notice of issuance.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, Chemical Bank, will act as the indenture
trustee for purposes of compliance with the provisions of the Trust Indenture
Act. The terms of the Preferred Securities will include those stated in the
Declaration and those made part of the Declaration by the Trust Indenture Act.
The following summary of the principal terms and provisions of the Preferred
Securities does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Declaration, the Trust Act and the Trust
Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned, directly or
indirectly, by the Company. The Common Securities rank pari passu, and payments
will be made thereon on a pro rata basis, with the Preferred Securities, except
that upon the occurrence of a Declaration Event of Default, the rights of the
holders of the Common Securities to receive payment of periodic distributions
and payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Preferred Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities or the incurrence of any indebtedness by the Trust. Pursuant to the
Declaration, the Property Trustee will own
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the Subordinated Debt Securities purchased by the Trust for the benefit of the
holders of the Trust Securities. The payment of distributions out of money held
by the Trust, and payments upon redemption or repayment of the Preferred
Securities or liquidation of the Trust, are guaranteed by the Company to the
extent described under 'Description of the Guarantee.' The Guarantee will be
held by Chemical Bank, the Guarantee Trustee, for the benefit of the holders of
the Preferred Securities. The Guarantee does not cover payment of distributions
when the Trust does not have sufficient available funds to pay such
distributions. In such event, the remedy of a holder of Preferred Securities is
to vote to direct the Property Trustee to enforce the Property Trustee's rights
under the Subordinated Debt Securities except in the limited circumstances in
which the holder may take Direct Action (as defined herein). See 'Description of
the Preferred Securities--Voting Rights' and '--Declaration Events of Default.'
The procedures whereby Unitholders may exercise voting rights under the
Declaration are described under '--Book-Entry Only Issuance' and 'Description of
the Units--Voting Rights of Unitholders with Respect to Preferred Securities.'
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the Stated Amount of $25 per Preferred Security. Distributions in
arrears for more than one quarter will bear interest thereon at the rate per
annum of % thereof compounded quarterly. The term 'distribution' as used
herein includes any such interest payable unless otherwise stated. The amount of
distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1996, and will be payable quarterly in arrears on each Payment
Date commencing , 1996, when, as and if available for payment.
Distributions will be made by the Property Trustee, except as otherwise
described below.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from the Company on the Subordinated Debt Securities. See
'Description of the Subordinated Debt Securities.' The payment of distributions
out of moneys held by the Trust is guaranteed by the Company to the extent set
forth under 'Description of the Guarantees.'
Distributions payable on any Payment Date on the Preferred Securities will
be payable to the holders thereof as they appear on the books and records of the
Trust at the close of business on the fifteenth day immediately preceding such
Payment Date. Such distributions will be paid through the Property Trustee who
will hold amounts received in respect of the Subordinated Debt Securities in the
Property Account for the benefit of the holders of the Trust Securities. In the
event that any date on which distributions are to be made on the Preferred
Securities is not a Business Day, then payment of the distributions payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such Payment Date.
REPAYMENT AT THE OPTION OF THE HOLDER
Each holder of Preferred Securities, including the Collateral Agent, will
have the right to require the Trust to repay all or a portion of the Preferred
Securities owned or pledged with such holder (the 'Put Option') on the Business
Day immediately preceding the settlement date for the Purchase Contracts (the
'Initial Put Option Exercise Date') at the Repayment Price and will be paid by
the Trust in immediately available funds, subject to certain conditions. In
addition, holders of Preferred Securities that remain outstanding after an
accelerated settlement date for the Purchase Contracts will have a Put Option
with respect to the Preferred Securities owned by such holder on the fifth
anniversary of such date (the 'Fifth Anniversary Put Option Exercise Date' and,
together with the Initial Put Option Exercise
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Date, the 'Put Option Exercise Date') at the Repayment Price. See 'Description
of the Units-- Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
The Trust will obtain the funds to repay the Preferred Securities under the
Put Option by presenting to the Company, pursuant to the Trust's optional right
to repayment under the Subordinated Debt Securities, Subordinated Debt
Securities in an aggregate principal amount equal to the Stated Amount of such
Preferred Securities. See 'Description of the Subordinated Debt
Securities--Repayment at the Option of the Holder.'
In order for the Preferred Securities to be repaid on the Put Option
Exercise Date, the Trust must receive at the office or agency of the Property
Trustee maintained for that purpose in the Borough of Manhattan, The City of New
York, either (i) not less than 10 nor more than 30 days prior to the Initial Put
Option Exercise Date or (ii) not less than 30 nor more than 60 days prior to the
Fifth Anniversary Put Option Exercise Date, the Preferred Securities to be
repaid with the form entitled 'Option to Elect Repayment' on the reverse thereof
or otherwise accompanying such Preferred Security duly completed. Any such
notice received by the Trust will be irrevocable. All questions as to the
validity, eligibility (including time of receipt) and acceptance of the
Preferred Securities for repayment will be determined by the Trust, whose
determination will be final and binding. Notwithstanding the foregoing, so long
as the holder of the Preferred Securities presented for repayment is the
Collateral Agent, such Preferred Securities may be received at such office or
agency of the Property Trustee at any time prior to 10:00 a.m., New York City
time, on the Put Option Exercise Date and in the form and manner as may be
designated by the Collateral Agent.
The Trust will comply with the provisions of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act if required and will file
Schedule 13E-4 or any other schedule if required thereunder.
Payment of the Repayment Price to holders of Preferred Securities will be
made through the Property Trustee, provided that the Company has paid the
Property Trustee a sufficient amount of cash in connection with the related
repayment of the Subordinated Debt Securities. Notwithstanding the foregoing, so
long as the holder of any Preferred Securities presented for repayment is the
Collateral Agent, the payment of the Repayment Price in respect of such
Preferred Securities will be made no later than 1:00 p.m., New York City time,
on the Put Option Exercise Date by check or wire transfer in immediately
available funds at such place and to such account as may be designated by the
Collateral Agent. If the Property Trustee holds immediately available funds
sufficient to pay the Repayment Price of the Preferred Securities presented for
repayment, then, immediately prior to the close of business on the Put Option
Exercise Date, such Preferred Securities will cease to be outstanding and
distributions thereon will cease to accrue, whether or not Preferred Securities
are delivered to the Property Trustee, and all other rights of the holder in
respect of the Preferred Securities will terminate and lapse (other than the
right to receive the Repayment Price, but without interest on such Repayment
Price). Neither the Regular Trustees nor the Trust will be required to register
or cause to be registered the transfer of any Preferred Securities for which
repayment has been elected. Except as described in the immediately following
paragraph, if payment of the Repayment Price in respect of Preferred Securities
is (i) improperly withheld or refused and not paid either by the Property
Trustee or by the Company as guarantor pursuant to the Preferred Securities
Guarantee, or (ii) not paid by the Property Trustee as the result of an Event of
Default with respect to the Subordinated Debt Securities presented for repayment
as described, distributions on such Preferred Securities will continue to
accrue, from the original Put Option Exercise Date to the actual date of
payment, in which case the actual payment date will be considered the Put Option
Exercise Date for purposes of calculating the Repayment Price.
If any of the Preferred Securities presented by the Collateral Agent for
repayment in connection with an accelerated settlement date are not repaid and
the failure to repay continues for more than two Business Days, then (a) any
exercise of the optional right to elect repayment of the Preferred Securities
will be deemed rescinded and annulled automatically, (b) any presentation of the
related Subordinated Debt Securities to the Company for repayment will be deemed
rescinded and annulled automatically and (c) any payments received by the
Property Trustee from the repayment of such Subordinated Debt
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Securities will be returned to the Company. See 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
The rescission or annulment of any exercise of the optional right to elect
repayment of the Preferred Securities will not prevent holders of Preferred
Securities from exercising such right at a later date.
OPTIONAL REDEMPTION BY THE COMPANY
The Company is permitted to redeem the Subordinated Debt Securities, in
whole (but not in part), after , 2001 upon not less than 30 nor
more than 60 days' notice on any Payment Date. See 'Description of the
Subordinated Debt Securities--Optional Redemption by the Company.'
Notwithstanding the foregoing, after a settlement of the Purchase Contracts on
the Purchase Date (or a related Delayed Purchase Date), the right of the Company
to redeem any Subordinated Debt Securities that remain outstanding after such
date will be postponed or suspended until the fifth anniversary of such date.
See 'Description of the Units--Description of the Purchase
Contracts--Acceleration of Purchase.' Upon the redemption of the Subordinated
Debt Securities in the manner described in this paragraph, the Trust will, to
the extent of the proceeds of such redemption, redeem Preferred Securities and
Common Securities at the Redemption Price.
MANDATORY REDEMPTION
The Subordinated Debt Securities will mature on , 2026. Upon
the repayment of the Subordinated Debt Securities, whether at maturity or upon
redemption, the proceeds from such repayment or redemption shall simultaneously
be applied to redeem Trust Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Subordinated Debt Securities so
repaid or redeemed at the Redemption Price.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION; OPTIONAL
DISTRIBUTION
If, at any time, a Tax Event shall occur and be continuing, the Trust
shall, except in the limited circumstances described below, be dissolved with
the result that Subordinated Debt Securities with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Trust Securities, would be distributed
to the holders of the Trust Securities in liquidation of such holders' interests
in the Trust on a pro rata basis within 90 days following the occurrence of such
Tax Event; provided that such dissolution and distribution shall be conditioned
on (i) the Regular Trustees' receipt of an opinion of nationally recognized
independent tax counsel experienced in such matters (a 'No Recognition
Opinion'), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Trust Securities will not
recognize any gain or loss for United States Federal income tax purposes as a
result of such dissolution and distribution of Subordinated Debt Securities and
(ii) the Company being unable to avoid such Tax Event within such 90 day period
by taking some ministerial action or pursuing some other reasonable measure that
will have no adverse effect on the Trust, the Company or the holders of the
Trust Securities. Furthermore, if (i) the Company has received an opinion (a
'Redemption Tax Opinion') of nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Subordinated Debt Securities for United States Federal income
tax purposes, even after the Subordinated Debt Securities were distributed to
the holders of Trust Securities in liquidation of such holders' interests in the
Trust as described above, or (ii) the Regular Trustees shall have been informed
by such tax counsel that it cannot deliver a No Recognition Opinion to the
Trust, the Company shall have the right, upon not less than 30 nor more than 60
days' notice, to redeem the Subordinated Debt Securities in whole (but not in
part) for cash at the Subordinated Debt Redemption Price within 90 days
following the occurrence of such Tax Event, and, following such redemption,
Trust Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Subordinated Debt Securities so redeemed shall be
redeemed by the Trust (a 'Tax Event Redemption') at the Redemption Price;
provided, however, that, if at the time there is available to the
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Company or the Trust the opportunity to eliminate, within such 90 day period,
the Tax Event by taking some ministerial action, such as filing a form or making
an election or pursuing some other similar reasonable measure that has no
adverse effect on the Trust, the Company or the holders of the Trust Securities,
the Company or the Trust will pursue such measure in lieu of redemption. See
'Mandatory Redemption.'
'Tax Event' means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a 'Dissolution Tax Opinion') to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust is or will be subject to United States
Federal income tax with respect to interest accrued or received on the
Subordinated Debt Securities, (ii) interest payable to the Trust on the
Subordinated Debt Securities is or will not be deductible by the Company in
whole or in part for United States Federal income tax purposes or (iii) the
Trust is or will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges, which change or amendment becomes
effective on or after the date of this Prospectus.
If an Investment Company Event shall occur and be continuing, the Company
shall cause the Regular Trustees to liquidate the Trust and cause the
Subordinated Debt Securities to be distributed to the holders of the Preferred
Securities in liquidation of the Trust within 90 days following the occurrence
of such Investment Company Event.
'Investment Company Event' means that the Regular Trustees shall have
obtained an opinion from independent counsel experienced in practice under the
Investment Company Act of 1940, as amended (the '1940 Act'), to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a 'Change in 1940 Act
Law'), there is more than an insubstantial risk that the Trust is or will be
considered an investment company which is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the
original issue date of the Trust Securities.
The Trust may be dissolved at any time at the option of the Company with
the result that Subordinated Debt Securities with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Trust Securities, would be distributed
as soon as practicable to the holders of the Trust Securities in liquidation of
such holders' interests in the Trust on a pro rata basis (an 'Optional
Distribution').
The distribution by the Company of the Subordinated Debt Securities will
effectively result in the cancellation of the Preferred Securities.
After the date for any distribution of Subordinated Debt Securities upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding and (ii) DTC or its nominee, as the record holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Subordinated Debt Securities to be delivered upon
such distribution.
REDEMPTION PROCEDURES--OPTIONAL REDEMPTION BY THE COMPANY; MANDATORY REDEMPTION;
TAX EVENT REDEMPTION
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives notice of a redemption in respect of Preferred
Securities (which notice shall be irrevocable), and if the Company has paid to
the Property Trustee a sufficient amount of cash in
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connection with the related redemption or maturity of the Subordinated Debt
Securities as described under '--Optional Redemption by the Company,'
'--Mandatory Redemption' or '--Tax Event or Investment Company Event Redemption
or Distribution; Optional Distribution' above, then the Property Trustee will
irrevocably deposit with DTC funds sufficient to pay the applicable Redemption
Price to the holders of the Preferred Securities. If notice of such redemption
shall have been given and funds deposited as required, then immediately prior to
the close of business on the date of such deposit, the Preferred Securities will
cease to be outstanding and distributions thereon will cease to accrue, and all
other rights of the holder in respect of the Preferred Securities shall
terminate and lapse (other than the right to receive the Redemption Price, but
without interest on such Redemption Price. In the event that any date fixed for
such redemption of Preferred Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price for the redemption of the
Preferred Securities is improperly withheld or refused and not paid either by
the Trust or by the Company pursuant to the Guarantee, distributions on such
Preferred Securities will continue to accrue at the then applicable rate from
the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
The Trust will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust, the holders of the Preferred Securities
will be entitled to receive out of the assets of the Trust, after satisfaction
of liabilities to creditors, distributions in an amount equal to the aggregate
of the Stated Amount per Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (the 'Liquidation Distribution'),
unless, in connection with such termination, Subordinated Debt Securities in an
aggregate stated principal amount equal to the aggregate Stated Amount of, with
an interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Preferred Securities
have been distributed on a pro rata basis to the holders of the Preferred
Securities. If such Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Preferred Securities shall be paid on a pro rata basis, provided that such
amounts may be paid in any combination of cash, Subordinated Debt Securities or
other property held by the Trust. The holders of the Common Securities will be
entitled to receive distributions upon any such dissolution pro rata with the
holders of the Preferred Securities, except that if a Declaration Event of
Default has occurred and is continuing, the Preferred Securities shall have a
preference over the Common Securities with regard to such distributions.
Pursuant to the Declaration, the Trust will terminate on ,
2031, or earlier upon (i) the bankruptcy of the Company, (ii) the filing of a
certificate of dissolution or its equivalent with respect to the Company (except
for permitted mergers, consolidations or reorganizations of the Company), the
filing of a certificate of cancellation with respect to the Trust, or the
revocation of the charter of the Company and expiration of 90 days after the
date of revocation without a reinstatement thereof, (iii) the entry of a decree
of judicial dissolution of the Company or the Trust, (iv) the occurrence of a
Tax Event or Investment Company Event followed by the distribution of the
Subordinated Debt Securities, (v) the occurrence of an Optional Distribution or
(vi) the redemption or repayment of all the Trust Securities.
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DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an 'Event of Default') constitutes
an event of default under the Declaration with respect to the Trust Securities
(a 'Declaration Event of Default'), provided that, pursuant to the Declaration,
the holder of the Common Securities will be deemed to have waived any
Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
If the Property Trustee fails to enforce its rights under the Subordinated Debt
Securities after a recordholder of Preferred Securities has made a written
request, such holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Property Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest or
principal on the Subordinated Debt Securities on the date such interest or
principal is otherwise payable (or in the case of a redemption or repayment, the
redemption date or repayment date, respectively), then a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder directly of the principal of or interest on the Subordinated Debt
Securities having a principal amount equal to the aggregate Stated Amount of the
Preferred Securities of such holder (a 'Direct Action') on or after the
respective due date specified in the Subordinated Debt Securities. In connection
with such Direct Action, the Company will be subrogated to the rights of such
holder of Preferred Securities under the Declaration to the extent of any
payment made by the Company to such holder of Preferred Securities in such
Direct Action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated Debt
Securities.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Subordinated Debt Securities will have the right under
the Indenture to declare the principal of and interest on the Subordinated Debt
Securities to be immediately due and payable. The Company and the Trust are each
required to file annually with the Property Trustee an officer's certificate as
to its compliance with all conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act
and 'Description of the Guarantee--Amendments and Assignment,' and as otherwise
required by law and the Declaration, the holders of the Preferred Securities
will have no voting rights.
The holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration including the right to direct the Property Trustee, as holder of the
Subordinated Debt Securities, to (i) exercise the remedies available under the
Indenture with respect to the Subordinated Debt Securities, (ii) waive any past
Event of Default that is waivable under the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Subordinated Debt Securities
requiring the consent of the holders of the Subordinated Debt Securities;
provided, however, that, where a consent or action under the Indenture would
require the consent or act of more than a majority of the holders (a
'Super-Majority') affected thereby, only the holders of at least such
Super-Majority of the Preferred Securities may direct the Property Trustee to
give such consent or take such action. If the Property Trustee fails to enforce
its rights under the Subordinated Debt Securities after a holder of record of
Preferred Securities has made a written request, such holder of record may
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights under the Subordinated Debt Securities without first
instituting any legal
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proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption or
repayment, the redemption date or repayment date, respectively), then a holder
of Preferred Securities may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the Subordinated Debt
Securities having a principal amount equal to the aggregate Stated Amount of the
Preferred Securities of such holder on or after the respective due date
specified in the Subordinated Debt Securities. The Property Trustee shall notify
all holders of the Preferred Securities of any notice of default received from
the Indenture Trustee with respect to the Subordinated Debt Securities. Such
notice shall state that such Event of Default also constitutes a Declaration
Event of Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Property Trustee shall not take any of
the actions described in clauses (i), (ii), (iii) or (iv) above unless the
Property Trustee has obtained an opinion of tax counsel to the effect that, as a
result of such action, the Trust will not fail to be classified as a grantor
trust for United States Federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debt Securities, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Subordinated
Debt Securities, the Property Trustee shall request the direction of the holders
of the Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of a Super-Majority, the
Property Trustee may only give such consent at the direction of the holders of
at least the proportion in liquidation amount of the Trust Securities which the
relevant Super-Majority represents of the aggregate principal amount of the
Subordinated Debt Securities outstanding. The Property Trustee shall be under no
obligation to take any such action in accordance with the directions of the
holders of the Trust Securities unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
Federal income tax the Trust will not be classified as other than a grantor
trust.
A waiver of an Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for the Trust to redeem
or repay and cancel Preferred Securities or distribute Subordinated Debt
Securities in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the Company or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Company, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
Holders of the Preferred Securities will have no rights to appoint or
remove the Company Trustees, who may be appointed, removed or replaced solely by
the Company as the indirect or direct holder of all of the Common Securities.
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MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of
the Regular Trustees (and in certain circumstances the Property Trustee),
provided that, if any proposed amendment provides for, or the Regular Trustees
otherwise propose to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of the Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of at least 66-2/3% in
liquidation amount of the Trust Securities affected thereby; provided that, if
any amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or the Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of 66-2/3% in
liquidation amount of such class of securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States Federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee or (iii) cause the Trust to be deemed an 'investment
company' that is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge or be replaced by, or
convey, transfer or lease its properties and assets substantially as an entirety
to, any corporation or other body, except as described below. The Trust may,
with the consent of the Regular Trustees and without the consent of the holders
of the Trust Securities, the Property Trustee or the Delaware Trustee
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that, (i) such successor entity
either (x) expressly assumes all of the obligations of the Trust under the Trust
Securities or (y) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the 'Successor
Securities'), so long as the Successor Securities rank the same as the Preferred
Securities rank with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) the Company expressly acknowledges a trustee of
such successor entity possessing the same powers and duties as the Property
Trustee as the holder of the Subordinated Debt Securities, (iii) such merger,
consolidation, amalgamation or replacement does not cause the Preferred
Securities (including any Successor Securities) or Units to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in the new entity), (v) such successor
entity has a purpose identical to that of the Trust, (vi) prior to such merger,
consolidation, amalgamation or replacement, the Company has received an opinion
of a nationally recognized independent counsel to the Trust experienced in such
matters to the effect that, (a) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Preferred Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the holders'
interest in the new entity), (b) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor such successor entity will be
required to register as an investment company under the 1940 Act and (c) such
merger, consolidation, amalgamation or replacement does not result in a taxable
event to any holders of Preferred Securities or Units or otherwise affect the
Federal income tax consequences of any investment in the Preferred Securities or
Units and (vii) the Company guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
the holders of 100% in liquidation amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation,
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amalgamation, merger or replacement would cause the Trust or the Successor
Entity to be classified as other than a grantor trust for United States Federal
income tax purposes.
BOOK-ENTRY ONLY ISSUANCE
DTC will act as securities depositary for the Preferred Securities. The
Preferred Securities will be issued in the form of one or more global Preferred
Securities certificates, representing the total aggregate number of Preferred
Securities, fully registered in the name of Cede & Co., and will be deposited
with DTC. For a description of DTC and the specific terms of the depositary
arrangements, see 'Description of the Units--Book-Entry System.' As of the date
of this Prospectus, the descriptions herein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Global Units apply in all material respects to any obligations
represented by one or more global Preferred Securities certificates held by DTC.
The Company may appoint a successor to DTC or any successor depositary in the
event DTC or such successor depositary is unable or unwilling to continue as a
depository for the global Preferred Securities certificates.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Preferred
Securities as represented by a global certificate.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Preferred Securities only at the direction of one or more
Participants to whose account the DTC interests in the global Preferred
Securities certificates are credited and only in respect of such portion of the
aggregate liquidation amount of Preferred Securities as to which such
Participant or Participants has or have given such direction. However, if there
is a Declaration Event of Default under the Preferred Securities, DTC will
exchange the global Preferred Securities certificates for definitive ones, which
it will distribute to its Participants.
Redemption notices in respect of the Preferred Securities held in
book-entry form will be sent to Cede & Co. If less than all of the Preferred
Securities are being redeemed, DTC will determine the amount of the interest of
each Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent to vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Participants to whose accounts the Preferred Securities
are credited on the record date (indentified in a listing attached to the
Omnibus Proxy).
Except as provided herein, a Beneficial Owner in a global Preferred
Security certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are required to be
printed and delivered. Additionally, the Regular Trustees (with the consent of
the Company) may decide to discontinue use of the system of book-entry transfers
through DTC (or any successor depositary) with respect to the Preferred
Securities. In that event, certificates for the Preferred Securities will be
printed and delivered.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable distribution dates.
The Paying Agent initially will be Chemical Bank.
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INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Property Trustee is under no obligation
to exercise any of the powers vested in it by the Declaration at the request of
any holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Property Trustee also
serves as the Guarantee Trustee and the Unit Agent.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust so
that the Trust will not be required to register as an 'investment company' under
the 1940 Act or characterized as other than a grantor trust for United States
Federal income tax purposes. The Company is authorized and directed to conduct
its affairs so that the Subordinated Debt Securities will be treated as
indebtedness of the Company for United States Federal income tax purposes. In
this connection, the Company and the Regular Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of the
Trust or the certificate of incorporation of the Company, that each of the
Company and the Regular Trustees determines in its discretion to be necessary or
desirable to achieve such end, as long as such action does not adversely affect
the interests of the holders of the Preferred Securities or vary the terms
thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of the principal terms and provisions of the
Guarantee which will be executed and delivered by the Company for the benefit of
the holders from time to time of Preferred Securities. The Guarantee will be
qualified as an indenture under the Trust Indenture Act. Chemical Bank will act
as indenture trustee under the Guarantee (the 'Guarantee Trustee') for purposes
of compliance with the provisions of the Trust Indenture Act. The terms of the
Guarantee will be those set forth in the Guarantee and those made part of the
Guarantee by the Trust Indenture Act. This summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus is a part, and the Trust
Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit of
the holders of the Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company irrevocably agrees, to the extent
set forth therein, to pay in full to the holders of the Preferred Securities
issued by the Trust, the Guarantee Payments (as defined herein), as and when
due, regardless of any defense, right of set-off or counterclaim which the Trust
may have or assert. The following payments with respect to the Preferred
Securities, to the extent not paid by the Trust (the 'Guarantee Payments'), will
be subject to the Guarantee (without duplication): (i) any accrued and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent of funds of the Trust available therefor, (ii) the amount payable upon
redemption of the Preferred Securities, payable out of funds of the Trust
available therefor with respect to any Preferred Securities called for
redemption by the Trust, (iii) the amount payable with respect to any Preferred
Securities presented for repayment by the holders thereof to the extent the
Trust has funds available therefor, and (iv) upon a liquidation of the Trust
(other than in connection with the distribution of the Subordinated Debt
Securities to the holders of the Preferred Securities or the redemption or
repayment of all the Preferred Securities), the lesser of (a) the aggregate of
the Stated Amount and all
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accrued and unpaid distributions on the Preferred Securities to the date of
payment, to the extent of funds of the Trust available therefor and (b) the
amount of assets of the Trust remaining available for distribution to holders of
Preferred Securities. The Company's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Company to the
holders of Preferred Securities or by causing the Trust to pay such amounts to
such holders.
The Guarantee will not apply to the payment of distributions and other
payments on the Preferred Securities when the Property Trustee does not have
sufficient funds in the Property Account to make such distributions or other
payments. If the Company does not make interest payments on the Subordinated
Debt Securities held by the Property Trustee, the Trust will not make
distributions on the Preferred Securities issued by the Trust and will not have
funds available therefor. See 'Description of the Subordinated Debt
Securities--Certain Covenants.' The Guarantee, when taken together with the
Company's obligations under the Subordinated Debt Securities, the Indenture and
the Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities), will
provide a full and unconditional guarantee on a subordinated basis by the
Company of amounts due on the Preferred Securities.
The Company has also agreed separately irrevocably and unconditionally to
guarantee the obligations of the Trust with respect to the Common Securities to
the same extent as the Guarantee, except that upon the occurrence and during the
continuation of a Declaration Event of Default, holders of Preferred Securities
shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
The procedures whereby Unitholders may exercise voting rights under the
Guarantee are described in 'Description of the Units--Voting Rights of
Unitholders with Respect to Preferred Securities.'
CERTAIN COVENANTS OF THE COMPANY
In the Guarantee, the Company has covenanted that, so long as any Preferred
Securities remain outstanding, if (i) the Company shall be in default with
respect to its payment or other obligations under the Guarantee or (ii) there
shall have occurred and be continuing any event that, with the giving of notice
or the lapse of time or both, would constitute an Event of Default under the
Indenture, then the Company will not (a) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock, except for
dividends or distributions in shares of its capital stock of the same class on
which such dividend or distribution is being paid and conversions or exchanges
of common stock of one class into common stock of another class or (b) make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu with or junior to
the Subordinated Debt Securities (except by conversion into or exchange for
shares of its capital stock and except for a redemption, purchase or other
acquisition of shares of its capital stock made for the purpose of an employee
incentive plan or benefit plan of the Company or any of its subsidiaries).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Preferred Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
holders of not less than 66-2/3% in aggregate liquidation amount of the
outstanding Preferred Securities. The manner of obtaining any such approval of
holders of the Preferred Securities will be as set forth under 'Description of
the Preferred Securities--Voting Rights.' All guarantees and agreements
contained in the Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Preferred Securities then outstanding. Except in connection
with any permitted merger or consolidation of the Company with or into another
entity or any permitted sale, transfer or lease of the Company's assets to
another entity as described below under 'Description of the Subordinated Debt
Securities-- Merger, Consolidation or Sale of Assets,' the Company may not
assign its rights or delegate its obligations under the Guarantee without the
prior approval of the holders of at least 66-2/3% of the aggregate liquidation
amount of the Preferred Securities then outstanding.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Preferred Securities and
be of no further force and effect upon (a) full payment of the amount payable
upon redemption or repayment of such holder's Preferred Securities or (b) the
distribution of Subordinated Debt Securities to the holders of all of the
Preferred Securities, and will terminate completely upon full payment of the
amounts payable upon liquidation of the Trust. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities must restore payment of any sums paid under such
Preferred Securities or the Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its obligations thereunder for more than 30 days.
The holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee. If the Guarantee Trustee fails to enforce
the Guarantee, any holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce the Guarantee Trustee's
rights under the Guarantee, without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. Notwithstanding
the foregoing, if the Company has failed to make a guarantee payment, a holder
of Preferred Securities may directly institute a proceeding against the Company
for enforcement of the Guarantee for such payment. The Company waives any right
or remedy to require that any action be brought first against the Trust or any
other person or entity before proceeding directly against the Company.
STATUS OF THE GUARANTEE; SUBORDINATION
The Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all liabilities of
the Company except any liabilities that may be made pari passu expressly by
their terms, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or preference stock of
any affiliate of the Company and (iii) senior to the Company's common stock. The
Declaration provides that each holder of Preferred Securities by acceptance
thereof agrees to the subordination provisions and other terms of the Guarantee.
Upon the bankruptcy, liquidation or winding up of the Company, its obligations
under the Guarantee will rank junior to all its other liabilities (except as
aforesaid) and, therefore, funds may not be available for payment under the
Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the Guarantee without instituting a
legal proceeding against any other person or entity).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, has undertaken to perform only such duties as are specifically
set forth in the Guarantee and, after default with respect to the Guarantee,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. The Guarantee Trustee also serves as the Property
Trustee and the Unit Agent.
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
laws of the State of New York.
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DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. The Subordinated Debt Securities are a series
of debt securities to be issued under an Indenture dated as of December 1, 1988
(the 'Base Indenture') as supplemented from time to time and as supplemented by
the Third Supplemental Indenture dated as of , 1996 between the Company
and Bankers Trust Company, a New York banking corporation, as trustee (the
'Indenture Trustee') (the 'Indenture'). The Indenture is qualified under the
Trustee Indenture Act. The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Indenture, a copy of which is filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part. The terms of the
Subordinated Debt Securities will include those stated in the Indenture and
those made a part of the Indenture by reference to the Trust Indenture Act.
GENERAL
The Subordinated Debt Securities will be issued as unsecured debt under the
Indenture. The Subordinated Debt Securities will be in an aggregate principal
amount equal to the sum of the aggregate Stated Amount of the Preferred
Securities and the capital contributed by the Company in exchange for the Common
Securities.
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon including Additional Interest (as defined herein), if any, on
, 2026.
The Subordinated Debt Securities will initially be issued in certificated
form in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below. Principal and interest
will be payable, the transfer of the Subordinated Debt Securities will be
registrable and Subordinated Debt Securities will be exchangeable for
Subordinated Debt Securities of other denominations of a like aggregate
principal amount at the corporate trust office of the Indenture Trustee in the
City and State of New York; provided that payment of interest may be made at the
option of the Company by check mailed to the address of the persons entitled
thereto. If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Debt Securities will be issued as a Global Security (as defined
herein). Payments on Subordinated Debt Securities issued as a Global Security
will be made to DTC, a successor depositary.
The covenants contained in the Indenture and the Subordinated Debt
Securities would not afford holders of Subordinated Debt Securities protection
in the event of a highly leveraged or other similar transaction that may
adversely affect such holders.
SUBORDINATION
The Indenture provides that the Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness (as
defined herein) of the Company. Upon any distribution of assets of the Company
to creditors upon any dissolution, winding-up, liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all principal, premium, if any, and interest due or to become
due on all Senior Indebtedness of the Company must be paid in full before the
holders of Subordinated Debt Securities are entitled to receive or retain any
payment. Upon satisfaction of all claims of all Senior Indebtedness then
outstanding, the rights of the holders of the Subordinated Debt Securities will
be subrogated to the rights of the holders of Senior Indebtedness of the Company
to receive payments or distributions applicable to Senior Indebtedness until all
amounts owing on the Subordinated Debt Securities are paid in full.
In addition, no payment of principal, premium, if any, or interest on the
Subordinated Debt Securities may be made in the event and during the
continuation of any default in payment of any Senior Indebtedness or if any
event of default shall exist under any Senior Indebtedness, as 'event of
default' is defined therein or in the agreement under which the same is
outstanding.
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The term 'Senior Indebtedness' means, with respect to the Company, the
following indebtedness or obligations, whether outstanding at the date of the
Indenture or thereafter incurred, assumed, guaranteed or otherwise created,
unless in the instrument creating or evidencing any such indebtedness or
obligation or pursuant to which the same is outstanding it is provided that such
indebtedness or obligation is not superior in right of payment to the
Subordinated Debt Securities: (a) all indebtedness of the Company (including
indebtedness of others guaranteed by the Company), other than the subordinated
Debt Securities (as defined in the Indenture) and any appurtenant Coupons (as
defined in the Indenture) that (i) is for money borrowed, (ii) arises in
connection with the acquisition of any business, properties, securities or
assets of any kind, other than in the ordinary course of the Company's business
as theretofore conducted or (iii) is secured, in whole or in part, by real or
personal property, (b) obligations of the Company (including obligations of
others guaranteed by the Company) as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally accepted
accounting principles and leases of property or assets made as part of any sale
and lease-back transaction and (c) amendments, renewals, extensions,
modifications and refundings of any such indebtedness or obligation.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company. As of March 31, 1996, the aggregate principal
amount of Senior Indebtedness outstanding was $96.1 billion, consisting of the
following: $13.1 billion of term debt, $0.7 billion in commercial paper and
$82.3 billion in other short-term borrowings.
REPAYMENT AT THE OPTION OF THE HOLDER
The Property Trustee, as holder of the Subordinated Debt Securities, will
have the right to require the Company to repay all or a portion of the
Subordinated Debt Securities held by the Property Trustee (the 'Subordinated
Debt Put Option') on the Initial Put Option Exercise Date at a repayment price
of par plus any accrued and unpaid interest, including Additional Interest (as
defined herein), if any, to the date of repayment (the 'Subordinated Debt
Repayment Price') and will be paid by the Company in immediately available
funds, subject to certain conditions. In addition, after the settlement of the
Purchase Contracts on an Early Purchase Date (or a related Delayed Purchase
Date), the Property Trustee, as holder of any Subordinated Debt Securities that
remain outstanding after such date, will have a Subordinated Debt Put Option
with respect to Subordinated Debt Securities held by the Property Trustee on the
Fifth Anniversary Put Option Exercise Date at the Subordinated Debt Repayment
Price.
In order for the Subordinated Debt Securities to be repaid on the Put
Option Exercise Date, the Company must receive at the office or agency of the
Indenture Trustee maintained for that purpose in the Borough of Manhattan, the
City of New York, either (i) not less than 10 nor more than 30 days prior to the
Initial Put Option Exercise Date or (ii) not less than 25 nor more than 60 days
prior to the Fifth Anniversary Put Option Exercise Date, the Subordinated Debt
Securities to be repaid with the form entitled 'Option to Elect Repayment' on
the reverse thereof or otherwise accompanying such Subordinated Debt Securities
duly completed. Any such notice received by the Company will be irrevocable. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of the Subordinated Debt Securities for repayment will be determined
by the Company, whose determination will be final and binding. Notwithstanding
the foregoing, so long as the holder of the Subordinated Debt Securities
presented for repayment is the Property Trustee or the Collateral Agent, and
assuming prior notice to the Indenture Trustee, such Subordinated Debt
Securities may be received at such office or agency of the Indenture Trustee at
any time prior to 11:00 a.m., New York City time, on the Put Option Exercise
Date in the form and manner as may be designated by the Property Trustee or the
Collateral Agent and acceptable to the Indenture Trustee.
The Company will comply with the provisions of Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Exchange Act if required and will file
Schedule 13E-4 or any other schedule if required thereunder.
Payment of the Subordinated Debt Repayment Price to holders of Subordinated
Debt Securities will be made through the Indenture Trustee, subject to the
Indenture Trustee's receipt of payment from the Company in accordance with the
terms of the Indenture. Notwithstanding the foregoing, so long as the holder of
any Subordinated Debt Securities presented for repayment is the Property Trustee
or the
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Collateral Agent, the payment of the Subordinated Debt Repayment Price in
respect of such Subordinated Debt Securities will be made no later than 12:00
noon, New York City time, on the Put Option Exercise Date by check or wire
transfer in immediately available funds at such place and to such account as may
be designated by the Property Trustee or the Collateral Agent, as the case may
be. If the Indenture Trustee holds immediately available funds sufficient to pay
the Subordinated Debt Repayment Price of the Subordinated Debt Securities
presented for repayment, then immediately prior to the close of business on the
Put Option Exercise Date, such Subordinated Debt Securities will cease to be
outstanding and interest thereon will cease to accrue, whether or not such
Subordinated Debt Securities have been received by the Company, and all other
rights of the Holder in respect of the Subordinated Debt Securities will
terminate and lapse (other than the right to receive the Subordinated Debt
Repayment Price, but without interest on such Subordinated Debt Repayment
Price). Neither the Indenture Trustee nor the Company will be required to
register or cause to be registered the transfer of any Subordinated Debt
Securities for which repayment has been elected. Except as described in the
immediately following paragraph, if payment of the Subordinated Debt Repayment
Price in respect of Subordinated Debt Securities is improperly withheld or
refused and not paid by the Company, interest on such Subordinated Debt
Securities will continue to accrue, from the original Put Option Exercise Date
to the actual date of payment, in which case the actual payment date will be
considered the Put Option Exercise Date for purposes of calculating the
Subordinated Debt Repayment Price.
If a Put Default, including a default in the payment of the Subordinated
Debt Repayment Price, shall occur and continue for more than two Business Days
following an Initial Put Option Exercise Date, and the Purchase Date is an Early
Purchase Date, then (i) any exercise of the optional right to elect repayment of
the Subordinated Debt Securities will be deemed rescinded and annulled
automatically and (ii) any Subordinated Debt Securities delivered to the Company
pursuant to such election will be returned to the holders who effected such
delivery.
The rescission or annulment of any exercise of the optional right to elect
repayment of the Subordinated Debt Securities will not prevent holders of the
Subordinated Debt Securities from exercising such right at a later date.
OPTIONAL REDEMPTION BY THE COMPANY
The Company shall have the right to redeem the Subordinated Debt
Securities, in whole (but not in part), at any time on or after ,
2001 upon not less than 30 nor more than 60 days' notice on any Payment Date, at
a redemption price of par plus any accrued and unpaid interest, including
Additional Interest, if any, to the date of redemption (the 'Subordinated Debt
Redemption Price'). Notwithstanding the foregoing, after the settlement of the
Purchase Contracts on the Purchase Date (or a related Delayed Purchase Date),
the right of the Company to redeem any Subordinated Debt Securities that remain
outstanding after such date will be postponed or suspended until the fifth
anniversary of such date. See 'Description of the Units--Description of the
Purchase Contracts-- Acceleration of Purchase.'
The Company may also redeem the Subordinated Debt Securities, at any time
in certain circumstances upon the occurrence of a Tax Event as described under
'Description of the Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution; Optional Distribution,' upon not less than 30 nor
more than 60 days' notice, at the Subordinated Debt Redemption Price.
MATURITY DATE
The maturity date of the Subordinated Debt Securities is ,
2026.
INTEREST
Each Subordinated Debt Security shall bear interest at the rate of %
per annum from the original date of issuance, payable quarterly in arrears on
each Payment Date, commencing 1996, to the person in whose name such
Subordinated Debt Security is registered, at the close of business on the
fifteenth day immediately preceding such Payment Date.
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The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any Payment Date falls on a day that is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, then such payment shall be made on the immediately
preceding Business Day, with the same force and effect as if made on such
Payment Date.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional interest ('Additional Interest')
such additional amounts as shall be required so that the net amounts received
and retained by the Trust after paying any such taxes, duties, assessments or
other governmental charges will be not less than the amounts the Trust would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
EFFECT OF PROPOSED CHANGES IN TAX LAWS
The Clinton Administration has proposed a number of statutory changes in
the Federal income tax rules concerning debt and equity. Under one such
proposal, debt with a maximum maturity of more than 20 years that is not shown
as debt on the applicable balance sheet of the issuer would be recharacterized
as equity of the issuer, with the result that interest would be non-deductible
to the issuer. Under another proposal, no interest deduction would be allowed to
the issuer on debt that is payable in equity of the issuer. These proposals
would generally apply to all debt issued on or after December 7, 1995. The first
proposal would, and the second proposal might, apply to the Subordinated Debt
Securities. If either proposal did apply, a Tax Event would occur.
However, the Chairman of the House Ways and Means Committee and the Senate
Finance Committee, as well as the Ranking Minority Member of the House Ways and
Means Committee, have publicly indicated their intent that the proposals, if
enacted, would not apply to debt issued prior to the date of 'appropriate
Congressional action'. No such Congressional action has yet occurred or is
expected to occur prior to the issuance of the Units. Nevertheless, no assurance
can be given that a tax event will not occur.
CERTAIN COVENANTS
In the Indenture, the Company has covenanted that, so long as any
Subordinated Debt Securities are outstanding, if (i) there shall have occurred
and be continuing an event that, with the giving of notice or the lapse of time
or both, would constitute an Event of Default or (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee, then
the Company will not (a) declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, except for dividends or distributions in
shares of its capital stock of the same class on which such dividend or
distribution is being paid and conversions or exchanges of common stock of one
class into common stock of another class or (b) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the
Subordinated Debt Securities (except by conversion into or exchange for shares
of its capital stock and except for a redemption, purchase or other acquisition
of shares of its capital stock made for the purpose of an employee incentive
plan or benefit plan of the Company or any of its subsidiaries).
For so long as the Trust Securities remain outstanding, the Company has
agreed to (i) directly or indirectly maintain 100% ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Company under the Indenture may succeed to the Company's ownership of such
Common Securities and (ii) use its reasonable efforts to cause the Trust to (x)
remain a statutory
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business trust, except in connection with the distribution of Subordinated Debt
Securities to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration and (y)
otherwise continue to be classified as a grantor trust for United States Federal
income tax purposes.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indenture provides that the Company shall not consolidate with or merge
into any other corporation or person, or, directly or indirectly, convey,
transfer or lease all or substantially all of the properties and assets of the
Company on a consolidated basis to any person, unless either the Company is the
continuing corporation or such corporation or person expressly assumes by
supplemental indenture all the obligations of the Company under the Indenture
and the Subordinated Debt Securities, no default or Event of Default under the
Indenture shall exist immediately after the transaction, the Trust shall not
fail to be classified as a grantor trust for United States Federal income tax
purposes as a result of the transaction and the surviving corporation or such
person is a corporation, partnership or trust organized and validly existing
under the laws of the United States of America, any state thereof or the
District of Columbia.
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes an 'Event of Default'
with respect to the Subordinated Debt Securities: (i) failure for 30 days to pay
interest on the Subordinated Debt Securities, including any Additional Interest
in respect thereof, when due; or (ii) failure to pay principal of or premium, if
any, on the Subordinated Debt Securities when due whether at maturity, upon
redemption, upon repayment, or otherwise; provided, however, that a default in
the payment of the Subordinated Debt Repayment Price on the Initial Put Option
Exercise Date, unless such default continues for more than two Business Days
following the Stated Purchase Date, will not constitute a default for this
purpose; or (iii) failure by the Company to observe or perform any other
covenant contained in the Indenture for 60 days after notice to the Company by
the Trustee or by the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Debt Securities; or (iv) the dissolution,
winding up or termination of the Trust, except in connection with (x) the
distribution of Subordinated Debt Securities to the holders of Preferred
Securities upon the occurrence of a Tax Event, Investment Company Event,
Optional Distribution or liquidation of the Trust, (y) the redemption or
repayment of all the Trust Securities at the Redemption Price or Repayment
Price, as applicable or (z) in connection with certain mergers, consolidations
or amalgamations permitted by the Declaration; or (v) certain events of
bankruptcy, insolvency or reorganization of the Company.
The Indenture Trustee or the holders of not less than 25% in aggregate
principal amount of the outstanding Subordinated Debt Securities may declare the
principal of and interest (including any Additional Interest) on the
Subordinated Debt Securities due and payable immediately on the occurrence of an
Event of Default; provided, however, that, after such acceleration, but before a
judgment or decree based on acceleration, the holders of a majority in aggregate
principal amount of outstanding Subordinated Debt Securities may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the nonpayment of accelerated principal, have been cured or waived as
provided in the Indenture. For information as to waiver of defaults, see
'Modification of the Indenture.'
A default under any other indebtedness of the Company or the Trust would
not constitute an Event of Default under the Subordinated Debt Securities.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee in case an Event of Default occurs and is continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of
Subordinated Debt Securities, unless such holders shall have offered to the
Indenture Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Indenture Trustee, the holders of a majority in
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aggregate principal amount of the outstanding Subordinated Debt Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or exercising any trust or
power conferred on the Indenture Trustee.
No holder of any Subordinated Debt Security will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such holder shall have previously given to the Indenture
Trustee written notice of a continuing Event of Default and unless the holders
of at least 25% in aggregate principal amount of the outstanding Subordinated
Debt Securities shall also have made written request, and offered reasonable
indemnity, to the Indenture Trustee to institute such proceeding as Indenture
Trustee, and the Indenture Trustee shall not have received from the holders of a
majority in aggregate principal amount of the outstanding Subordinated Debt
Securities a direction inconsistent with such request and the Indenture Trustee
shall have failed to act under the Indenture for 60 days after it receives such
notice, request and offer of indemnity. However, such limitations do not apply
to a suit instituted by a holder of Subordinated Debt Securities for enforcement
of payment of the principal of or interest (including any Additional Interest),
on such Subordinated Debt Security on or after the respective due dates
expressed in such Subordinated Debt Security.
The holders of a majority in aggregate principal amount of the outstanding
Subordinated Debt Securities may, on behalf of the holders of all the
Subordinated Debt Securities, waive any past default, except a default in the
payment of principal, premium, if any, or interest (including any Additional
Interest) on the Subordinated Debt Securities.
The Property Trustee is the initial holder of the Subordinated Debt
Securities. An Event of Default also constitutes a Declaration Event of Default.
The holders of Preferred Securities in certain circumstances have the right to
direct the Property Trustee to exercise its rights as the holder of the
Subordinated Debt Securities. See 'Description of the Preferred
Securities--Declaration Events of Default' and '--Voting Rights.'
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Subordinated Debt Securities on the date such
interest or principal is otherwise payable (or in the case of redemption or
repayment, the redemption date or repayment date, respectively), the Company
acknowledges that a holder of Preferred Securities may institute a Direct Action
for payment on or after the respective due date specified in the Subordinated
Debt Securities. Notwithstanding any payments made to such holder of Preferred
Securities by the Company in connection with a Direct Action, the Company shall
remain obligated to pay the principal of or interest on the Subordinated Debt
Securities held by the Trust or the Property Trustee of the Trust, and the
Company shall be subrogated to the rights of the holder of such Preferred
Securities with respect to payments on the Preferred Securities to the extent of
any payments made by the Company to such holder in any Direct Action. The
holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Subordinated Debt Securities.
The Indenture provides that the Indenture Trustee will, within 90 days
after the occurrence of a default known to it with respect to the Subordinated
Debt Securities, give to the holders of Subordinated Debt Securities notice of
such default, unless such default shall have been cured or waived; but, except
in the case of a default in the payment of the principal of or any interest
(including Special Interest) on any Subordinated Debt Security, the Trustee
shall be protected in withholding such notice if it determines in good faith
that the withholding of such notice is in the interest of the holders of
Subordinated Debt Securities.
The Company is required to file annually with the Indenture Trustee and the
Property Trustee a certificate as to whether or not the Company is in compliance
with all the conditions and covenants under the Indenture.
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MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Indenture
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Subordinated Debt Securities, to
modify the Indenture or the rights of the holders of Subordinated Debt
Securities; provided, however, that no such modification may, without the
consent of the holder of each outstanding Subordinated Debt Security affected
thereby, (i) extend the stated maturity of the Subordinated Debt Securities or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, (ii) change the currency in which the principal of
or interest on any Subordinated Debt Security is denominated or payable, (iii)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Subordinated Debt Security or (iv) reduce the percentage in
aggregate principal amount of outstanding Subordinated Debt Securities, the
holders of which are required to consent to any such supplemental indenture.
In addition, the Company and the Indenture Trustee may execute, without the
consent of any holder of Subordinated Debt Securities, any supplemental
indenture to cure any ambiguities, comply with the Trust Indenture Act and for
certain other customary purposes.
The Indenture may not be amended to alter or impair the subordination of
the Subordinated Debt Securities without the consent of each holder of Senior
Indebtedness then outstanding.
GOVERNING LAW
The Indenture and the Subordinated Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Subordinated Debt Securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Indenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Company and certain of its subsidiaries maintain lines of credit and
have other customary banking relationships with the Indenture Trustee and
certain of its affiliates. The borrowings of the Company under the lines of
credit constitute Senior Indebtedness.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with a
liquidation of the Trust, the Subordinated Debt Securities will be issued in the
form of one or more global certificates (each a 'Global Security') registered in
the name of a depositary or its nominee. Except under the limited circumstances
described below, Subordinated Debt Securities represented by the Global Security
will not be exchangeable for, and will not otherwise be issuable as,
Subordinated Debt Securities in definitive form. The Global Securities described
above may not be transferred except by the depositary to a nominee of the
depositary or by a nominee of the depositary to the depositary or another
nominee of the depositary or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in a Global
Security.
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Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debt Securities shall be exchangeable, except
for another Global Security of like denomination and tenor to be registered in
the name of the depositary or its nominee, or to a successor depositary or its
nominee. Accordingly, each Beneficial Owner must rely on the procedures of the
depositary or if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest, to exercise any rights
of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Subordinated Debt Securities. For a description
of DTC and the specific terms of the depositary arrangements, see 'Description
of the Units--Book-Entry System.' As of the date of this Prospectus, the
descriptions herein of DTC's book-entry system and DTC's practices as they
relate to purchases, transfers, notices and payments with respect to the Units
apply in all material respects to any debt obligations represented by one or
more Global Securities held by DTC. The Company may appoint a successor to DTC
or any successor depositary in the event DTC or such successor depositary is
unable or unwilling to continue as a depository for the Global Securities.
None of the Company, the Trust, the Indenture Trustee, any paying agent and
any other agent of the Company or the Indenture Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
representing such Subordinated Debt Securities or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the depositary or its nominee only
if (i) the depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) the Company, in its sole discretion,
determines that such Global Security shall be so exchangeable or (iv) there
shall have occurred an Event of Default with respect to such Subordinated Debt
Securities. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Subordinated Debt Securities registered in
such names as the depositary shall direct. It is expected that such instructions
will be based upon directions received by the depositary from its Participants
with respect to ownership of beneficial interests in such Global Security.
MISCELLANEOUS
In the Indenture, the Company has agreed to pay for all debts and
obligations (other than with respect to the obligation to pay the stated
liquidation amount of and any distributions on the Trust Securities) and all
costs and expenses of the Trust, including the fees and expenses of the Company
Trustees and any taxes and all costs and expenses with respect thereto, to which
the Trust may become subject, except for United States withholding taxes.
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EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED
DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, and to invest the proceeds from such issuance and sale in the
Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Subordinated Debt Securities will
be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Subordinated Debt Securities will match the distribution rate and
distribution and other payment dates for the Preferred Securities; (iii) the
Company shall pay all, and the Trust shall not be obligated to pay, directly or
indirectly, any, costs, expenses, debt and obligations of the Trust (other than
with respect to the Trust Securities); and (iv) the Declaration further provides
that the Regular Trustees shall not take or cause or permit the Trust to, among
other things, engage in any activity that is not consistent with the purposes of
the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by the Company as and to the extent set forth under
'Description of the Guarantee.' If the Company does not make interest payments
on the Subordinated Debt Securities purchased by the Trust, it is expected that
the Trust will not have sufficient funds to pay distributions on the Preferred
Securities. The Guarantee does not apply to any payment of distributions unless
and until the Trust has sufficient funds for the payment of such distributions.
The Guarantee covers the payment of distributions and other payments on the
Preferred Securities only if and to the extent that the Company has made a
payment of interest or principal on the Subordinated Debt Securities held by the
Trust as its sole asset.
If the Company fails to make interest or other payments on the Subordinated
Debt Securities when due, the Declaration provides a mechanism whereby the
holders of the Preferred Securities, using the procedures described in
'Description of the Preferred Securities--Book-Entry Only Issuance' and
'--Voting Rights,' may direct the Property Trustee to enforce its rights under
the Subordinated Debt Securities. If the Property Trustee fails to enforce its
rights under the Subordinated Debt Securities, a holder of Preferred Securities
may institute a legal proceeding against the Company to enforce the Property
Trustee's rights under the Subordinated Debt Securities without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. Notwithstanding the foregoing, if a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Subordinated Debt
Securities on the date such interest or principal is otherwise payable (or in
the case of redemption or repayment, the redemption date or repayment date,
respectively), then a holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Subordinated Debt Securities having a principal amount equal to
the aggregate Stated Amount of the Preferred Securities of such holder on or
after the respective due date specified in the Subordinated Debt Securities. In
connection with such Direct Action, the Company will be subrogated to the rights
of such holder of Preferred Securities under the Declaration to the extent of
any payment made by the Company to such holder of Preferred Securities in such
Direct Action. The Company, under the Guarantee, acknowledges that the Guarantee
Trustee shall enforce the Guarantee on behalf of the holders of the Preferred
Securities. If the Company fails to make payments under the Guarantee, the
Guarantee provides a mechanism whereby the holders of the Preferred Securities
may direct the Guarantee Trustee to enforce its rights thereunder. Any holder of
Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Guarantee Trustee's rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity.
The Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities and the Indenture and its obligations under the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities),
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provides a full and unconditional guarantee by the Company of amounts due on the
Preferred Securities. See 'Description of the Guarantee--General.'
DESCRIPTION OF THE SERIES F PREFERRED STOCK
The description of certain provisions of the Series F Preferred Stock set
forth below does not purport to be complete and is subject to and qualified in
its entirety by reference to the Company's Certificate of Incorporation (as
amended) and the Certificate of Designations relating to the Series F Preferred
Stock, both of which are filed as an exhibit to or incorporated by reference in
the Registration Statement of which this Prospectus forms a part.
GENERAL
As of the date of this Prospectus, the Company is authorized by its
Certificate of Incorporation (as amended) to issue 5,000,000 shares of preferred
stock, without par value, which may be issued from time to time in one or more
series and, subject to the provisions of the Certificate of Incorporation
applicable to all series of preferred stock, shall have such designations,
voting powers, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as
shall be stated in the resolution or resolutions providing for the issue thereof
adopted by the Company's Board of Directors (the 'Board of Directors') or a duly
authorized committee thereof. As of the date of this Prospectus, there are
560,000 shares of the Company's Series A Cumulative Convertible Preferred Stock,
225,000 shares of the Company's 9.50% Cumulative Preferred Stock, Series C,
400,000 shares of the Company's 8.08% Cumulative Preferred Stock, Series D and
500,000 shares of the Company's 8.40% Cumulative Preferred Stock, Series E
outstanding. The Series A Cumulative Convertible Preferred Stock, the 9.50%
Cumulative Preferred Stock, Series C, the 8.08% Cumulative Preferred Stock,
Series D, and the 8.40% Cumulative Preferred Stock, Series E, rank on a parity
as to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up. There are currently reserved for issuance up to
2,500,000 shares of Series B Junior Participating Preferred Stock of the
Company, which shares are issuable upon the exercise of certain preferred share
purchase rights (collectively, the 'Rights'). The Rights will become exercisable
only if a person or group acquires or (unless exercisability is delayed by the
Board of Directors) announces an offer to acquire 20% or more (which percentage
may be reduced to not less than 10% by the Board of Directors prior to the time
the Rights become exercisable) of the outstanding shares of Common Stock (as
defined herein) of the Company. Shares of Series B Junior Participating
Preferred Stock issued upon the exercise of the Rights will rank junior to all
shares of any other class of the Company's preferred stock, including the Series
F Preferred Stock, with respect to the payment of dividends and the distribution
of assets upon liquidation, dissolution or winding up.
Pursuant to action of the Board of Directors or a duly authorized committee
thereof, the shares of Series F Preferred Stock represented by the Depositary
Shares constitute a single series of preferred stock. The Series F Preferred
Stock will not be convertible into Common Stock or shares of any other class or
series of stock of the Company. The Series F Preferred Stock will, when issued
in accordance with the terms of the Purchase Contracts, be fully paid and
nonassessable. The Series F Preferred Stock will have no preemptive rights to
subscribe for any additional securities which may be issued by the Company.
First Chicago Trust Company of New York is the registrar, transfer agent
and dividend disbursing agent for the shares of Series F Preferred Stock.
RANK
As of the date of this Prospectus, the Series F Preferred Stock would rank
as to payment of dividends and distribution of assets upon dissolution,
liquidation or winding up of the Company on a parity with each other outstanding
series of preferred stock of the Company and prior to the Common Stock, $1.00
par value, of the Company (the 'Common Stock') and, when and if issued, to
shares of Series B Junior Participating Preferred Stock.
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DIVIDENDS AND DISTRIBUTIONS
The holders of shares of Series F Preferred Stock, before any dividends may
be declared or paid to the holders of shares of the Common Stock or of any other
capital stock of the Company ranking junior to the Series F Preferred Stock as
to the payment of dividends, will be entitled to receive, when and as declared
by the Board of Directors out of net profits or net assets of the Company
legally available for the payment of dividends, cumulative cash dividends at the
annual rate of % of the liquidation preference per share of Series F
Preferred Stock (equivalent to $ per annum per share of Series F
Preferred Stock), and no more, in equal quarterly payments (rounded down to the
nearest cent) on each Payment Date, commencing on the first Payment Date
following the date of issuance of the Series F Preferred Stock. Dividends will
be payable to the holders of record at the close of business on the fifteenth
day (whether or not a business day) immediately preceding a Payment Date or such
other date, no more than 60 days prior to a Payment Date, as may be determined
by the Board of Directors or a duly authorized committee thereof.
Dividends payable on the Series F Preferred Stock will begin to accrue and
be cumulative from the date of original issue. The amount of dividends payable
for any period shorter than a full quarterly dividend period will be determined
on the basis of twelve 30-day months and a 360-day year. Accrued but unpaid
dividends will not bear interest. Dividends paid on the shares of Series F
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable will be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
Whenever quarterly dividends payable on shares of Series F Preferred Stock
are in arrears, thereafter and until all accrued and unpaid dividends, whether
or not declared, on the outstanding shares of Series F Preferred Stock have been
paid in full or declared and set apart for payment, the Company will not: (i)
declare or pay dividends, or make any other distributions, on any shares of
Common Stock or other capital stock ranking junior (either as to payment of
dividends or distribution of assets upon liquidation, dissolution or winding up)
to the Series F Preferred Stock ('Junior Stock'), other than dividends or
distributions payable in Junior Stock; (ii) declare or pay dividends, or make
any other distributions, on any shares of capital stock ranking on a parity
(either as to payment of dividends or distribution of assets upon liquidation,
dissolution or winding up) with the Series F Preferred Stock ('Parity Stock'),
other than dividends or distributions payable in Junior Stock, and other than
dividends paid ratably on the Series F Preferred Stock and all Parity Stock on
which dividends are payable or in arrears, in proportion to the total amounts to
which the holders of all such shares are then entitled; (iii) redeem or purchase
or otherwise acquire for consideration any shares of Junior Stock, provided that
the Company may at any time redeem, purchase or otherwise acquire any shares of
Junior Stock in exchange for shares of Junior Stock; or (iv) redeem or purchase
or otherwise acquire for consideration any shares of Series F Preferred Stock or
Parity Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series or classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
LIQUIDATION RIGHTS
Upon any liquidation, dissolution or winding up of the Company, no
distribution will be made (i) to the holders of shares of Junior Stock, unless,
prior thereto, the holders of shares of Series F Preferred Stock shall have
received $500 per share, plus an amount per share equal to all accrued but
unpaid dividends thereon, whether or not declared, to the date of such payment
or (ii) to the holders of shares of Parity Stock, except distributions made
ratably on the Series F Preferred Stock and all such Parity Stock, in proportion
to the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. After payment of the full amount of
the liquidating distribution to which holders of the Series F Preferred Stock
are entitled, such holders will have no right or claim to any of the remaining
assets of the Company.
Neither the consolidation, merger or other business combination of the
Company with or into any other individual, firm, corporation or other entity nor
the sale, lease, exchange or conveyance of all or
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any part of the property, assets or business of the Company will be deemed to be
a liquidation, dissolution or winding up of the Company.
REDEMPTION
The shares of the Series F Preferred Stock will not be redeemable by the
Company prior to the later of , 2001, and the date of issue of
the Series F Preferred Stock. The Company, at its option, may redeem its shares
of Series F Preferred Stock, as a whole or in part, at any time or from time to
time on or after the later of , 2001, and the date of issue of
the Series F Preferred Stock at a price of $500 per share, plus an amount per
share equal to all accrued but unpaid dividends thereon, whether or not
declared, to the date fixed for redemption.
Notice of any redemption of Series F Preferred Stock at the option of the
Company shall be given by publication in a newspaper of general circulation in
the Borough of Manhattan, The City of New York, such publication to be made not
less than 30 nor more than 60 days prior to the redemption date. A similar
notice will be mailed by the Company or its agent, postage prepaid, not less
than 30 nor more than 60 days prior to such redemption date, addressed to the
respective holders of record of shares of Series F Preferred Stock at the
addresses shown on the stock transfer records of the Company's transfer agent,
but the mailing of such notice will not be a condition of such redemption. In
order to facilitate the redemption of shares of Series F Preferred Stock, the
Board of Directors may fix a record date for the determination of shares of
Series F Preferred Stock to be redeemed, and such record date will be not more
than 60 days nor less than 30 days prior to the redemption date.
Prior to or on the redemption date, the Company will deposit money for the
payment of the redemption price with First Chicago Trust Company of New York or
another bank or trust company doing business in the Borough of Manhattan, The
City of New York, and having a capital and surplus of at least $10,000,000.
Unless the Company fails to make such deposit, on the redemption date, all
dividends on the Series F Preferred Stock will cease to accrue and all rights of
the holders of Series F Preferred Stock as stockholders of the Company shall
cease, except the right to receive the redemption price (but without interest).
Any monies so deposited which remain unclaimed by the holders of such Series F
Preferred Stock at the end of six years after the redemption date will become
the property of, and be paid by such bank or trust company to, the Company.
VOTING RIGHTS
Holders of the Series F Preferred Stock will have no voting rights except
as set forth below or as otherwise from time to time required by law.
If on any date a total of six quarterly dividends on the Series F Preferred
Stock have fully accrued but have not been paid in full, the holders of shares
of Series F Preferred Stock, together with the holders of all other then
outstanding shares of any series or class of preferred stock of the Company as
to which series or class a total of six quarterly dividends have fully accrued
but have not been paid in full and which series or class is entitled to the
rights described in this paragraph (collectively, 'Defaulted Preferred Stock'),
will have the right, voting together as a class, to elect two directors to the
Board of Directors. Such right of the holders of Defaulted Preferred Stock to
vote for the election of such two directors may be exercised at any annual
meeting or at any special meeting called for such purpose as hereinafter
provided or at any adjournment thereof, or by the written consent, delivered to
the Secretary of the Company, of the holders of a majority of all outstanding
shares of Defaulted Preferred Stock, until dividends in default on the
outstanding shares of Defaulted Preferred Stock have been paid in full (or such
dividends have been declared and funds sufficient therefor set apart for
payment), at which time the term of office of the two directors so elected will
terminate automatically. So long as such right to elect two directors continues
(and unless such right has been exercised by written consent of the holders of a
majority of the outstanding shares of Defaulted Preferred Stock), the Secretary
of the Company may call, and upon the written request of the holders of record
of a majority of the outstanding shares of Defaulted Preferred Stock addressed
to him at the principal office of the Company will be required to call, a
special meeting of the holders of such shares for election of such two
directors. Such meeting will be held within 30 days after delivery of such
request to the Secretary, at the place and upon
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the notice provided by law and in the Company's By-laws for the holding of
meetings of stockholders. No such special meeting or adjournment thereof shall
be held on a date less than 30 days before an annual meeting of stockholders or
any special meeting in lieu thereof. If at any such annual or special meeting or
any adjournment thereof the holders of a majority of the then outstanding shares
of Defaulted Preferred Stock entitled to vote in such election are present or
represented by proxy, or if the holders of a majority of the outstanding shares
of Defaulted Preferred Stock have acted by written consent in lieu of a meeting,
then the authorized number of directors will be increased by two, and the
holders of the Defaulted Preferred Stock will be entitled to elect the two
additional directors. Directors so elected will serve until the next annual
meeting or until their successors are elected and qualify, unless the term of
office of the persons so elected as directors has terminated under the
circumstances described in the second sentence of this paragraph. In case of any
vacancy occurring among the directors elected by the holders of the Defaulted
Preferred Stock as a class, the remaining director who has been so elected may
appoint a successor to hold office for the unexpired term of the director whose
place is vacant. If both directors so elected by the holders of Defaulted
Preferred Stock as a class cease to serve as directors before their terms
expire, the holders of the Defaulted Preferred Stock then outstanding and
entitled to vote for such directors may, by written consent as described above,
or at a special meeting of such holders called as described above, elect
successors to hold office for the unexpired terms of the directors whose places
are vacant.
So long as any shares of Series F Preferred Stock are outstanding, without
first obtaining the consent or approval of the holders of at least two-thirds of
the number of the then outstanding shares of Series F Preferred Stock and all
other series of the Company's preferred stock (the Series F Preferred Stock and
such other series of preferred stock collectively, the 'Outstanding Preferred
Stock'), voting as a single class, given in person or by proxy at a meeting at
which the holders of such shares are entitled to vote separately as a class, the
Company will not: (i) authorize shares of any class or series of stock having
any preference or priority as to dividends or upon liquidation ('Senior Stock')
over the Outstanding Preferred Stock; (ii) reclassify any shares of stock of the
Company into shares of Senior Stock; (iii) authorize any security exchangeable
for, convertible into or evidencing the right to purchase any shares of Senior
Stock; (iv) amend, alter or repeal the Certificate of Incorporation to alter or
change the preferences, rights or powers of the Outstanding Preferred Stock so
as to affect the Outstanding Preferred Stock adversely unless any such
amendment, alteration or repeal would alter or change the preferences, rights or
powers of one or more, but not all, of the series of the Outstanding Preferred
Stock at the time outstanding, in which case the consent or approval of the
holders of at least two-thirds of the number of the outstanding shares of each
such series so affected will be required in lieu of (or if such consent is
required by law, in addition to) the consent or approval of the holders of at
least two-thirds of the number of outstanding shares of Outstanding Preferred
Stock voting as a class; or (v) effect the voluntary liquidation, dissolution or
winding up of the Company, or the sale, lease or exchange of all or
substantially all of the assets, property or business of the Company, or the
merger or consolidation of the Company with or into any other corporation
(except a wholly owned subsidiary of the Company); provided, however, that no
separate vote of the holders of the Outstanding Preferred Stock as a class will
be required in the case of a merger or consolidation or a sale, exchange or
conveyance of all or substantially all of the assets, property or business of
the Company (such transactions being referred to as a 'reorganization') if (A)
the resulting, surviving or acquiring corporation after such reorganization will
have no stock either authorized or outstanding (except such stock of the Company
as may have been authorized or outstanding immediately preceding such
reorganization, or such stock of the resulting, surviving or acquiring
corporation as may be issued in exchange therefor) ranking prior to, or on a
parity with, the Outstanding Preferred Stock or the stock of the resulting,
surviving or acquiring corporation issued in exchange therefor and (B) each
holder of shares of Outstanding Preferred Stock immediately preceding such
reorganization will receive in exchange therefor the same number of shares of
stock, with substantially the same preferences, rights and powers, of the
resulting, surviving or acquiring corporation.
Unless the Company obtains the consent or approval of the holders of a
majority of shares of the Outstanding Preferred Stock, given in person or by
proxy at a meeting at which the holders of such shares are entitled to vote
separately as a class, the Company may not amend the provisions of the
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Certificate of Incorporation in order to increase the amount of the authorized
preferred stock or to authorize any other stock ranking prior to or on a parity
with the Outstanding Preferred Stock either as to payment of dividends or
distribution of assets upon liquidation, dissolution or winding up.
Each share of Series F Preferred Stock will be entitled to one vote on
matters on which holders of the Series F Preferred Stock are entitled to vote.
Since each share of Outstanding Preferred Stock will be entitled to one vote,
the voting power of Series F Preferred Stock on matters on which holders of such
series and holders of other series of Outstanding Preferred Stock are entitled
to vote as a single class will depend on the number of outstanding shares of
Outstanding Preferred Stock, not the aggregate liquidation preference or initial
offering price of the shares of such series.
DESCRIPTION OF THE DEPOSITARY SHARES
The description of certain provisions of the Depositary Shares set forth
below does not purport to be complete and is subject to and qualified in its
entirety by reference to the Deposit Agreement referred to below, the form of
which (including the form of Depositary Receipt (as defined herein)) is filed as
an exhibit or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
Each Depositary Share represents a one-twentieth interest in a share of
Series F Preferred Stock. The shares of Series F Preferred Stock underlying the
Depositary Shares will be deposited with First Chicago Trust Company of New
York, as Depositary (the 'Depositary') under a Deposit Agreement (the 'Deposit
Agreement') among the Company, the Depositary and the holders from time to time
of the depositary receipts issued by the Depositary thereunder (the 'Depositary
Receipts'). The Depositary Receipts so issued will evidence the Depositary
Shares. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled through the Depositary, in proportion to the
one-twentieth interest in a share of Series F Preferred Stock underlying such
Depositary Share, to all rights and preferences of a share of Series F Preferred
Stock (including dividend, voting, redemption and liquidation rights). Since
each share of Series F Preferred Stock entitles the holder thereof to one vote
on matters on which the Series F Preferred Stock is entitled to vote, each
Depositary Share will, in effect, entitle the holder thereof to one-twentieth of
a vote thereon, rather than one full vote. The principal office of the
Depositary is currently located at 14 Wall Street, New York, New York.
First Chicago Trust Company of New York will be the transfer agent and
registrar for the Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Series F Preferred Stock to the record
holders of Depositary Shares in proportion to the numbers of such Depositary
Shares owned by such holders on the relevant record date. The Depositary will
distribute only such amount, however, as can be distributed without attributing
to any holder of Depositary Shares a fraction of one cent, and any balance not
so distributable will be held by the Depositary (without liability for interest
thereon) and will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Receipts then
outstanding.
In the event of a distribution other than in cash in respect of the Series
F Preferred Stock deposited under the Deposit Agreement, the Depositary will
distribute the property received by it to the record holders of the Depositary
Shares entitled thereto, in proportion, as nearly as may be practicable, to the
numbers of Depositary Shares owned by such holders on the relevant record date.
If, however, the Depositary determines that it is not feasible to make such
distribution, the Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable to effect such distribution,
including the sale of such property and distribution of the net proceeds from
such sale to such holders.
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REDEMPTION OF DEPOSITARY SHARES
The Depositary Shares will be redeemed from the proceeds received by the
Depositary as a result of any redemption of the Series F Preferred Stock held by
the Depositary. Whenever the Company redeems shares of Series F Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares representing the shares of Series F
Preferred Stock so redeemed. The Depositary will mail the notice of redemption
not less than 20 and not more than 50 days prior to the date fixed for
redemption to the record holders of the Depositary Shares to be so redeemed. The
redemption price per Depositary Share will be equal to $25.00 per Depositary
Share plus accrued but unpaid dividends on the Series F Preferred Stock. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
Notice of redemption having been given as described above, from and after
the date fixed for redemption, unless the Company shall have failed to redeem
the shares of Series F Preferred Stock so called for redemption, the Depositary
shares so called for redemption will no longer be deemed to be outstanding, and
all rights of the holders of such Depositary Shares will cease, except for the
right to receive the monies payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon such
redemption, upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING RIGHTS
As soon as practicable after receipt of notice of any meeting at which the
holders of the Series F Preferred Stock are entitled to vote, the Depositary
will mail the information contained in such notice of meeting to the holders of
the Depositary Shares as of the record date for such meeting. Each such record
holder of Depositary Shares will be entitled, subject to any applicable
restrictions, to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of the Series F Preferred Stock represented by such
record holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the amount of the Series F Preferred Stock represented by
such Depositary Shares in accordance with any such instructions, and the Company
will agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
shares of the Series F Preferred Stock deposited under a Deposit Agreement to
the extent that it does not receive specific instructions from the holders of
Depositary Shares representing such Preferred Stock.
WITHDRAWAL OF STOCK
Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption), and subject to the terms of the Deposit Agreement, the owner of the
Depositary Shares evidenced thereby is entitled to delivery of whole shares of
Series F Preferred Stock and all money and other property, if any, represented
by such Depositary Shares. Partial shares of Series F Preferred Stock will not
be issued. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of Series F Preferred Stock to be withdrawn, the
relevant Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. Holders
of shares of Series F Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Shares therefor. The Company does not expect that there will be any
public trading market for the Series F Preferred Stock, except as represented by
the Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary. However, any
amendment which materially and adversely alters the rights of the existing
holders of Depositary Shares will not be effective unless such amendment has
been approved
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by the holders of at least a majority of the Depositary Shares then outstanding
under the Deposit Agreement. The Deposit Agreement provides that each holder of
Depositary Shares at the time any such amendment becomes effective which
continues to hold such Depositary Shares will be deemed to have consented to
such amendment and will be bound thereby. No such amendment may impair the
rights, subject to the terms of the Deposit Agreement, of any owner of any
Depositary Shares issued under the Deposit Agreement to surrender the Depositary
Receipt evidencing such Depositary Shares with instructions to the Depositary to
deliver to the holder the whole shares of Series F Preferred Stock represented
by such Depositary Shares and all money and other property, if any, represented
thereby, except in order to comply with mandatory provisions of applicable law.
The Deposit Agreement may be terminated by the Company or the Depositary only if
(i) all outstanding Depositary Shares relating thereto have been redeemed or
(ii) there has been a final distribution in respect of the Series F Preferred
Stock in connection with any liquidation, dissolution or winding up of the
Company and such distribution has been distributed to the holders of the
Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Series F Preferred Stock and the initial issuance of the Depositary Shares and
any redemption of the Series F Preferred Stock. Holders of Depositary Shares
will pay other transfer and other taxes and governmental charges and certain
other charges as are provided in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of the Depositary Shares all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders of the
Series F Preferred Stock. In addition, the Depositary will make available for
inspection by holders of the Depositary Shares at the principal office of the
Depositary, and at such other places as it may from time to time deem advisable,
any reports and communications received from the Company which are received by
the Depositary as the holder of the Series F Preferred Stock.
Neither the Depositary nor the Company will assume any obligation or will
be subject to any liability under the Deposit Agreement to holders of the
Depositary Shares other than for its negligence or willful misconduct. Neither
the Depositary nor the Company will be liable if it is prevented or delayed by
law or any circumstance beyond its control in performing its obligations under
the Deposit Agreement. The obligations of the Company and any Depositary under
the Deposit Agreement are limited to performance in good faith of their duties
thereunder, and they will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Series F Preferred Stock
unless satisfactory indemnity is furnished. The Company and the Depositary may
rely on written advice of counsel or accountants, on information provided by
persons presenting Series F Preferred Stock for deposit, holders of Depositary
Shares or other persons believed in good faith to be competent to give such
information and on documents believed to be genuine and to have been signed or
presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital and surplus
of at least $50,000,000.
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BOOK-ENTRY PROCEDURES AND SETTLEMENT WITH RESPECT TO SERIES F PREFERRED STOCK
AND DEPOSITARY SHARES
The Series F Preferred Stock or Depositary Shares will initially be issued
in book-entry form in the form of one or more global stock certificates or
Depositary Receipts registered in the name of the nominee of the depository, DTC
(which term, as used herein, includes any successor or alternate depository
selected by the Company).
DTC's nominee for all purposes will be considered the sole owner or holder
of the Preferred Stock or Depositary Shares held in book-entry form. Owners of
beneficial interests in the global stock certificates or Depositary Receipts
will not be entitled to have Preferred Stock or Depositary Shares registered in
their names, will not receive or be entitled to receive physical delivery of
Preferred Stock or Depositary Shares in definitive form, and will not be
considered the holders thereof under the Certificate of Incorporation or the
Deposit Agreement.
Neither the Company nor the Depository will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global stock certificates or Depositary
Receipts, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The recording of beneficial ownership of, and the payment of dividends or
other distributions on, Series F Preferred Stock or Depositary Shares held in
global form, and the circumstances under which the Company will issue Series F
Preferred Stock or Depositary Shares in definitive form in exchange for the
global stock certificates or Depositary Receipts will be as described above with
regard to the Global Units under 'Description of the Units--Book-Entry System.'
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of the material United States Federal income tax
consequences of the purchase, ownership and disposition of Units, Subordinated
Debt Securities, Preferred Securities, Purchase Contracts, Series F Preferred
Stock and Depositary Shares (collectively, 'Covered Securities'). It represents
the views of Cravath, Swaine & Moore, tax counsel to the Trust ('Tax Counsel').
Unless otherwise stated, it deals only with holders who purchase Units upon
their original issuance ('Initial Holders') for an amount equal to the Stated
Amount of the Preferred Securities, and who hold the Covered Securities as
capital assets.
This summary does not address tax considerations applicable to investors
that (i) are subject to special U.S. Federal income tax treatment, such as
dealers in securities, (ii) hold any of the Covered Securities as part of a
'straddle,' 'conversion transaction,' or other integrated investment comprised
of any of the Covered Securities and one or more other investments or (iii) have
a functional currency other than the U.S. Dollar. It does not address (i) the
tax consequences to shareholders, partners or beneficiaries of a holder of
Covered Securities or (ii) alternative minimum taxes or state, local or foreign
taxes.
This summary is based on the Internal Revenue Code, Treasury regulations
thereunder and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis. This discussion is not binding on the Internal Revenue Service (the
'Service'). There is no authority on securities similar to the Units, and there
can be no assurance that the Service will take a similar view with respect to
the tax consequences described below.
For purposes of this summary, a 'U.S. Holder' is a holder who is (i) a
citizen or a resident of the United States (or any state thereof), (ii) a
corporation organized in or under the laws of the United States or any political
subdivision thereof, (iii) an estate or trust, the income of which is subject to
United States Federal income tax regardless of its source and (iv) a partnership
to the extent any of its partners are otherwise U.S. Holders. A 'Non-U.S.
Holder' is any holder who is not a U.S. Holder.
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CLASSIFICATION OF THE TRUST
In the opinion of Tax Counsel, under current law, and based on certain
assumptions concerning the underlying documents for the transaction, described
in the opinion of Tax Counsel filed as an exhibit to the Registration Statement
of which this Prospectus is a part, the Trust will be classified for Federal
income tax purposes as a grantor trust and not as a partnership or an
association taxable as a corporation. Moreover, according to such opinion, each
holder of a Preferred Security will be considered the owner of an undivided
interest in the Subordinated Debt Securities and will take into account a pro
rata share of all items of income, expense or deduction of the Trust.
CLASSIFICATION OF THE SUBORDINATED DEBT SECURITIES
The question of whether a security is debt or equity for Federal income tax
purposes is inherently factual, and there is no authority concerning the tax
characterization of securities having terms similar to the Subordinated Debt
Securities. Nevertheless, in the opinion of Tax Counsel, under current law, the
Subordinated Debt Securities will be classified as indebtedness of the Company.
The opinion of Tax Counsel is based on certain facts and assumptions,
including assumptions concerning the underlying documents for the transaction,
described in the opinion of Tax Counsel filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The assumed facts include (i) the
Preferred Securities would (if rated) be treated by one or more major rating
agencies as subordinated debt for ratings purposes upon issuance of the Units
and carry at least an investment grade rating, (ii) the rates paid on the
Subordinated Debt Securities, the Depositary Shares and the Purchase Contracts
are market rates, (iii) the expectation that Subordinated Debt Securities would,
if traded, trade at a significant premium if the Company were to accelerate the
Purchase Contracts immediately after issuance of the Units, and (iv) there is a
significant possibility (taking into account interest rate levels and the credit
quality of the Company) that, upon the Company's acceleration of the Purchase
Contracts, it would be in the interest of holders of Units to pay cash for the
Depositary Shares and retain the Preferred Securities, and that in such case a
market would develop for the Preferred Securities so that a significant number
of holders of Units would do so.
EFFECT OF PROPOSED CHANGES IN TAX LAWS
The Clinton Administration has proposed a number of statutory changes in
the Federal income tax rules concerning debt and equity. Under one such
proposal, debt with a maximum maturity of more than 20 years that is not shown
as debt on the applicable balance sheet of the issuer would be recharacterized
as equity of the issuer, with the result that interest would be non-deductible
to the issuer. Under another proposal, no interest deduction would be allowed to
the issuer on debt that is payable in equity of the issuer. These proposals
would generally apply to all debt issued on or after December 7, 1995. The first
proposal would, and the second proposal might, apply to the Subordinated Debt
Securities. If either proposal did apply, a Tax Event would occur.
However, the Chairmen of the House Ways and Means Committee and the Senate
Finance Committee, as well as the Ranking Minority Member of the House Ways and
Means Committee, have publicly indicated their intent that the proposals, if
enacted, would not apply to debt issued prior to the date of 'appropriate
Congressional action.' No such Congressional action has yet occurred or is
expected to occur prior to the issuance of the Units. Nevertheless, no assurance
can be given that a Tax Event will not occur.
U.S. HOLDERS
Acquisition of the Units
The purchase price of each Unit must be allocated between the Preferred
Security and the Purchase Contract included in a Unit in proportion to their
respective fair market values at the time of purchase. Such allocation will
establish the holder's initial tax basis in the Preferred Security or Purchase
Contract.
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The Company will take the position that, at the time of issuance of the
Units, the fair market value of the Preferred Security is equal to its Stated
Amount, and the fair market value of the Purchase Contract is zero. As a result,
an Initial Holder should allocate the entire purchase price for a Unit (i.e.,
the Stated Amount of the Preferred Security) to the Preferred Security, and
should not allocate any portion of the purchase price to the Purchase Contract.
The Company's position will be binding on each Initial Holder, unless the holder
explicitly discloses (on a statement attached to the holder's timely filed
Federal income tax return for the year in which the Unit is acquired) that the
holder's position is different than the Company's.
Current Distributions
Interest income on the Subordinated Debt Securities will be taxable to
holders of Preferred Securities when received by the Trust or accrued by the
holder, in accordance with the holder's method of accounting. Payments by the
Company under the Guarantee will be treated as if made on the Subordinated Debt
Securities. Distributions by the Trust on the Preferred Securities representing
interest received by the Trust on the Subordinated Debt Securities will not
otherwise be taxable to holders, and will not be eligible for the corporate
dividends received deduction.
The Company believes, and intends to file information returns on the basis
that, the Contract Fee constitutes ordinary income to holders. Holders should
consult their own tax advisors concerning the proper characterization of the
Contract Fee, including the possibility that the Contract Fee should not be
included in income upon receipt by analogy to the treatment of option premium.
Sale or Disposition of Units
A U.S. Holder will generally recognize gain or loss on the sale or other
disposition of a Covered Security. Such gain or loss will be separately
calculated with respect to the Preferred Security and the Purchase Contract, by
allocating the sale proceeds between those items in proportion to their fair
market values. The aggregate amount of gain or loss should generally equal the
difference between the sum of any cash and the fair market value of the property
received in the sale or other disposition (reduced by any amount attributable to
accrued interest, which will be taxable as such) and the holder's tax basis in
the Unit. Any gain or loss will generally be capital gain or loss and will be
long-term capital gain or loss if the Unit was held for more than one year.
If the sale or disposition of the Units occurs when the Purchase Contract
has a negative value, the holder might be considered to have received additional
consideration for the Preferred Security in an amount equal to such negative
value, and to have paid such amount to be released from the holder's obligation
under the Purchase Contract. Such a characterization should not have an adverse
effect on holders. Holders should consult their tax advisors regarding a sale or
disposition of Units at a time when the Purchase Contract has a negative value.
Redemption of Preferred Securities and Cancellation of Purchase Contract
Upon a redemption or repayment by the Trust of Preferred Securities, an
Initial Holder should not recognize gain or loss because the holder's tax basis
in the Preferred Security will equal the amount received on the redemption or
repayment. If the Purchase Contract is canceled at the same time, the Initial
Holder will have no gain or loss because the tax basis of the Purchase Contract
is zero.
Purchase of Depositary Shares
An Initial Holder who exercises the Put Option should not recognize any
taxable gain or loss. A U.S. Holder who retains the Preferred Security and
tenders cash under the Purchase Contract will have no taxable gain or loss.
A U. S. Holder's tax basis in the Depositary Share will equal the purchase
price for such Depositary Share plus the holder's tax basis in the Purchase
Contract (zero in the case of an Initial Holder). The holding period for the
Depositary Shares will begin on the day after the purchase date.
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Termination of Purchase Contract
An Initial Holder would not recognize gain or loss upon termination of a
Purchase Contract upon the bankruptcy of the Company, following a Put Default,
or otherwise, since such holder's tax basis in the Purchase Contract is zero.
Separation of a Unit
A U.S. Holder that elects to post Eligible Collateral and separate the
Preferred Security from the related Purchase Contract would not recognize
taxable gain or loss, and the holder's tax basis in the Preferred Security and
Purchase Contract will remain unchanged. The U.S. Holder will recognize ordinary
income with respect to interest earned on the Eligible Collateral. If the holder
pays cash to acquire a Depositary Share under the Purchase Contract, the
holder's tax basis in the Depositary Share will be the purchase price paid for
such Depositary Share plus the tax basis in the Purchase Contract (which would
be zero in the case of an Initial Holder).
If the U.S. Holder delivers a Preferred Security to the Collateral Agent in
exchange for release of the Eligible Collateral and issuance of a Unit to the
holder, the holder should not have taxable gain or loss.
Secondary Holders of Units
The purchase price paid for a Unit by a holder that is not an Initial
Holder (a 'Secondary Holder') must be allocated between the Preferred Security
and the Purchase Contact in accordance with their respective fair market values
at the time of purchase. This allocation will establish the holder's tax basis
in each such security. Subject to the market discount and premium rules
discussed below, a Secondary Holder will be taxable on current income from a
Unit as discussed under 'Current Distributions.'
If a Secondary Holder purchases a Unit when the Purchase Contract has a
negative value, the holder generally should have an aggregate tax basis in a
Unit equal to the price paid for the Unit. However, Secondary Holders should
consult their tax advisors regarding the consequences of such a purchase.
If the tax basis of a Preferred Security at the time of purchase is less
than the Stated Amount, the difference generally will be considered 'market
discount' with respect to the underlying Subordinated Debt Security, which could
result in a portion of any gain realized on the sale or disposition of the
Preferred Security being recharacterized as ordinary income. If the tax basis of
a Preferred Security at the time of purchase exceeds the Stated Amount, the
excess will be 'bond premium' with respect to the underlying Subordinated Debt
Security, which the holder may elect to amortize as an offset to interest income
on the Subordinated Debt Security. Secondary Holders should consult their tax
advisors regarding the application of the market discount and bond premium rules
to the Preferred Securities.
A Secondary Holder may recognize taxable gain or loss upon a sale or other
disposition of Units. See 'Sale or Disposition of Units.' Upon the redemption or
repayment of Preferred Securities by the Trust and cancellation of the Purchase
Contract, the holder may have taxable gain or loss on the Preferred Securities
and may have a taxable loss equal to the holder's basis in the Purchase
Contract. Any loss on the sale or cancellation of the Purchase Contract will be
a capital loss.
A Secondary Holder that acquires Depositary Shares will generally be
subject to the rules under 'Purchase of Depositary Shares.' However, certain
consequences will differ. For example, a Secondary Holder that exercises the Put
Option may recognize a taxable gain upon the redemption or repayment of the
Preferred Security, although any loss on the redemption or repayment may not be
recognized. Moreover, a Secondary Holder's tax basis in the Depositary Shares
will include any tax basis of the holder in the Purchase Contract.
Distribution of Subordinated Debt Securities by the Trust
If Subordinated Debt Securities are distributed to holders in exchange for
the Preferred Securities in liquidation of the Trust, the distribution would not
be taxable to holders. A holder's tax basis and holding period in the Preferred
Securities would carry over to the Subordinated Debt Securities.
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Depositary Shares
A holder of Depositary Shares will be treated as the owner of the Series F
Preferred Stock represented by such Depositary Shares. Distributions made with
respect to the Depositary Shares will constitute dividends to the extent paid
out of current or accumulated earnings and profits of the Company, as determined
for U.S. Federal income tax purposes. Dividends will be eligible for the
corporate dividends received deduction, subject to applicable limitations.
A U.S. holder who sells or otherwise disposes of a Depositary Share
generally will recognize capital gain or loss for U.S. Federal income tax
purposes in an amount equal to the difference between the amount realized and
the holder's tax basis (assuming, in the case of a redemption of the stock, that
the holder does not own, and is not deemed to own, any common stock of the
Company). Such capital gain or loss will be long-term capital gain or loss if
the holder has held the stock for more than one year.
NON-U.S. HOLDERS
The discussion below applies to Non-U.S. Holders and assumes that (i) an
individual Non-U.S. Holder is not present in the United States for 183 days or
more in the taxable year and (ii) the Non-U.S. Holder's ownership of a Covered
Security is not effectively connected with the conduct of a trade or business in
the United States.
Current Payments
A Non-U.S. Holder of a Preferred Security would not be subject to U.S.
Federal income or withholding tax with respect to the holder's pro rata share of
interest paid on the Subordinated Debt Securities, provided that the Non-U.S.
Holder (i) does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote;
(ii) is not a controlled foreign corporation for U.S. tax purposes that is
related to the Company (directly or indirectly) through stock ownership; and
(iii) satisfies certain applicable certification requirements regarding the
holder's identity and residence. However, U.S. withholding tax would apply to
interest paid on the Subordinated Debt Securities if, contrary to the opinion of
Tax Counsel, the Service successfully contended that the Subordinated Debt
Securities were equity rather than debt for Federal income tax purposes.
Non-U.S. Holders of Purchase Contracts will be subject to U.S. withholding
tax with respect to any Contract Fee payments at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty.
Dividends on Depositary Shares
A Non-U.S. Holder of a Depositary Share will be subject to withholding tax
with respect to dividend distributions on such stock at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty.
Sale or Disposition
A Non-U.S. Holder will not be subject to U.S. Federal income or withholding
tax with respect to a sale, redemption or other disposition of a Covered
Security (assuming, in the case of a redemption of a Depositary Share, that the
holder does not own and is not deemed to own any Common Stock of the Company).
Estate Tax Consequences
In the case of a Non-U.S. Holder that is an individual, Purchase Contracts
and Depositary Shares would be deemed to be situated in the United States for
United States estate tax purposes. As a result, the estate of an individual
Non-U.S. Holder would be required to file United States estate tax returns, and
might be liable for United States estate tax, if the value of the Purchase
Contracts and the Depositary Shares (together with other United States assets)
owned by the Non-U.S. Holder exceeded $60,000 (reduced by the amount of certain
gifts and other adjustments).
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ERISA CONSIDERATIONS
Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974, as amended ('ERISA'), or Section 4975 of
the Code or entities whose assets are considered assets of such plans ('Plans'),
may purchase Units, Preferred Securities and Depositary Shares subject to the
investing fiduciary's determination that the investment in Units, Preferred
Securities and Depositary Shares satisfied ERISA's fiduciary standards and other
requirements applicable to investments by the Plan.
In any case, Salomon Inc and/or any of its affiliates may be considered a
'party in interest' (within the meaning of ERISA) or a 'disqualified person'
(within the meaning of Section 4975 of the Code) with respect to certain plans
(generally, Plans maintained or sponsored by, or contributed to by, any such
persons or Plans with respect to which any such person is a fiduciary or service
provider). The acquisition and ownership of Units, Preferred Securities and
Depositary Shares by a Plan with respect to which Salomon Inc or any of its
affiliates is considered a party in interest or a disqualified person, may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such securities are acquired pursuant to and in accordance with
an applicable exemption.
Any Plans proposing to acquire the Units, Preferred Securities or
Depositary Shares should consult with their own ERISA counsel and should not
acquire the Units, Preferred Securities or Depositary Shares unless it is
determined that such acquisition does not constitute a prohibited transaction.
Any such acquisition by a Plan shall be deemed a representation by the Plan and
the fiduciary effecting the investment on behalf of the Plan that such
acquisition does not and will not constitute a prohibited transaction for which
an exemption is not available.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the 'Underwriting Agreement') among the Company, the Trust and the Underwriters
named below (the 'Underwriters'), the Company and the Trust have agreed to sell
to each of the Underwriters named below, and each of such Underwriters, for whom
Salomon Brothers Inc is acting as representative, has severally agreed to
purchase from the Company and the Trust, the number of Units set forth below
opposite such Underwriter's name.
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF UNITS
- ---------------------------------------------------------------------------------------------- ----------------
<S> <C>
Salomon Brothers Inc..........................................................................
......................................................................
......................................................................
----------------
Total......................................................................................... 10,000,000
----------------
----------------
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, that the obligations of
the Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all of the Units offered hereby if any of the Units
are purchased.
The Company and the Trust have been advised by the Underwriters that the
Underwriters propose to offer the Units directly to the public initially at the
public offering price set forth on the cover of this Prospectus and to certain
dealers at such price less a concession not in excess of $ per Unit.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Unit to other dealers. After the initial public
offering, such public offering price and such concession and reallowance may be
changed.
The Underwriting Agreement provides that the Company and the Trust will
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to payments the
Underwriters may be required to make in respect thereof.
64
<PAGE>
The Company and the Trust have granted to the Underwriters an option,
exercisable for the 30-day period after the date of this Prospectus, to purchase
up to an additional 1,500,000 Units from the Company and the Trust, at the same
price per Unit as the initial Units to be purchased by the Underwriters. The
Underwriters may exercise such option only for the purpose of covering over-
allotments, if any, incurred in connection with the sale of Units offered
hereby. To the extent that the Underwriters exercise such option, each
Underwriter will have a firm commitment, subject to certain conditions, to
purchase the same proportion of the Units as the number of Units to be purchased
and offered by such Underwriter in the above table bears to the total number of
initial Units to be purchased by the Underwriters.
Salomon Brothers Inc is an indirect wholly owned subsidiary of the Company.
The participation of Salomon Brothers Inc in the offer and sale of the Units in
respect of which this Prospectus is delivered complies with the requirements of
Rule 2720 of the Conduct Rules of the NASD regarding underwriting securities of
an affiliate of an NASD member. Salomon Brothers Inc may act as underwriter in
an 'at the market' equity offering pursuant to Rule 415(a)(4) under the
Securities Act.
The Units are a new issue of securities with no established trading market.
Application will be made to list the Units on the NYSE. The Underwriters may
make a market in the Units, but the Underwriters are not obligated to do so and
may discontinue market-making at any time without notice. No assurance can be
given as to the liquidity of the trading market of the Units. See 'Risk
Factors--Absence of Trading Market; Separation of the Units.'
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 the Company
and its affiliates.
EXPERTS
The financial statements and related schedules included in the Company's
1995 10-K have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in this Prospectus in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
LEGAL OPINIONS
Certain legal matters relating to the Securities will be passed upon for
the Trust and the Company by Cravath, Swaine & Moore, New York, New York, and
for the Trust by Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware. Certain
legal matters relating to the Securities will be passed upon for the
Underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New York.
65
<PAGE>
GLOSSARY OF DEFINED TERMS
'1940 Act' means the Investment Company Act of 1940, as amended.
'Additional Interest' has the meaning set forth under 'Description of the
Subordinated Debt Securities--Additional Interest.'
'Base Indenture' means the indenture dated as of December 1, 1988 between the
Company and Bankers Trust Company, as indenture trustee.
'Beneficial Owner' has the meaning set forth under 'Description of the
Units--Book-Entry System.'
'Board of Directors' means the Board of Directors of the Company or a duly
authorized committee thereof.
'Business Day' means any day that is not a Saturday, Sunday or a day on which
the NYSE or banking institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to be closed.
'Cash Settlement' has the meaning set forth under 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
'Change in 1940 Act Law' has the meaning set forth under 'Tax Event or
Investment Company Event Redemption or Distribution; Optional Distribution.'
'Collateral' means, collectively, pledged Preferred Securities and Eligible
Collateral.
'Collateral Agent' means The Bank of New York, as Collateral Agent under the
Pledge Agreement, or any successor thereto.
'Collateral Settlement' has the meaning set forth under 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
'Commission' means the Securities and Exchange Commission.
'Common Security' means an undivided beneficial interest in the assets of the
Trust.
'Common Stock' means the Common Stock, $1.00 par value, of the Company.
'Company' means Salomon Inc until a successor organization or company shall have
become such, and thereafter Company shall mean such successor organization or
company.
'Company Trustees' means the trustees of the Trust.
'Contract Fee' means the fee payable by the Company in respect of each Purchase
Contract, equal to % per annum of the Stated Amount, computed on the basis
of a 360-day year consisting of 12 months of 30 days.
'Covered Securities' has the meaning set forth under 'United States Income
Taxation--General.'
'Declaration' means the Amended and Restated Declaration of Trust of the Trust
dated as of , 1996 among the Company, as sponsor, the trustees
named therein and the holders from time to time of individual beneficial
interests in the assets of the Trust.
'Declaration Event of Default' means, in respect of the Trust Securities, an
Event of Default has occurred and is continuing in respect of the Subordinated
Debt Securities.
'Defaulted Preferred Stock' has the meaning set forth under 'Description of the
Series F Preferred Stock--Voting Rights.'
'Delaware Trustee' means Chemical Bank Delaware, as trustee under the
Declaration, or any successor thereto that maintains its principal place of
business in the State of Delaware.
G-1
<PAGE>
'Delayed Purchase Date' has the meaning set forth under 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
'Deposit Agreement' means the Depositary Agreement dated as of
, 1996 among the Company, the Depositary and the holders from
time to time of the Depositary Receipts.
'Depositary' means First Chicago Trust Company of New York, as Depositary under
the Deposit Agreement, or any successor thereto.
'Depositary Receipt' means any one of the receipts evidencing an interest in the
Depositary Shares issued under the Deposit Agreement.
'Depositary Share' means any one of the Depositary Shares, each evidencing a
one-twentieth interest in a share of Series F Preferred Stock, held by the
Depositary under the Deposit Agreement.
'Direct Action' has the meaning set forth under 'Description of the Preferred
Securities--Declaration Events of Default.'
'Dissolution Tax Opinion' has the meaning set forth under 'Description of the
Preferred Securities-- Tax Event or Investment Company Event Redemption or
Distribution; Optional Distribution.'
'DTC' means The Depository Trust Company.
'Early Purchase Date' has the meaning set forth under 'Description of the
Units--Description of the Purchase Contracts--Acceleration of Purchase.'
'Eligible Collateral' means (i) cash and/or (ii) U.S. Treasury Securities with a
maturity at the time of determination of 30 days or less.
'ERISA' means the Employee Retirement Income Security Act of 1974, as amended.
'Event of Default' means an event of default under the Indenture.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.
'Extension Period' has the meaning set forth under 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
'Fifth Anniversary Put Option Exercise Date' means the fifth anniversary of an
Early Purchase Date.
'Global Security' means a global certificate representing the Subordinated Debt
Securities registered in the name of a depositary or its nominee.
'Global Unit' means a Unit deposited with DTC.
'Guarantee' means the guarantee by the Company of the obligations of the Trust
with respect to the Preferred Securities.
'Guarantee Payments' means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Trust: (i) any accrued and unpaid distributions that are required to
be paid on the Preferred Securities to the extent of funds of the Trust
available therefor; (ii) the amount payable upon redemption of the Preferred
Securities, payable out of funds of the Trust available therefor with respect to
any Preferred Securities called for redemption by the Trust; (iii) the amount
payable with respect to any Preferred Securities presented for repayment by the
holders thereof to the extent the Trust has funds available therefor; and (iv)
upon a liquidation of the Trust (other than in connection with the distribution
of Subordinated Debt Securities to the holders of the Preferred Securities or
the redemption or repayment of all Preferred Securities), the lesser of (a) the
aggregate of the Stated Amount and all accrued and unpaid distributions on the
Preferred Securities to the date of payment, to the extent of funds of the Trust
available therefor and (b) the amount of assets of the Trust remaining available
for distribution to holders.
'Guarantee Trustee' means Chemical Bank, as guarantee trustee under the
Guarantee, or any successor thereto.
G-2
<PAGE>
'Holder' means a Unitholder or holder of a separated Purchase Contract.
'Indirect Participants' has the meaning set forth under 'Description of the
Units--Book-Entry System.'
'Indenture' means the Base Indenture as supplemented from time to time and as
supplemented by the Third Supplemental Indenture dated as of ,
1996 between the Company and the Indenture Trustee.
'Indenture Trustee' means Bankers Trust Company, as trustee under the Indenture,
or any successor thereto.
'Initial Holders' has the meaning set forth under 'United States Income
Taxation--General.'
'Initial Put Option Exercise Date' means the Business Day immediately preceding
the Purchase Date (or the related Delayed Purchase Date).
'Investment Company Event' has the meaning set forth under 'Description of the
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution; Optional Distribution.'
'Junior Stock' has the meaning set forth under 'Description of the Series F
Preferred Stock--Dividends and Distributions.'
'Liquidation Distribution' has the meaning set forth under 'Description of the
Preferred Securities-- Liquidation Distribution Upon Dissolution.'
'NASD' means the National Association of Securities Dealers, Inc.
'No Recognition Opinion' has the meaning set forth under 'Description of the
Preferred Securities-- Tax Event or Investment Company Event Redemption or
Distribution; Optional Redemption.'
'Non-U.S. Holder' has the meaning set forth under 'United States Federal Income
Taxation-- General.'
'NYSE' means the New York Stock Exchange, Inc.
'Optional Distribution' has the meaning set forth under 'Description of the
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution; Optional Redemption.'
'Outstanding Preferred Stock' has the meaning set forth under 'Description of
the Series F Preferred Stock--Voting Rights.'
'Participants' has the meaning set forth under 'Description of the
Units--Book-Entry System.'
'Parity Stock' has the meaning set forth under 'Description of the Series F
Preferred Stock--Dividends and Distributions.'
'Payment Date' means each , , and
, commencing , 1996.
'Plans' has the meaning set forth under 'ERISA Considerations.'
'Pledge Agreement' means the Pledge Agreement dated as , 1996
among the Company, the Collateral Agent and the Unit Agent, as unit agent and as
attorney-in-fact for the Holders from time to time.
'Preferred Securities' means the % Preferred Securities of the Trust, each
having a Stated Amount, representing preferred undivided beneficial interests in
the assets of the Trust.
'Property Account' has the meaning set forth under 'SI Financing Trust I.'
'Property Trustee' means Chemical Bank, as property trustee under the
Declaration, or any successor thereto that is a financial institution
unaffiliated with the Company.
G-3
<PAGE>
'Purchase Contract' means, with respect to any Unit or separated Purchase
Contract, the contract obligating the Company to sell, and the Holder of such
Unit or separated Purchase Contract to purchase, a Depositary Share at a
purchase price of $25.
'Purchase Date' means the Stated Purchase Date or an Early Purchase Date.
'Purchase Price' means the price of one Depositary Share under a Purchase
Contract and is equal to $25.
'Put Default' has the meaning set forth under 'Description of the
Units--Description of the Purchase Contracts--Payment of Purchase Price;
Delivery of Depositary Shares.'
'Put Option' has the meaning set forth under 'Description of the Preferred
Securities--Repayment at the Option of the Holder.'
'Put Option Exercise Date' means the Initial Put Option Exercise Date or the
Fifth Anniversary Put Option Exercise Date.
'Redemption Price' means, with respect to a Preferred Security, the Stated
Amount plus any accrued and unpaid distributions thereon to the date of
redemption (subject to the rights of holders of record on the relevant record
date to receive distributions due on a Payment Date).
'Redemption Tax Opinion' has the meaning set forth under 'Description of the
Preferred Securities-- Tax Event or Investment Company Event Redemption or
Distribution; Optional Distribution.'
'Registration Statement' means the registration statement on Form S-3 of the
Company and the Trust relating to the Securities, with all amendments and
exhibits thereto.
'Regular Trustee' means any trustee under the Declaration that is an employee or
officer of the Company or an affiliate of the Company.
'Repayment Price' means, with respect to a Preferred Security, the Stated Amount
plus any accrued and unpaid distributions thereon to the date of repayment
(subject to the rights of holders of record on the relevant record date to
receive distributions due on a Payment Date).
'Rights' has the meaning specified under 'Description of the Series F Preferred
Stock--General.'
'Salomon Brothers' means Salomon Brothers Holding Company Inc and its
subsidiaries, including Salomon Brothers Inc.
'Secondary Holder' has the meaning set forth under 'United States Income
Taxation--U.S. Holders-- Secondary Holders of Units.'
'Securities Act' means the Securities Act of 1933, as amended.
'Senior Indebtedness' has the meaning set forth under 'Description of the
Subordinated Debt Securities--Subordination.'
'Senior Stock' has the meaning set forth under 'Description of the Series F
Preferred Stock--Voting Rights.'
'Series F Preferred Stock' means the % Cumulative Preferred Stock, Series F,
liquidation preference $500 per share, of the Company.
'Service' means the Internal Revenue Service.
'Sponsor' means Salomon Inc, or any successor entity in a merger, in its
capacity as sponsor of the Trust.
'Stated Amount' means the stated liquidation amount of the Preferred Securities
and is equal to $25.
'Stated Purchase Date' means , 2021.
'Subordinated Debt Put Option' has the meaning set forth under 'Description of
the Subordinated Debt Securities--Repayment at the Option of the Holder.'
G-4
<PAGE>
'Subordinated Debt Redemption Price' means, with respect to a Subordinated Debt
Security, par plus any accrued and unpaid interest, including Additional
Interest, if any, to the date of redemption.
'Subordinated Debt Repayment Price' means, with respect to a Subordinated Debt
Security, par plus any accrued and unpaid interest, including Additional
Interest, if any, to the date of repayment.
'Subordinated Debt Securities' means the % Subordinated Debt Securities due
, 2026 of the Company.
'Successor Corporation' has the meaning set forth under 'Description of the
Units--Certain Provisions of the Unit Agreement and the Pledge
Agreement--Merger, Consolidation and Sales of Assets.'
'Successor Securities' has the meaning set forth under 'Description of the
Preferred Securities-- Mergers, Consolidations or Amalgamations.'
'Super-Majority' means where consent or action under the Indenture would require
the consent or act of more than a majority of the holders affected thereby.
'Tax Counsel' means Cravath, Swaine & Moore, tax counsel to the Trust.
'Tax Event' has the meaning set forth under 'Description of the Preferred
Securities--Tax Event or Investment Company Event Redemption or Distribution;
Optional Distribution.'
'Tax Event Redemption' has the meaning set forth under 'Description of the
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution; Optional Distribution.'
'Trust' means SI Financing Trust I.
'Trust Act' means The Delaware Business Trust Act, as it may be amended from
time to time.
'Trust Indenture Act' means the Trust Indenture Act of 1939, as amended.
'Trust Securities' means the Common Securities and the Preferred Securities.
'Underwriters' means the underwriters named in the Underwriting Agreement.
'Underwriting Agreement' means the underwriting agreement dated
, 1996 between the Company and the Trust, on the one hand, and
Salomon Brothers Inc, as representative of the Underwriters named therein, on
the other hand.
'Unit' means a % Trust Preferred StockSM (TRUPSSM) Unit consisting of (i) a
Preferred Security and (ii) a Purchase Contract.
'Unit Agent' means Chemical Bank, as agent under the Unit Agreement, and any
successor thereto.
'Unit Agreement' means the Unit Agreement to be dated as of ,
1996 between the Company and the Unit Agent.
'Unitholder' means the holder of a Unit.
'U.S. Holder' has the meaning set forth under 'United States Federal Income
Taxation--General.'
G-5
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information........................ 5
Incorporation of Certain Documents by
Reference.................................. 5
Prospectus Summary........................... 6
Risk Factors................................. 12
Salomon Inc.................................. 15
Recent Developments.......................... 16
Accounting Treatment......................... 16
Use of Proceeds.............................. 16
Ratio of Earnings to Fixed Charges........... 16
SI Financing Trust I......................... 17
Description of the Units..................... 17
Description of the Preferred Securities...... 30
Description of the Guarantee................. 40
Description of the Subordinated Debt
Securities................................. 43
Effect of Obligations under the Subordinated
Debt Securities and the Guarantee.......... 51
Description of the Series F Preferred
Stock...................................... 52
Description of the Depositary Shares......... 56
United States Federal Income Taxation........ 59
ERISA Considerations......................... 64
Underwriting................................. 64
Experts...................................... 65
Legal Opinions............................... 65
Glossary of Defined Terms.................... G-1
</TABLE>
10,000,000 %
TRUST PREFERRED STOCK(SERVICE MARK)
(TRUPS(SERVICE MARK)) UNITS
consisting of
SI FINANCING TRUST I
10,000,000 %
PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY
SALOMON INC
and
SALOMON INC
10,000,000 PURCHASE CONTRACTS
EACH REQUIRING THE PURCHASE ON ,
2021 (OR EARLIER) OF ONE DEPOSITARY SHARE REPRESENTING A ONE-TWENTIETH INTEREST
IN A SHARE OF % CUMULATIVE PREFERRED STOCK, SERIES F, LIQUIDATION PREFERENCE
$500 PER SHARE, OF SALOMON INC AT A PURCHASE PRICE OF $25 PER DEPOSITARY SHARE.
- ------------------------------------------------------
SALOMON BROTHERS INC
- ------------------------------------------------------------------------
PROSPECTUS
DATED , 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Commission Registration Fee.......................................... $ 99,137.93
Accounting Fees...................................................... 30,000.00
Trustees', Unit Agent's, Collateral Agent's and Preferred Stock
Depositary's Fees and Expenses..................................... 16,000.00
Blue Sky Fees and Expenses........................................... 15,000.00
Printing and Engraving Fees.......................................... 175,000.00
Rating Agency Fees................................................... 40,000.00
NASD Fee............................................................. 29,250.00
NYSE Listing Fee..................................................... 32,650.00
Legal Fees and Expenses.............................................. 350,000.00
Miscellaneous........................................................ 0.00
-----------
Total Expenses.................................................. $787,037.93
-----------
-----------
</TABLE>
- ------------------
* All amounts are estimated except for the Commission registration fee and the
NASD fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 of the Delaware General Corporation Law
which provides for indemnification of directors and officers in certain
circumstances.
Article Fourteenth of the Company's Certificate of Incorporation provides
for indemnification of directors and officers of the Company against certain
liabilities incurred as a result of their duties as such and Article Sixteenth
of the Company's Certificate of Incorporation provides for the elimination of
the monetary liability of directors for certain actions as such. The Company's
Certificate of Incorporation, as amended, is filed as Exhibit 4(a) to the
Registration Statement on Form S-3 (No. 2-84733) filed June 29, 1983, Exhibit 3
to the Quarterly Report on Form 10-Q for the quarter ended June 30, 1986,
Exhibit 3 to the Quarterly Report on Form 10-Q for the quarter ended June 30,
1987, Exhibit 4 to the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1987, Exhibit A to Exhibit 1 to Registration Statement on Form 8-A
filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13,
1991, Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993, and
Exhibit 4(a) to Current Report on Form 8-K dated February 12, 1996.
The Company maintains insurance policies covering liabilities of directors
and officers to the extent not covered by indemnification from the Company,
subject to the conditions and exclusions of the policies, deductible provisions,
a maximum amount of coverage of $35 million and disputes with insurers about
availability of coverage.
For the undertaking with respect to indemnification, see Item 17 herein.
See the Form of Underwriting Agreement filed as Exhibit 1 for certain
indemnification provisions.
II-1
<PAGE>
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 30, 1983, Exhibit 4 to Quarterly Report
on Form 10-Q for the quarter ended September 30, 1987, Exhibit A to Exhibit 1 to Registration
Statement on Form 8-A filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13,
1991, Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993 and Exhibit 4(a) to Current
Report on Form 8-K dated February 12, 1996).
4(b) -- By-laws of the Company, as amended (incorporated by reference to Exhibit 3(b) to the Annual Report on
Form 10-K for the year ended December 31, 1995).
4(c) -- Certificate of Trust of SI Financing Trust I.**
4(d) -- Declaration of Trust of SI Financing Trust I between Salomon Inc, as Sponsor, and Nazareth A.
Festekjian, Philip U. Tremmel, Marwan A. Marshi, Chemical Bank and Chemical Bank Delaware, not in
their individual capacities but solely as Trustees.**
4(e) -- Indenture dated as of December 1, 1988 between Salomon Inc and Bankers Trust Company, as Trustee
(incorporated by reference from Exhibit 7 to the Company's Current Report on Form 8-K dated February
12, 1996).
4(f) -- First Supplemental Indenture dated as of September 7, 1990 to Indenture dated as of December 1, 1988
betweeen Salomon Inc and Bankers Trust Company, as Trustee (incorporated by reference from Exhibit
4(b) to Registration Statement No. 33-39502).
4(g) -- Second Supplemental Indenture dated as of December 14, 1993 to Indenture dated as of December 1, 1988
between Salomon Inc and Bankers Trust Company, as Trustee (incorporated by reference from Exhibit 4(m)
to Registration Statement No. 33-48199).
4(h) -- Form of Third Supplemental Indenture dated as of 1996 to Indenture dated as of December 1, 1988
between Salomon Inc and Bankers Trust Company, as Trustee.+
4(i) -- Form of Amended and Restated Declaration of Trust of SI Financing Trust I (including as an exhibit
thereto the Form of Preferred Security).+
4(j) -- Form of Subordinated Debt Security (included in exhibit 4(h).+
4(k) -- Form of Pledge Agreement between Salomon Inc, The Bank of New York, as Collateral Agent, and Chemical
Bank, as Unit Agent.+
4(l) -- Form of Unit Agreement between Salomon Inc and Chemical Bank, as Unit Agent (including as an exhibit
thereto the Form of Unit Certificate).+
4(m) -- Form of Guarantee with respect to Preferred Securities.+
4(n) -- Form of Certificate of Designations relating to the Series F Preferred Stock.+
4(o) -- Form of Certificate of Series F Preferred Stock, without par value, of the Company.+
4(p) -- Form of Deposit Agreement (including as an exhibit thereto the Form of Depositary Receipt).+
5(a) -- Opinion of Cravath, Swaine & Moore.+
5(b) -- Opinion of Morris, Nichols, Arsht & Tunnell.+
8 -- Opinion re: Tax Matters.+
12 -- Calculation of Ratios of Earnings to Fixed Charges (incorporated by reference to Exhibit 12(a) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
23(a) -- Consent of Arthur Andersen LLP.+
23(b) -- Consent of Cravath, Swaine & Moore (included in Exhibits 5(a) and 8).+
23(c) -- Consent of Morris, Nichols, Arsht & Tunnell (included in exhibit 5(b)).+
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C>
24(a) -- Powers of Attorney with respect to the Company.+
24(b) -- Powers of Attorney with respect to SI Financing Trust I (included in Exhibit 4(d)).+
25(a) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bankers Trust Company, as
Trustee under the Indenture.+
25(b) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Chemical Bank, as Property
Trustee under the Amended and Restated Declaration of Trust of SI Financing Trust I.+
25(c) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Chemical Bank, as Guarantee
Trustee under the Guarantee of Salomon Inc for the benefit of the holders of Preferred Securities of
SI Financing Trust I.+
</TABLE>
- ------------------
** Previously filed.
+ Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(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.
(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 Company's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934, as
amended, that is incorporated by reference in this registration statement shall
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 Company pursuant to the provisions described under Item 15 above,
or otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a
II-3
<PAGE>
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered hereby,
the Company will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
(6) That, for purposes of determining any liability under the Securities
Act of 1933, as amended, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(7) That, 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-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, SALOMON INC AND SI
FINANCING TRUST I EACH HEREBY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK,
STATE OF NEW YORK, ON THE 24TH DAY OF JUNE, 1996.
SI FINANCING TRUST I
BY: SALOMON INC, as Sponsor
By: /s/ ARNOLD S. OLSHIN
(Arnold S. Olshin, Secretary)
SALOMON INC
By: /s/ ARNOLD S. OLSHIN
(Arnold S. Olshin, Secretary)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES WITH SALOMON INC AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------ -------------------------------------- --------------
<S> <C> <C>
* Chief Executive Officer, Chairman and June 24, 1996
(Robert E. Denham) Director
* Chief Financial Officer June 24, 1996
(Jerome H. Bailey)
/s/ RICHARD J. CARBONE Principal Accounting Officer and June 24, 1996
(Richard J. Carbone) Controller
* Director June 24, 1996
(Dwayne O. Andreas)
* Director June 24, 1996
(Warren E. Buffett)
* Director June 24, 1996
(Claire M. Fagin)
* Director June 24, 1996
(John L. Haseltine)
* Director June 24, 1996
(Gedale B. Horowitz)
* Director June 24, 1996
(Deryck C. Maughan)
* Director June 24, 1996
(David O. Maxwell)
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
* Director June 24, 1996
(William F. May)
* Director June 24, 1996
(Charles T. Munger)
* Director June 24, 1996
(Shigeru Myojin)
* Director June 24, 1996
(Louis A. Simpson)
* Director June 24, 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)
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------------------------------------------------------------------------------------- ------------
<S> <C> <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 30, 1983, Exhibit 4 to Quarterly Report on Form 10-Q for the quarter ended
September 30, 1987, Exhibit A to Exhibit 1 to Registration Statement on Form 8-A
filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13, 1991,
Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993 and Exhibit 4(a)
to Current Report on Form 8-K dated February 12, 1996).
4(b) -- By-laws of the Company, as amended (incorporated by reference to Exhibit 3(b) to the
Annual Report on Form 10-K for the year ended December 31, 1995).
4(c) -- Certificate of Trust of SI Financing Trust I.**
4(d) -- Declaration of Trust of SI Financing Trust I between Salomon Inc, as Sponsor, and
Nazareth A. Festekjian, Philip U. Tremmel, Marwan A. Marshi, Chemical Bank and
Chemical Bank Delaware, not in their individual capacities but solely as Trustees.**
4(e) -- Indenture dated as of December 1, 1988 between Salomon Inc and Bankers Trust Company,
as Trustee (incorporated by reference from Exhibit 7 to the Company's Current Report
on Form 8-K dated February 12, 1996).
4(f) -- First Supplemental Indenture dated as of September 7, 1990 to Indenture dated as of
December 1, 1988 between Salomon Inc and Bankers Trust Company, as Trustee
(incorporated by reference from Exhibit 4(b) to Registration Statement No. 33-39502).
4(g) -- Second Supplemental Indenture dated as of December 14, 1993 to Indenture dated as of
December 1, 1988 between Salomon Inc and Bankers Trust Company, as Trustee
(incorporated by reference from Exhibit 4(m) to Registration Statement No. 33-48199).
4(h) -- Form of third Supplemental Indenture dated as of , 1996 to Indenture dated as
of December 1, 1988 between Salomon Inc and Bankers Trust Company, as Trustee.+
4(i) -- Form of Amended and Restated Declaration of Trust of SI Financing Trust I (including
as an exhibit thereto the Form of Preferred Security).+
4(j) -- Form of Subordinated Debt Security (included in exhibit 4(h)).+
4(k) -- Form of Pledge Agreement between Salomon Inc, The Bank of New York, as Collateral
Agent, and Chemical Bank, as Unit Agent.+
4(l) -- Form of Unit Agreement between Salomon Inc and Chemical Bank, as Unit Agent
(including as an exhibit thereto the Form of Unit Certificate).+
4(m) -- Form of Guarantee with respect to Preferred Securities.+
4(n) -- Form of Certificate of Designations relating to the Series F Preferred Stock.+
4(o) -- Form of Certificate of Series F Preferred Stock, without par value, of the Company.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT PAGE
NUMBER EXHIBIT -
- ------- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
4(p) -- Form of Deposit Agreement (including as an exhibit thereto the Form of Depositary Receipt).+
5(a) -- Opinion of Cravath, Swaine & Moore.+
5(b) -- Opinion of Morris, Nichols, Arsht & Tunnell.+
8 -- Opinion re: Tax Matters.
12 -- Calculation of Ratios of Earnings to Fixed Charges (incorporated by reference to
Exhibit 12(a) to the Company's Annual Report on Form 10-K for the year ended December
31, 1995).
23(a) -- Consent of Arthur Andersen LLP.+
23(b) -- Consent of Cravath, Swaine & Moore (included in Exhibits 5(a) and 8).+
23(c) -- Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5(b)).+
24(a) -- Powers of Attorney with respect to the Company.+
24(b) -- Powers of Attorney with respect to SI Financing Trust I (included in Exhibit 4(d)).+
25(a) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bankers
Trust Company, as Trustee under the Indenture.+
25(b) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Chemical
Bank, as Property Trustee under the Amended and Restated Declaration of Trust of SI
Financing Trust I.+
25(c) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Chemical
Bank, as Guarantee Trustee under the Guarantee of Salomon Inc for the benefit of the
holders of Preferred Securities of SI Financing Trust I.+
</TABLE>
- ------------------
** Previously filed.
+ Filed herewith.
II-6
<PAGE>
Exhibit 1
SALOMON INC
SI FINANCING TRUST I
(a Delaware Trust)
___________ ___% Trust Preferred StockSM (TRUPSSM) Units*
consisting of
___________ ___% Preferred Securities of SI Financing Trust I
and
___________ Purchase Contracts of Salomon Inc
Each requiring the Purchase on , 2021 (or Earlier) of
One Depositary Share Representing a One-Twentieth Interest in a
Share of
% Cumulative Preferred Stock, Series F, Liquidation
Preference $500 Per Share,
of Salomon Inc at a Purchase Price of $25 per Depositary Share
UNDERWRITING AGREEMENT
New York, New York
, 1996
Salomon Brothers Inc
As Representative of the several Underwriters
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Salomon Inc, a Delaware corporation (the "Company"),
and SI Financing Trust I, a Delaware statutory business trust
(the "Trust"), propose to sell to the underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the
"Representative") are acting as representative, % Trust Preferred
Stock (TRUPS) Units (the "Units"), each consisting of (i) a %
Preferred Security (the "Preferred Security") of the Trust,
having a stated liquidation amount of $25, and (ii) a related
purchase contract (the "Purchase Contract") requiring the
purchase on , 2021 (or earlier if accelerated) of one Depositary
- --------
* Plus an option to purchase from Salomon Inc and SI
Financing Trust I up to __________ additional Units to
cover over-allotments.
1
<PAGE>
Share (a "Depositary Share") representing a one-twentieth
interest in a share of % Cumulative Preferred Stock,
Series F, liquidation preference $500 per share (the
"Series F Preferred Stock"), of the Company at a Purchase
Price of $25 per Depositary Share (the "Underwritten
Units"). The Company and the Trust also propose to grant to the
Underwriters an option to purchase up to additional Units (the
"Option Units" and, together with the Underwritten Units, the
"Units"). In accordance with the terms of the Unit Agreement,
dated as of , 1996 (the "Unit Agreement"), between the Company
and Chemical Bank ("Chemical Bank"), as Agent and
attorney-in-fact for the holders of Units and separated Purchase
Contracts from time to time (the "Unit Agent"), the Preferred
Securities constituting a part of the Units will be pledged by
the Unit Agent, on behalf of the holders of Units, to the
Collateral Agent (as defined herein) pursuant to the Pledge
Agreement, dated as of , 1996 (the "Pledge Agreement"), among the
Company, the Unit Agent and The Bank of New York, as Collateral
Agent (the "Collateral Agent). The rights and obligations of a
holder of Units in respect of Preferred Securities, subject to
the pledge thereof, and Purchase Contracts will be evidenced by
Unit Certificates (the "Unit Certificates") to be issued pursuant
to the Unit Agreement.
The Preferred Securities will be fully and
unconditionally guaranteed by the Company with respect to
distributions and amounts payable upon liquidation, redemption or
repayment (the "Preferred Securities Guarantee") pursuant to the
Preferred Securities Guarantee Agreement, dated as of , 1996 (the
"Preferred Securities Guarantee Agreement"), executed and
delivered by the Company and Chemical Bank, as Trustee (the
"Guarantee Trustee"), for the benefit of the holders from time to
time of the Preferred Securities, and certain back-up
undertakings of the Company. The entire proceeds from the sale of
the Preferred Securities will be combined with the entire
proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities") fully and unconditionally
guaranteed by the Company with respect to distributions and
amounts payable upon liquidation, redemption or repayment (the
"Common Securities Guarantee" and, together with the Preferred
Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement, dated as of , 1996 (the "Common
Securities Guarantee Agreement" and, together with the Preferred
Securities Guarantee Agreement, the "Guarantee Agreements"),
executed and delivered by the Company for the benefit of the
holders from time to time of the Common Securities, and certain
back-up undertakings of the Company, and will be used by the
Trust to purchase the % Subordinated Debt Securities due , 2026
(the "Subordinated Debt Securities") issued by the Company. The
Preferred Securities and the Common Securities will be issued
pursuant to the amended and restated declaration of trust of
the Trust, dated as of , 1996 (the "Declaration"),
among the Company, as Sponsor, the trustees named therein (the
"Trustees") and the holders from time to time of undivided
2
<PAGE>
beneficial interests in the assets of the Trust. The
Subordinated Debt Securities will be issued pursuant
to an Indenture, dated as of December 1, 1988 (the
"Base Indenture"), between the Company and Bankers Trust
Company, as trustee (the "Indenture Trustee"), as supplemented
from time to time, and as supplemented by the Third Supplemental
Indenture, dated as of , 1996 (the "Third Supplemental Indenture"
and, together with the Base Indenture and any other supplements
thereto, the "Indenture"), between the Company and the Indenture
Trustee.
The Series F Preferred Stock will be deposited by the
Company with First Chicago Trust Company of New York, as
depositary (the "Depositary"), against delivery of Depositary
Receipts (the "Depositary Receipts") evidencing the Depositary
Shares representing the Series F Preferred Stock, to be issued by
the Depositary pursuant to the terms of a Deposit Agreement,
dated as of , 1996 (the "Deposit Agreement"), among the Company,
the Depositary and the holders from time to time of the
Depositary Receipts issued thereunder. Except where the context
otherwise requires, references to Depositary Shares herein shall
include the Depositary Receipts evidencing the Depositary Shares.
The Units, the Preferred Securities, the Preferred
Securities Guarantee and back-up undertakings, the Subordinated
Debt Securities, the Purchase Contracts, the Depositary Shares
and the Series F Preferred Stock are collectively referred to
herein as the "Securities." This Agreement, the Unit Agreement,
the Pledge Agreement, the Indenture, the Declaration, the
Guarantee Agreements, the Deposit Agreement and the Securities
are referred to collectively as the "Operative Documents."
Capitalized terms used herein without definition have the
respective meanings specified in the Final Prospectus.
Representations and Warranties. The Company and the
Trust jointly and severally represent and warrant to, and agree
with, each Underwriter as set forth below in this Section 1.
Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) The Company and the Trust meet the requirements
for use of Form S-3 under the Securities Act of 1933 (the
"Act") and have filed with the Securities and Exchange
Commission (the "Commission") a registration statement
(file number 333-02897) on such Form, including a related
preliminary prospectus, for the registration under the Act
of the offering and sale of the Securities. The Company may
have filed one or more amendments thereto, and may have
used a Preliminary Final Prospectus, each of which has
previously been furnished to the Representative. Such
registration statement, as so amended, has become
effective. The Company will next file with the Commission a
Final Prospectus in accordance with Rules 430A and
424(b)(1) or (4). As filed, such Final Prospectus shall
include all required information with respect to the
Securities and the offering thereof and,
3
<PAGE>
except to the extent the Representative shall agree in
writing to a modification, shall be in all substantive
respects in the form furnished to the Representative 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 any Preliminary Final Prospectus) as the
Company and the Trust have advised the Representative,
prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement
did or will, and when the Final Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the
Closing Date, the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the
applicable requirements of the Act, and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the respective rules thereunder; on the
Effective Date, the 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 Effective Date and on the Closing Date
the Indenture did or will comply in all material respects
with the requirements of the Trust Indenture Act and the
rules thereunder; and, on the Effective Date, the Final
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 Prospectus
(together with any supplement 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 the
Company makes no representations or warranties as to (i)
that part of the Registration Statement which shall
constitute the Statements of Eligibility (Form T-1) under
the Trust Indenture Act of Chemical Bank, as Property
Trustee under the Declaration, Chemical Bank, as Guarantee
Trustee under the Preferred Securities Guarantee and
Bankers Trust Company, as trustee under the Indenture or
(ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on
behalf of any Underwriter through the Representative
specifically for inclusion in the Registration Statement or
the Final Prospectus.
(c) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term
"Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments
4
<PAGE>
thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Final
Prospectus" shall mean any preliminary prospectus which
describes the Securities and the offering thereof and is
used prior to filing of the Final Prospectus. "Final
Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b)
after the Execution Time. The "Registration Statement"
shall mean the registration statement referred to in the
first sentence of paragraph (a) of this Section 1,
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 (as hereinafter defined), shall also mean
such registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 424," "Rule 430A" and "Regulation S-K" refer to such
rules or regulation under the Act. "Rule 430A Information"
means information with respect to the Securities and the
offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant
to Rule 430A. Any reference herein to the Registration
Statement, any Preliminary Final Prospectus or the Final
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 Effective Date of the Registration
Statement or the issue date of any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement,
any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of
the Registration Statement or the issue date of any
Preliminary Final Prospectus or the Final Prospectus, as
the case may be, deemed to be incorporated therein by
reference.
2. Purchase and Sale. (a) Subject to the terms and
conditions and in reliance upon the representations and
warranties herein set forth, the Company and the Trust jointly
and severally agree to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from
the Company and the Trust, at a price of $ per Unit, plus accrued
interest, if any, on the Units from , 1996, to the Closing Date,
the number of Units set forth opposite that Underwriter's name on
Schedule I hereto.
(b) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set
5
<PAGE>
forth, the Company and the Trust jointly and severally hereby
grant an option to the several Underwriters to purchase,
severally and not jointly, up to of the Option Units at the same
purchase price as the Underwriters shall pay for the Underwritten
Units. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Units 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 Prospectus upon written or telegraphic notice by the
Representative to the Company and the Trust setting forth the
number of the Option Units as to which the several Underwriters
are exercising the option and the settlement date. Delivery of
certificates for the Option Units, and payment therefor, shall be
made as provided in Section 3 hereof. The number of the Option
Units to be purchased by each Underwriter shall be the same
percentage of the total number of the Option Units to be
purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Units, subject to such adjustments
as the Representative in its absolute discretion shall make to
eliminate any fractional Option Units.
3. Delivery and Payment. Delivery of and payment for
the Underwritten Units and the Option Units (if the option
provided for in Section 2(b) hereof shall have been exercised on
or before the first business day prior to the Closing Date) shall
be made at 10:00 AM, New York City time, on , 1996, or such later
date (not later than , 1996) as the Representative shall
designate, which date and time may be postponed by agreement
between the Representative, on the one hand, and the Company and
the Trust, on the other hand, or as provided in Section 9 hereof
(such date and time of delivery and payment for the Units being
herein called the "Closing Date"). The Underwritten Units will be
represented by one or more definitive global securities in
book-entry form which will be registered in the name of the
Depository Trust Company or its nominee. Delivery of the Units
shall be made on the instructions of the Representative for the
respective accounts of the several Underwriters against payment
by the several Underwriters through the Representative of the
purchase price thereof to or upon the order of the Trust in
immediately available funds. Delivery of, and payment for, the
Units shall be made through the facilities of the Depository
Trust Company.
The Company and the Trust agree to have the Units
available for inspection and checking by the Representative 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 2(b) hereof is
exercised after the first business day prior to the Closing Date,
the Company will deliver (at the expense of the Company) to the
Representative at One Liberty Plaza, New York, New York, on the
date specified by the Representative (which shall be within three
business days after exercise of said option), certificates for
6
<PAGE>
the Option Units in such names and denominations as the
Representative shall have requested against payment of the
purchase price thereof to or upon the order of the Trust in
immediately available funds. If settlement for the Option Units
occurs after the Closing Date, the Company and the Trust will
deliver to the Representative on the settlement date for the
Option Units, and the obligation of the Underwriters to purchase
the Option Units shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the
Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that
the several Underwriters propose to offer the Units for sale to
the public as set forth in the Final Prospectus.
5. Agreements. The Company and the Trust agree with
the several Underwriters that:
(a) The Company and the Trust will use their best
efforts to cause the 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 Units, the Company and the Trust will not
file any amendment to the Registration Statement (including
the Final Prospectus or any Preliminary Final Prospectus)
unless the Company and the Trust have furnished the
Representative a copy for its review prior to filing and
will not file any such proposed amendment to which the
Representative reasonably objects. Subject to the foregoing
sentence, the Company and the Trust will cause the Final
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
Representative of such timely filing. The Company and the
Trust will promptly advise the Representative (i) when the
Registration Statement, if not effective at the Execution
Time, and any amendment thereto, shall have become
effective, (ii) when the Final 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 Units, any amendment to
the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission for any
amendment of the Registration Statement or supplement to
the Final Prospectus or for any additional information, (v)
of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for
that purpose and (vi) of the receipt by the Company or the
Trust of any notification with respect to the suspension of
the qualification of the Units for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose. The Company and the Trust will use their best
7
<PAGE>
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
Units is required to be delivered under the Act, any event
occurs as a result of which the Final 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 Registration
Statement or supplement the Final Prospectus to comply with
the Act or the Exchange Act or the respective rules
thereunder, the Company and the Trust will promptly notify
the Representative and prepare and file with the
Commission, subject to the second sentence of paragraph (a)
of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such
compliance.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the
Representative an earnings statement or statements of the
Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company and the Trust will furnish to the
Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter
a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many
copies of any Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representative
may reasonably request. The Company and the Trust will pay
the expenses of printing or other production of all
documents relating to the offering.
(e) The Company and the Trust will arrange for the
qualification of the Units for sale under the laws of such
jurisdictions as the Representative may designate, will
maintain such qualifications in effect so long as required
for the distribution of the Units and will pay the fee of
the National Association of Securities Dealers, Inc., in
connection with its review, if any, of the offering.
(f) The Company and the Trust will not, until the
first business day following the Closing Date, without
prior written consent of the Representative, offer, sell or
contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any securities
that are substantially similar to the Securities.
8
<PAGE>
The Company confirms as of the date hereof that it is
in compliance with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, An Act Relating to Disclosure of
Doing Business with Cuba, and the Company further agrees
that if it commences engaging in business with the
government of Cuba or with any person or affiliate located
in Cuba after the date the Registration Statement becomes
or has become effective with the Securities and Exchange
Commission or with the Florida Department of Banking and
Finance (the "Department"), whichever date is later, or if
the information, if any, reported in the Final Prospectus
concerning the Company's business with Cuba or with any
person or affiliate located in Cuba changes in any material
way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to
the Department.
6. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Units shall
be subject to the accuracy of the representations and warranties
on the part of the Company and the Trust contained herein as of
the Execution Time and the Closing Date, to the accuracy of the
statements of the Company and the Trust made in any certificates
pursuant to the provisions hereof, to the performance by the
Company and the Trust of their obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
Representative agrees in writing to a later time, the
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 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
Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Final Prospectus, and any such
supplement, shall have been filed in the manner and within
the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) The Company shall have furnished to the
Representative the opinion of Cravath, Swaine & Moore,
counsel for the Company, dated the Closing Date, to the
effect that:
(i) each of the Company and Salomon Brothers Inc
(the "Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing
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<PAGE>
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 Prospectus;
(ii) the Company's authorized equity
capitalization is as set forth in the Final
Prospectus; the Securities, the Certificate of
Designations and the provisions of the Certificate of
Incorporation relating to the Series F Preferred Stock
conform in all material respects to the descriptions
thereof contained in the Final Prospectus and the
statements in the Final Prospectus under the caption
"Effect of Obligations under the Subordinated Debt
Securities and the Guarantee," insofar as they purport
to constitute summaries of the terms of the Operative
Documents, fairly summarize the matters therein
described; if the Units are to be listed on any stock
exchange, authorization therefor has been given,
subject to official notice of issuance, evidence of
satisfactory distribution and declaration of
effectiveness by the Commission of the Form 8-A, or
the Company has filed a preliminary listing
application and all required supporting documents with
respect to the listing of the Units with such
securities exchange and such counsel has no reason to
believe that the Units will not be authorized for
listing, subject to official notice of issuance,
evidence of satisfactory distribution and declaration
of effectiveness by the Commission of the Form 8-A;
(iii) the shares of Series F Preferred Stock
have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance
with the provisions of the Unit Agreement, the
Purchase Contracts and the Pledge Agreement against
payment thereof, will be fully paid and nonassessable;
if the Series F Preferred Stock or related Depositary
Shares are to be listed on any stock exchange,
authorization therefor has been given, subject to
official notice of issuance, evidence of satisfactory
distribution and declaration of effectiveness by the
Commission of the Form 8-A, or the Company has filed a
preliminary listing application and all required
supporting documents with respect to the Series F
Preferred Stock or such Depositary Shares with any
such stock exchange and such counsel has no reason to
believe that the Series F Preferred Stock or such
Depositary Shares will not be authorized for listing,
subject to official notice of issuance, evidence of
satisfactory distribution and declaration of
effectiveness by the Commission of the Form 8-A; and
the certificates for the shares of Series F Preferred
Stock are in valid and sufficient form;
10
<PAGE>
(iv) the Unit Agreement, the Purchase Contracts
and the Pledge Agreement have been duly authorized,
executed and delivered and each constitutes a legal,
valid and binding instrument enforceable against the
Company in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar
laws affecting creditors' rights generally from time
to time in effect ("Bankruptcy") and subject, as to
enforceability, to general principles of equity,
regardless of whether such enforceability is sought in
a proceeding in equity or at law ("Equity")); when the
Units are issued in accordance with the terms of the
Unit Agreement and delivered against payment therefor,
the Units will entitle the holders thereof to the
rights specified in the Unit Agreement (subject to
Bankruptcy and Equity); and the provisions of the
Pledge Agreement, together with the transfer of the
Preferred Securities or the Eligible Collateral, as
the case may be, to the Collateral Agent pursuant to
Section 2.01 of the Pledge Agreement, are sufficient
to create, as collateral security for the performance
when due by the holders from time to time of the Units
or separated Purchase Contracts of their respective
obligations under the Purchase Contracts constituting
a part of such Units or separated Purchase Contracts,
as the case may be, a valid and perfected security
interest (as that term is defined in the Uniform
Commercial Code, as adopted and in effect in the State
of New York), in favor of the Collateral Agent, in the
right, title and interest of such holders in the
Preferred Securities constituting a part of such Units
(collectively, the "Pledged Preferred Securities") or
in the Eligible Collateral (collectively, the "Pledged
Eligible Collateral"), as the case may be;
(v) the Declaration and the Preferred Securities
Guarantee Agreement have been duly qualified under the
Trust Indenture Act;
(vi) each of the Guarantee Agreements has been
duly authorized, executed and delivered and (in the
case of the Preferred Securities Guarantee Agreement
only, assuming it is duly authorized, executed and
delivered by the Guarantee Trustee) constitutes a
legal, valid and binding instrument enforceable
against the Company in accordance with its terms
(subject to Bankruptcy and Equity);
(vii) 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 instrument enforceable against the
Company
11
<PAGE>
in accordance with its terms (subject to Bankruptcy
and Equity); and the Subordinated Debt Securities have
been duly authorized and, when executed and
authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Trust,
will constitute legal, valid and binding instruments
entitled to the benefits of the Indenture and
enforceable against the Company in accordance with
their terms;
(viii) the Deposit Agreement has been duly
authorized, executed and delivered, and constitutes a
legal, valid and binding instrument enforceable
against the Company in accordance with its terms
(subject to Bankruptcy and Equity); when the
Depositary Receipts are issued in accordance with the
provisions of the Deposit Agreement against the
deposit of validly issued, fully paid and
nonassessable shares of the Series F Preferred Stock,
such Depositary Receipts will entitle the holders
thereof to the rights specified in such Depositary
Receipts and in the Deposit Agreement (subject to
Bankruptcy and Equity);
(ix) the Trust is not required to register as
an "investment company" under the Investment Company
Act of 1940, as amended;
(x) 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 the Company or any of
its subsidiaries, of a character required to be
disclosed in the Registration Statement that is not
adequately disclosed in the Final Prospectus; and the
statements included or incorporated in the Final
Prospectus describing any legal proceedings relating
to the Company fairly summarize such matters;
(xi) the Registration Statement has become
effective under the Act; any required filing of any
Preliminary Final Prospectus and the Final 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); and, to the best knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been
instituted or threatened;
(xii) this Agreement has been duly authorized,
executed and delivered by the Company, and this
Agreement has been duly delivered by the Trust;
(xiii) other than the declaration of
effectiveness of the Form 8-A by the Commission, no
12
<PAGE>
consent, approval, authorization or order of 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 qualification of the Indenture,
Declaration and the Preferred Securities Guarantee
Agreement under the Trust Indenture Act and such as
may be required under the blue sky laws of any
jurisdiction in connection with the [purchase and
distribution] [sale] of the Securities by the
Underwriters as contemplated by this Agreement and
such other approvals as have been obtained; and a
Certificate of Designations covering the Series F
Preferred Stock has been duly executed on behalf of
the Company and filed with the Secretary of State of
the State of Delaware; and
(xiv) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated or in any Operative
Documents nor the fulfillment of the terms hereof or
any Operative Documents will conflict with, result in
a breach of, or constitute a default under the
Certificate of Incorporation or By-laws of the
Company.
In addition, such counsel shall furnish to the
Representative an opinion (A) containing such assumptions,
qualifications and limitations as shall be reasonably
acceptable to the Representative and its counsel to the
effect that (i) the Trust will be characterized as a
grantor trust for U.S. federal income tax purposes and not
as a partnership or as an association subject to tax as a
corporation; and (ii) for U.S. federal income tax purposes
the Subordinated Debt Securities will constitute
indebtedness of the Company; and (B) to the effect that the
statements made in the Final Prospectus under the captions
"United States Federal Income Taxation" and "ERISA
Considerations," insofar as they purport to describe the
material United States Federal income tax consequences of
the purchase, ownership and disposition of Units,
Subordinated Debt Securities, Preferred Securities,
Purchase Contracts, Series F Preferred Stock and Depositary
Shares, fairly summarize the matters therein described.
In rendering such opinions, such counsel may (A) state that
its opinion is limited to the laws of the State of New
York, the corporate laws of the State of Delaware and the
Federal laws of the United States and (B) rely 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 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 and as to
matters of fact, to the extent deemed proper, on
13
<PAGE>
certificates of responsible officers of the Company and
public officials. References to the Final Prospectus in
this paragraph (b) include any supplements thereto at
the Closing Date.
(c) The Company shall have furnished to the
Representative the statement of Cravath, Swaine & Moore,
counsel for the Company, dated the Closing Date, to the
effect that the Registration Statement, at the time it
became effective, and the Final Prospectus, as of the date
hereof, appeared on their face to be appropriately
responsive in all material respects to the requirements of
the Act, the Exchange Act and the Trust Indenture Act and
the applicable rules and regulations thereunder; and such
counsel has no reason to believe that the Registration
Statement, at the time the Registration Statement became
effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Final Prospectus includes an 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 in each case, except for the financial
statements and other financial and statistical information
contained therein as to which such counsel need express no
opinion.
(d) The Company shall have furnished to the
Representative the opinion of Arnold S. Olshin, Secretary of
the Company, to the effect that:
(i) to the best of the Secretary's knowledge,
there is no pending or threatened action, suit or
proceeding before any court or governmental agency,
authority or body or any arbitrator involving the
Company or any of its subsidiaries, of a character
required to be disclosed in the Registration Statement
which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or
other document of a character required to be described
in the Registration Statement or Final Prospectus, or
to be filed as an exhibit, which is not described or
filed as required; and the statements included or
incorporated in the Final Prospectus describing any
legal proceedings or material contracts or agreements
relating to the Company fairly summarize such matters;
(ii) the holders of outstanding shares of
capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the
Securities;
(iii) the Registration Statement is effective
under the Act and, to the best of the Secretary's
14
<PAGE>
knowledge, no proceedings for a stop order have been
instituted or are pending of threatened under Section
8(d) of the Act and any required filing of the Final
Prospectus pursuant to Rule 424(b) has been made in
accordance therewith;
(iv) the execution and delivery of the Unit
Agreement, Pledge Agreement, Base Indenture, Third
Supplement Indenture, Declaration, Guarantee
Agreements and Deposit Agreement did not, at the time
of such execution and delivery, and neither the
issuance and sale of the Securities nor the
consummation of any other of the transactions
contemplated in the Underwriting Agreement or in any
Operative Document nor the fulfillment of the terms
hereof or in any Operative Document will conflict
with, result in a breach of, or constitute a default
under any law or the charter or by-laws of the Company
or the terms of any indenture or other agreement or
instrument known to the Secretary and to which the
Company or any of its subsidiaries is a party or
bound, or any judgment, order or regulation known to
the Secretary to be applicable to the Company or any
of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
subsidiaries;
(v) all the outstanding shares of capital stock
of the Company and Salomon Brothers Inc have been duly
and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth
in the Final Prospectus, all outstanding shares of
capital stock of Salomon Brothers Inc and all issued
and outstanding Common Securities of the Trust are
owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected
security interest and, to the Secretary's knowledge,
after due inquiry, any other security interests,
claims, liens or encumbrances;
(vi) no holders of securities of the Company
have rights to the registration of such securities
under the Registration Statement;
(vii) the Declaration has been duly executed
and delivered by the Company and each of the Regular
Trustees;
(viii) all conditions precedent provided for in
the Unit Agreement relating to the authentication and
delivery of the Unit Certificates have been complied
with and the Company is duly entitled to the
authentication and delivery of the Unit Certificates
in accordance with the terms of the Unit Agreement;
and
15
<PAGE>
(ix) the Indenture has been duly authorized,
executed and delivered, and constitutes a legal, valid
and binding instrument enforceable against the Company
in accordance with its terms (subject to Bankruptcy
and Equity).
(e) The Representative shall have received the opinion
of Morris, Nichols, Arsht & Tunnell, counsel for the Trust,
dated the Closing Date, to the effect that:
(i) the Trust has been duly organized and is
validly existing in good standing as a business trust
under the Delaware Business Trust Act, 12 Del. C.
ss. 3801, et seq. (the "Business Trust Act");
(ii) under the Business Trust Act and the
Declaration, the Trust has the business trust power
and authority to (A) execute and deliver, and to
perform its obligations under, this Agreement, (B)
issue and perform its obligations under the Preferred
Securities and the Common Securities and (C) purchase
and hold the Subordinated Debt Securities;
(iii) the Preferred Securities have been duly
authorized by the Declaration and, when issued in
accordance with the Declaration and paid for and
delivered in accordance with this Agreement, will
represent, subject to the qualifications set forth in
subparagraph (v), fully paid and nonassessable
beneficial interests in the assets of the Trust and
will entitle the holders thereof to the benefits of
the Declaration (subject to Bankruptcy and Equity);
(iv) the Common Securities have been duly
authorized by the Declaration and, when issued in
accordance with the Declaration, will represent,
subject to the qualifications set forth in
subparagraph (v), fully paid and nonassessable
beneficial interests in the assets of the Trust;
(v) the holders of the Preferred Securities and
the Common Securities will be entitled to the same
limitation of personal liability extended to
stockholders of private corporations for profit
organized under the General Corporation Law of the
State of Delaware. Such counsel may note that the
holders of the Preferred Securities and the holders of
the Common Securities may be obligated to make
payments as set forth in the Declaration and that the
holders of Common Securities are liable for all of the
debts and obligations of the Trust to the extent
specified in Section 10.1(b) of the Declaration;
(vi) under the Business Trust Act and the
16
<PAGE>
Declaration, the issuance of the Preferred Securities
and the Common Securities is not subject to preemptive
rights;
(vii) the issuance, sale and delivery by the
Trust of the Preferred Securities and of the Common
Securities, the execution and delivery by the Trust of
this Agreement, the purchase by the Trust of the
Subordinated Debt Securities and the performance by
the Trust of its obligations thereunder and hereunder
does not (a) result in any violation of the
Declaration or any Delaware law (statutory or
decisional) or any order, rule or regulation of any
Delaware governmental agency or body having
jurisdiction over the Trust or any of its properties
or assets, (b) require the approval of any Delaware
governmental agency or body, or (c) to such counsel's
knowledge, without independent investigation, conflict
with or result in a breach or violation of any of the
provisions of, or constitute a default under any
contract, indenture, mortgage, loan agreement, deed of
trust, note, lease or other instrument to which the
Trust is a party or to which any of its property or
assets is subject (which contracts, indentures,
mortgages, loan agreements, deeds of trust, notes,
leases or other instruments shall be identified for
such counsel by the Trust);
(viii) this Agreement has been duly authorized
and executed by the Trust; and
(ix) the Declaration has been duly authorized by
the Company and each of the Regular Trustees and
(assuming due execution and delivery by the Company and
each of the Regular Trustees) and constitutes a legal,
valid and binding instrument enforceable against the
Company and each of the Regular Trustees in accordance
with its terms (subject to Bankruptcy and Equity).
(f) The Representative shall have received the opinion
of Pryor, Cashman, Sherman & Flynn, counsel for Chemical
Bank, dated the Closing Date, to the effect that:
(i) Chemical Bank is duly incorporated and is
validly existing in good standing as a banking
corporation with trust powers under the laws of the
State of New York with all necessary power and
authority to execute, deliver and perform its
obligations under the Unit Agreement, the Pledge
Agreement, the Declaration and the Preferred
Securities Guarantee Agreement;
(ii) the execution, delivery and performance
by Chemical Bank of the Unit Agreement, the Pledge
Agreement, the Declaration and the Preferred Securities
17
<PAGE>
Guarantee Agreement have been duly authorized by all
necessary corporate action on the part of Chemical
Bank and each of the Unit Agreement, the Pledge
Agreement, the Declaration and the Preferred
Securities Guarantee Agreement has been duly executed
and delivered by Chemical Bank, and constitutes the
legal, valid and binding obligation of Chemical Bank,
enforceable against Chemical Bank in accordance with
its terms (subject to Bankruptcy and Equity);
(iii) the execution, delivery and performance of
the Unit Agreement, the Pledge Agreement, the
Declaration and the Preferred Securities Guarantee
Agreement by Chemical Bank does not conflict with or
constitute a breach of the charter or by-laws of
Chemical Bank; and
(iv) no consent, approval or authorization of,
or registration with or notice to, any governmental
authority or agency of the State of New York or the
United States of America governing the banking or
trust powers of Chemical Bank is required for the
execution, delivery or performance by Chemical Bank of
the Unit Agreement, the Pledge Agreement, the
Declaration or the Preferred Securities Guarantee
Agreement.
(g) The Representative shall have received the opinion
of Pryor, Cashman, Sherman & Flynn, counsel for Chemical
Bank Delaware, the initial Delaware Trustee of the Trust
(the "Delaware Trustee"), to the effect that:
(i) The Delaware Trustee is duly incorporated
and is validly existing in good standing as a banking
corporation with trust powers under the laws of the
State of Delaware with all necessary power and
authority to execute, deliver and perform its
obligations under the Declaration;
(ii) the execution, delivery and performance by
the Delaware Trustee of the Declaration have been duly
authorized by all necessary corporate action on the
part of the Delaware Trustee and the Declaration has
been duly executed and delivered by the Delaware
Trustee, and constitutes the legal, valid and binding
obligation of the Delaware Trustee, enforceable
against the Delaware Trustee in accordance with its
terms (subject to Bankruptcy and Equity);
(iii) the execution, delivery and performance of
the Declaration by the Delaware Trustee does not
conflict with or constitute a breach of the charter or
by-laws of Delaware Trustee; and
(iv) no consent, approval or authorization
18
<PAGE>
of, or registration with or notice to, any
governmental authority or agency of the State of
Delaware or the United States of America governing the
banking or trust powers of the Delaware Trustee is
required for the execution, delivery or performance by
the Delaware Trustee of the Declaration.
(h) The Representative shall have received the opinion
of counsel for the Depositary, dated the Closing Date, to
the effect that:
(i) the Deposit Agreement has been duly
authorized, executed and delivered by the Depositary
and constitutes a legal, valid and binding instrument,
enforceable against the Depositary in accordance with
its terms (subject to Bankruptcy and Equity); and
when Depositary Receipts are issued in accordance
with the provisions of the Deposit Agreement against
the deposit of validly issued, fully paid and
nonassessable shares of Series F Preferred Stock, such
Depositary Receipts will entitle the holders thereof
to the rights specified in such Depositary Receipts
and in the Deposit Agreement (subject to Bankruptcy
and Equity).
In rendering such opinion, such counsel may rely as to
matters of fact, to the extent it deems proper and
specifies in such opinion, on certificates of responsible
officers of the Depositary and public officials.
(i) The Representative shall have received from
Cleary, Gottlieb, Steen & Hamilton, counsel for the
Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the
Securities, the Unit Agreement, the Pledge Agreement, the
Declaration, the Guarantee Agreements, the Indenture, the
Deposit Agreement, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other
related matters as the Representative may reasonably
require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(j) The Company shall have furnished to the
Representative a certificate of the Company, signed by the
Senior Vice President and the Controller of the Company,
dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
19
<PAGE>
material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the
Company 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 Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent
financial statements included in the Final Prospectus
(exclusive of any supplement thereto), there has been
no material adverse change in the condition (financial
or other), earnings, business or properties of the
Company 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
Prospectus (exclusive of any supplement thereto).
(k) At the Execution Time, Arthur Andersen LLP shall
have furnished to the Representative a letter or letters
(which may refer to letters previously delivered to the
Representative), dated as of the Execution Time, in form
and substance satisfactory to the Representative,
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 financial statement schedules and pro
forma financial statements, if any, included or
incorporated in the Registration Statement and the
Final Prospectus and reported on by them comply in
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 financial statements made available by the
Company 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, if any, included or incorporated in
the Registration Statement and the Final 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
20
<PAGE>
the meetings of the stockholders, directors and
executive and audit committees of the Company and the
Subsidiary; and inquiries of certain officials of the
Company who have responsibility for financial and
accounting matters of the Company 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 Prospectus, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration
Statement and the Final Prospectus do not comply
in 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; or 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 Registration Statement and
the Final Prospectus;
(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 Registration
Statement and the Final Prospectus, there were
any material changes, at a specified date not
more than five business days prior to the date of
the letter, in the consolidated long-term debt or
capital stock of the Company and its subsidiaries
or decreases in the stockholders' equity of the
Company and its subsidiaries as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statement and the Final Prospectus,
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
the Company as to the significance thereof unless
said explanation is not deemed necessary by the
Representative; and
(3) the amounts included in any unaudited
"capsule" information included or incorporated in
the Registration Statement and the Final
Prospectus do not agree with the amounts set
forth in the unaudited financial statements for
the same periods or were not determined on a
basis substantially consistent with that of the
21
<PAGE>
corresponding amounts in the audited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus;
(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 the
Company and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including
the information included or incorporated in Items 1,
2, 6, 7 and 11 of the Company's Annual Report on Form
10-K, incorporated in the Registration Statement and
the Final Prospectus, and the information included in
the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or
incorporated in the Company's Quarterly Reports on
Form 10-Q, incorporated in the Registration Statement
and the Final Prospectus, agrees with the accounting
records of the Company and its subsidiaries, excluding
any questions of legal interpretation; and
(iv) if unaudited pro forma financial statements
are included or incorporated in the Registration
Statement and the Final Prospectus, on the basis of a
reading of the unaudited pro forma financial
statements included or incorporated in the
Registration Statement and the Final Prospectus (the
"pro forma financial statements"), carrying out
certain specified procedures, inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro
forma financial statements, nothing came to their
attention which caused them to believe that the pro
forma financial statements do not comply in form in
all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly
applied to the historical amounts in the compilation
of such statements.
References to the Final Prospectus in this paragraph
(i) include any supplement thereto to the date of the
letter.
In addition, at the Closing Date, Arthur Andersen LLP
shall have furnished to the Representative a letter or
letters, dated as of the Closing Date, in form and
substance satisfactory to the Representative, to the effect
set forth above.
22
<PAGE>
(l) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof)
and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in
paragraph (l) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting
the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the judgment of the
Representative, 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
Registration Statement (exclusive of any amendment thereof)
and the Final Prospectus (exclusive of any supplement
thereto).
(m) Subsequent to the Execution Time, there shall not
have been any decrease in the ratings of any of the
Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate
the direction of the possible change.
(n) Prior to the Closing Date, the Company shall have
furnished to the Representative such further information,
certificates and documents as the Representative may
reasonably request.
(o) The Units to be delivered at the Closing Date and
the Depositary Shares to be issued pursuant to the Unit
Agreement shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange.
(p) At the Closing Date, each of the Unit Agreement,
the Pledge Agreement, the Declaration, the Third
Supplemental Indenture, the Guarantee Agreements and the
Depositary Agreement shall have been duly authorized,
executed and delivered by each party thereto, and copies
thereof shall have been delivered to the Representative.
If any of the conditions specified in this Section 6
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 Representative and counsel for the
Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior
23
<PAGE>
to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Company and the Trust in
writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section
6 shall be delivered at the offices of Cleary, Gottlieb, Steen &
Hamilton, One Liberty Plaza, New York, New York on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the
sale of the Units provided for herein is not consummated because
any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or the Trust to
perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for
all 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 Units.
8. Indemnification and Contribution. (a) The Company
and the Trust agree jointly and severally to indemnify and hold
harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any
Underwriter 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 the registration statement for the registration of
the Securities as originally filed or in any amendment thereof,
or in any Preliminary Final Prospectus or the Final Prospectus,
or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
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 the Company
and the Trust will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in
reliance upon and in conformity with written information
furnished to the Company and the Trust by or on behalf of any
Underwriter through the Representative specifically for inclusion
therein. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.
24
<PAGE>
(b) The Company agrees to indemnify the Trust against
all loss, liability, claim, damage and expense whatsoever, as due
from the Trust under Section 8(a) hereunder.
(c) Each Underwriter severally agrees to indemnify and
hold harmless the Company and the Trust, each of their directors
or trustees, each of their officers who signs the Registration
Statement, and each person who controls the Company or the Trust
within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company and the
Trust to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company
and the Trust by or on behalf of such Underwriter through the
Representative specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may
otherwise have. The Company and the Trust acknowledge that the
statements set forth in the second and third sentences of the
final paragraph of the cover page and the third and final
paragraphs under the heading "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus, and the
Representative confirms that such statements are correct.
(d) Promptly after receipt by an indemnified party
under this Section 8 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 8,
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 liability under paragraph (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 paragraph (a), (b) or (c)
above. The indemnifying party shall be entitled to appoint
counsel of the 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
25
<PAGE>
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 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 8 is unavailable to or
insufficient to hold harmless any indemnified party for any
reason, the Company, the Trust 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 the Company, the Trust and one
or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the
Company and the Trust and by the Underwriters from the offering
of the Units; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Units) be
responsible for any amount in excess of the underwriting discount
or commission applicable to the Units purchased by such
Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company, the Trust and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Trust
and of the Underwriters in connection with the statement or
omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the
Company and the Trust shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal
to the total underwriting discounts and commissions, in each case
as set forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by
the Company, the Trust or the Underwriters. The Company, the
26
<PAGE>
Trust 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 8, 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 an Underwriter shall
have the same rights to contribution as such Underwriter, and
each person who controls the Company or the Trust within the
meaning of either the Act or the Exchange Act, each officer of
the Company who shall have signed the Registration Statement and
each director of the Company and each trustee of the Trust shall
have the same rights to contribution as the Company and the
Trust, subject in each case to applicable terms and conditions of
this paragraph (e).
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Units
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 Units set forth opposite their
names in Schedule I hereto bears to the aggregate principal
amount of Units set forth opposite the names of all the remaining
Underwriters) the Units which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate principal amount of Units
which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal
amount of Units 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 Units, and if
such nondefaulting Underwriters do not purchase all the Units,
this Agreement will terminate without liability to any
nondefaulting Underwriter, the Company or the Trust. In the event
of a default by any Underwriter as set forth in this Section 9,
the Closing Date shall be postponed for such period, not
exceeding seven days, as the Representative shall determine in
order that the required changes in the Registration Statement and
the Final 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
the Company and the Trust and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by
27
<PAGE>
notice given to the Company and the Trust prior to delivery of
and payment for the Units, if prior to such time (i) trading in
the Company's Common Stock shall have been suspended by the
Commission or trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or
New York State authorities or (iii) 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 is such as to make it,
in the judgment of the Representative, impracticable or
inadvisable to proceed with the offering or delivery of the Units
as contemplated by the Final Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities
and other statements of the Company and the Trust or their
respective officers or trustees 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 any Underwriter or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Units. The
provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representative, will be mailed, delivered or telegraphed and
confirmed to at Seven World Trade Center, New York, New York
10048, attention of the Legal Department; if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at
Seven World Trade Center, New York, New York 10048, attention of
the Secretary; or, if sent to the Trust, will be mailed,
delivered, telegraphed and confirmed to it at c/o Salomon Inc,
Seven World Trade Center, New York, New York 10048, attention of
[ ].
12. 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 8 hereof, and no other
person will have any right or obligation hereunder.
14. Applicable Law. THIS AGREEMENT WILL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.
28
<PAGE>
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 the Company,
the Trust and the several Underwriters.
Very truly yours,
SALOMON INC
By:_____________________________
Name:
Title:
SI FINANCING TRUST I
By:_____________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of
the date first above written.
Salomon Brothers Inc
By:__________________________
Name:
Title:
For itself and the other several Underwriters named in Schedule I
to the foregoing Agreement.
29
<PAGE>
SCHEDULE I
Amount of
Underwritten
Units
Underwriters To Be Purchased
Salomon Brothers Inc......................... $
Total............... $
==============
30
<PAGE>
Exhibit 4(h)
- -----------------------------------------------------------------
SALOMON INC
TO
BANKERS TRUST COMPANY
Trustee
----------
THIRD SUPPLEMENTAL INDENTURE
Dated as of , 1996
----------
% Subordinated Debt Securities
Due , 2026
- -----------------------------------------------------------------
<PAGE>
This THIRD SUPPLEMENTAL INDENTURE (the "Third
Supplemental Indenture"), is made and entered into as of
, 1996, between Salomon Inc, a Delaware corporation
(the "Company"), and Bankers Trust Company, a New York banking
corporation (the "Trustee"), as Trustee under the Indenture dated
as of December 1, 1988, as supplemented as of September 7, 1990
and December 14, 1993, between the Company and the Trustee (as
supplemented to the date hereof, the "Indenture").
WHEREAS, the Company executed and delivered the
Indenture to the Trustee to provide for the future issuance of
the Company's unsecured subordinated debt securities to be issued
from time to time in one or more series as might be determined by
the Company, in an unlimited aggregate principal amount which may
be authenticated and delivered as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the
Company desires to provide for the establishment of a new series
of its debt securities to be known as its % Subordinated Debt
Securities due , 2026 (the "Subordinated Debt Securities"), the
form and substance of such Subordinated Debt Securities and the
terms, provisions and conditions thereof to be set forth as
provided in the Indenture and this Third Supplemental Indenture;
WHEREAS, SI Financing Trust I, a Delaware statutory
business trust (the "Trust"), has offered to the public $
aggregate liquidation amount of its % Trust Preferred Securities
(the "Preferred Securities") and has issued to the Company, as
sponsor, its % Trust Common Securities (the "Common Securities,"
and together with the Preferred Securities, the "Trust
Securities"), representing undivided beneficial interests in the
assets of the Trust and proposes to invest the proceeds from such
offering in $ aggregate principal amount of the Subordinated Debt
Securities; and
WHEREAS, the Company has requested that the Trustee
execute and deliver this Third Supplemental Indenture, and all
requirements necessary to make this Third Supplemental Indenture
a valid instrument, in accordance with its terms, and to make the
Subordinated Debt Securities, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations
of the Company, have been performed, and the execution and
delivery of this Third Supplemental Indenture have been duly
authorized in all respects:
NOW THEREFORE, in consideration of the purchase and
acceptance of the Subordinated Debt Securities by the Holders
thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Subordinated Debt
Securities and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE I
<PAGE>
DEFINITIONS
SECTION 1.1 Definition of Terms.
Unless otherwise specified herein:
(a) a term defined in the Indenture has the same
meaning when used in this Third Supplemental Indenture;
(b) a term defined anywhere in this Third Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a
Section or Article of this Third Supplemental Indenture;
(e) headings are for convenience of reference only and
do not affect interpretation;
(f) the following terms have the meanings given to
them in the Declaration: (i) Business Day; (ii) Clearing Agency;
(iii) Common Security Certificate; (iv) Common Securities
Guarantee; (v) Delaware Trustee; (vi) Dissolution Tax Opinion;
(vii) Fifth Anniversary Put Option Exercise Date; (viii) Initial
Put Option Exercise Date; (ix) No Recognition Opinion; (x)
Optional Distribution; (xi) Preferred Securities Guarantee; (xii)
Preferred Security Certificate; (xiii) Property Trustee; (xiv)
Put Option Exercise Date; (xv) Redemption Tax Opinion; (xvi)
Regular Trustee; (xvii) Special Event; (xviii) Tax Event; and
(xix ) Underwriting Agreement;
(g) the following terms have the meaning given to them
in the Unit Agreement: (i) Cash Settlement; (ii) Collateral
Agent; (iii) Collateral Settlement; (iv) Delayed Purchase Date;
(v) Early Purchase Date; (vi) Purchase Contract; (vii) Purchase
Date; (viii) Put Default; and (ix) Stated Purchase Date; and
(h) the following terms have the meanings given to
them in this Section 1.1(h):
"Additional Interest" has the meaning set forth in
Section 2.5(c).
"Coupon Rate" has the meaning set forth in Section
2.5(a).
"Declaration" means the Amended and Restated
Declaration of Trust of the Trust, dated as of the date hereof,
among the Company, as sponsor, the trustees named therein and the
holders from time to time of undivided beneficial interests in
the assets of the Trust.
"Dissolution Event" means that as a result of the
occurrence and continuation of a Special Event or the election by
the Company to make an Optional Distribution, the Trust is to be
dissolved in accordance with the Declaration and the Subordinated
Debt Securities held by the Trustee are to be distributed to the
2
<PAGE>
holders of the Trust Securities issued by the Trust pro rata in
accordance with the Declaration.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time or any successor legislation.
"Maturity Date" means the date on which the
Subordinated Debt Securities mature and on which the principal
shall be due and payable together with all accrued and unpaid
interest thereon.
"Ministerial Action" has the meaning set forth in
Section 3.1.
"90 Day Period" has the meaning set forth in Section
3.1.
"Non-Book-Entry Preferred Securities" has the meaning
set forth in Section 2.4(a).
"Payment Date" has the meaning set forth in Section
2.5(a) and shall be deemed to be an "Interest Payment Date" for
all purposes under the Indenture.
"Subordinated Debt Put Option" has the meaning set
forth in Section 4.1.
"Subordinated Debt Redemption Price" has the meaning
set forth in Section 3.2.
"Subordinated Debt Repayment Price" has the meaning set
forth in Section 4.1.
"Unit Agreement" means the Unit Agreement, dated as of
, 1996, among the Company, the Trust and Chemical Bank,
a New York banking corporation, as Agent.
"Units" means the % Trust Preferred StockSM (TRUPS SM)
Units, each consisting of a Preferred Security and a related
contract requiring the purchase of one Depositary Share
representing a one-twentieth interest in a share of % Cumulative
Preferred Stock, Series F, liquidation preference $500 per share,
of the Company.
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE SUBORDINATED DEBT SECURITIES
SECTION 2.1 Designation and Principal Amount.
There is hereby authorized a series of debt securities
designated the " % Subordinated Debt Securities due
, 2026", in an aggregate principal amount equal to the
sum of the aggregate stated liquidation amount of the Preferred
Securities and the capital contributed by the Company to the
Trust in exchange for the Common Securities, which amount shall
3
<PAGE>
be as set forth in the Company Order for the authentication and
delivery of Subordinated Debt Securities pursuant to Section 303
of the Indenture. Subordinated Debt Securities may also be
authenticated and delivered under the Indenture upon
reregistration of, transfer of, or in exchange for, or in lieu
of, other Subordinated Debt Securities pursuant to Section 304,
305, 306, or 1106 of the Indenture. The Subordinated Debt
Securities shall be issued at any time on or after the date
hereof.
SECTION 2.2 Maturity.
The Maturity Date will be , 2026.
SECTION 2.3 Form and Payment.
Except as provided in Section 2.4, the Subordinated
Debt Securities shall be issued as Registered Securities in
certificated form without interest coupons in minimum
denominations of $25 and integral multiples thereof. Principal
and interest (including Additional Interest, if any) on the
Subordinated Debt Securities will be payable, the transfer of
such Subordinated Debt Securities will be registrable and such
Subordinated Debt Securities will be exchangeable for
Subordinated Debt Securities bearing identical terms and
provisions at the Corporate Trust Office; provided, however, that
payment of interest may be made at the option of the Company by
check mailed to the Registered Holder at such address as shall
appear in the Security Register. Notwithstanding the foregoing,
so long as the Holder of any Subordinated Debt Securities is the
Property Trustee or the Collateral Agent, the Company may act as
its own Paying Agent in accordance with Section 1204 of the
Indenture, and the payment of the principal of and interest
(including Additional Interest, if any) on such Subordinated Debt
Securities held by the Property Trustee or the Collateral Agent
will be made by wire transfer at such place and to such account
as may be designated in writing by the Property Trustee or the
Collateral Agent, as the case may be, prior to such payment.
The form of Subordinated Debt Securities attached
hereto as Exhibit A is hereby adopted, pursuant to Section
1101(6) of the Indenture, as a form of Debt Securities of a
series that consists of the Subordinated Debt Securities.
SECTION 2.4 Global Security.
(a) In connection with a Dissolution Event:
(i) the Subordinated Debt Securities in
certificated form may be presented to the Trustee by the
Property Trustee in exchange for a Global Security in an
aggregate principal amount equal to all Outstanding
Subordinated Debt Securities, to be registered in the name
of the Depositary, or its nominee, and delivered by the
Trustee to the Depositary for crediting to the accounts of
its participants pursuant to the instructions of the
Regular Trustees. The Company upon any such presentation
shall execute a Global Security in such aggregate principal
amount
4
<PAGE>
and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this Third
Supplemental Indenture. Payments on the Subordinated Debt
Securities issued as a Global Security will be made to the
Depositary; and
(ii) with respect to the Common Securities and
any Preferred Securities that are held in non-book-entry
certificated form, the Subordinated Debt Securities in
certificated form may be presented to the Trustee by the
Property Trustee and any Common Security Certificate and
any Preferred Security Certificate which represents
Preferred Securities other than Preferred Securities held
by the Clearing Agency or its nominee ("Non-Book-Entry
Preferred Securities") will be deemed to represent
beneficial interests in Subordinated Debt Securities
presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate
liquidation amount of the Common Securities or of the
Non-Book-Entry Preferred Securities, as the case may be,
until such Common Security Certificates or Preferred
Security Certificates, as the case may be, are presented to
the Security Registrar for transfer or reissuance at which
time such Common Security Certificates or Preferred
Security Certificates, as the case may be, will be
canceled, and a Subordinated Debt Security registered in
the name of the holder of the Common Security Certificate
or the Preferred Security Certificate, as the case may be,
or the transferee of such holder, with an aggregate
principal amount equal to the aggregate liquidation amount
of the Common Security Certificate or the Preferred
Security Certificate, as the case may be, that was canceled
will be executed by the Company and delivered to the
Trustee for authentication and delivery in accordance with
the Indenture and this Third Supplemental Indenture. On
issue of such Subordinated Debt Securities, Subordinated
Debt Securities with an equivalent aggregate principal
amount that were presented by the Property Trustee to the
Trustee will be deemed to have been canceled.
(b) A Global Security may be transferred, in whole but
not in part, only to another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a
nominee of such successor Depositary.
(c) Nothing in this Section 2.4 shall be deemed to
amend Section 803 of the Indenture.
SECTION 2.5 Interest.
(a) Each Subordinated Debt Security will bear interest
at the rate of % per annum (the "Coupon Rate") from the original
date of issuance until the principal thereof becomes due and
payable, and on any overdue principal and (without duplication
and to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at
the Coupon Rate, compounded quarterly, payable quarterly in
arrears on , , and
of each year (each, a "Payment Date"), commencing on
5
<PAGE>
, 1996, to the Person in whose name such Subordinated
Debt Security or any Predecessor Security is registered, at the
close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the
fifteenth day immediately preceding such Payment Date.
(b) The amount of interest payable for any period will
be computed on the basis of a 360-day year of twelve 30-day
months. Except as provided in the following sentence, the amount
of interest payable for any period shorter than a full quarterly
period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day
month. In the event that any date on which interest is payable on
the Subordinated Debt Securities is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date.
(c) If at any time while the Property Trustee is the
Holder of any Subordinated Debt Securities, the Trust or the
Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any
other taxing authority, then, in any case, the Company will pay
as additional interest ("Additional Interest") on the
Subordinated Debt Securities held by the Property Trustee, such
additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after
paying such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBT SECURITIES
SECTION 3.1 Tax Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion;
or
(b) after receiving a Dissolution Tax Opinion, the
Regular Trustees shall have been informed by tax counsel
rendering the Dissolution Tax Opinion that a No Recognition
Opinion cannot be delivered to the Trust,
then, notwithstanding Section 3.2, but subject to the provisions
of Article Thirteen of the Indenture, the Company shall have the
right upon not less than 30 nor more than 60 days' notice to the
Registered Holders of the Subordinated Debt Securities to redeem
the Subordinated Debt Securities, in whole (but not in part), for
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cash within 90 days following the occurrence of such Tax Event
(the "90 Day Period"), provided that, if at the time there is
available to the Company the opportunity to eliminate within the
90 Day Period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Trust or the holders of
the Trust Securities issued by the Trust, the Company shall
pursue such Ministerial Action in lieu of redemption; provided,
further, that the Company shall have no right to redeem the
Subordinated Debt Securities while the Trust is pursuing any
Ministerial Action pursuant to its obligations under the
Declaration.
SECTION 3.2 Optional Redemption by Company.
Subject to the provisions of Article Thirteen of the
Indenture, the Company shall have the right to redeem the
Subordinated Debt Securities, in whole (but not in part), on or
after , 2001, on any Payment Date at a redemption price equal to
100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon, including Additional Interest, if any,
to the date of such redemption (the "Subordinated Debt Redemption
Price"). Notwithstanding the foregoing, after the settlement of
the Purchase Contracts on the Purchase Date (or a related Delayed
Purchase Date), such right shall be postponed or suspended until
the fifth anniversary of such Purchase Date. Any redemption
pursuant to this paragraph will be made upon not less than 30 nor
more than 60 days' notice to the registered Holder of the
Subordinated Debt Securities, at the Subordinated Debt Redemption
Price.
SECTION 3.3. No Sinking Fund.
The Subordinated Debt Securities are not entitled to
the benefit of any sinking fund.
ARTICLE IV
REPAYMENT AT OPTION OF HOLDERS
SECTION 4.1 Optional Repayment of Subordinated Debt Securities.
Each Holder of Subordinated Debt Securities, including
the Property Trustee and the Collateral Agent, shall have the
right to require the Company to repay all or a portion (which
portion must be $25 or any integral multiple thereof) of the
Subordinated Debt Securities held by such Holder (the
"Subordinated Debt Put Option"), on the Initial Put Option
Exercise Date at a repayment price equal to 100% of the principal
amount thereof plus any accrued and unpaid interest thereon,
including Additional Interest, if any, to the date of such
repayment (the "Subordinated Debt Repayment Price"). In addition,
after the settlement of the Purchase Contracts on an Early
Purchase Date (or a related Delayed Purchase Date), Holders of
Subordinated Debt Securities that remain outstanding,
7
<PAGE>
including the Property Trustee, shall have a Subordinated Debt
Put Option with respect to the Subordinated Debt Securities held
by such Holder on the Fifth Anniversary Put Option Exercise Date
at the Subordinated Debt Repayment Price (the "Initial Put Option
Exercise Date" and the "Fifth Anniversary Put Option Date" are,
collectively, the "Put Option Exercise Date").
SECTION 4.2 Repayment Procedure for Subordinated Debt
Securities.
(a) In order for the Subordinated Debt Securities to
be repaid on the Put Option Exercise Date, the Company must
receive at the Corporate Trust Office in the City of New York,
New York, either (i) not less than 10 nor more than 30 days prior
to the Initial Put Option Exercise Date or (ii) not less than 25
nor more than 60 days prior to the Fifth Anniversary Put Option
Exercise Date, the Subordinated Debt Securities to be repaid with
the form entitled "Option to Elect Repayment" on the reverse of
or otherwise accompanying such Subordinated Debt Securities duly
completed. Any such notice received by the Company shall be
irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Subordinated
Debt Securities for repayment shall be determined by the Company,
whose determination shall be final and binding. Notwithstanding
the foregoing, so long as the Holder is the Property Trustee or
the Collateral Agent, and assuming prior notice to the Trustee,
such Subordinated Debt Securities may be received at the
Corporate Trust Office at any time prior to 11:00 a.m., New York
City time, on the Put Option Exercise Date in the form and manner
as may be designated by the Property Trustee or the Collateral
Agent and acceptable to the Trustee.
(b) The Company will comply with the provisions of
Rule 13e-4, Rule 14e-1 and any other tender offer rules under the
Exchange Act if required and will file Schedule 13E-4 or any
other schedule if required thereunder.
(c) Payment of the Subordinated Debt Repayment Price
to Holders of Subordinated Debt Securities shall be made through
the Trustee, subject to the Trustee's receipt of payment from the
Company in accordance with the terms of the Indenture.
Notwithstanding the foregoing, so long as the Holder of any
Subordinated Debt Securities presented for repayment is the
Property Trustee or the Collateral Agent, the payment of the
Subordinated Debt Repayment Price in respect of such Subordinated
Debt Securities shall be made, either through the Trustee or the
Company acting as Paying Agent, no later than 12:00 noon, New
York City time, on the Put Option Exercise Date, by check or wire
transfer, in immediately available funds, at such place and to
such account as may be designated by the Property Trustee or the
Collateral Agent, as the case may be. If the Trustee holds
immediately available funds sufficient to pay the Subordinated
Debt Repayment Price of the Subordinated Debt Securities
presented for repayment (or, if the Company is acting as Paying
Agent, the Property Trustee has received the Subordinated Debt
Repayment Price), then, immediately prior to the close of
business on the Put Option Exercise Date, such Subordinated Debt
Securities will cease to be outstanding and interest thereon will
8
<PAGE>
cease to accrue, whether or not such Subordinated Debt Securities
have been received by the Company, and all other rights of the
Holder in respect of the Subordinated Debt Securities, including
the Holder's right to require the Company to repay such
Subordinated Debt Securities, shall terminate and lapse (other
than the right to receive the Subordinated Debt Repayment Price
upon delivery of such Subordinated Debt but without interest on
such Subordinated Debt Repayment Price). Neither the Trustee nor
the Company will be required to register or cause to be
registered the transfer of any Subordinated Debt Securities for
which repayment has been elected. Except as described in
paragraph (d), if payment of Subordinated Debt Repayment Price in
respect of Subordinated Debt Securities is improperly withheld or
refused and not paid by the Company, interest on such
Subordinated Debt Securities will continue to accrue, from the
original Put Option Exercise Date to the actual date of payment,
in which case the actual payment date will be considered the Put
Option Exercise Date for purposes of calculating the Subordinated
Debt Repayment Price.
(d) If a Put Default, including a default in the
payment of the Subordinated Debt Repayment Price, shall occur and
continue for more than two Business Days following an Initial Put
Option Exercise Date, and the Purchase Date is an Early Purchase
Date, then (i) any exercise of the optional right to elect
repayment of the Subordinated Debt Securities shall be deemed
rescinded and annulled automatically and (ii) any Subordinated
Debt Securities delivered to the Company pursuant to such
election shall be returned to the Holders who effected such
delivery.
(e) The rescission or annulment of any notice of
exercise as provided in paragraph (d) will not prevent Holders of
Subordinated Debt Securities from giving a notice of exercise at
a later date.
ARTICLE V
EXPENSES AND GUARANTEE
SECTION 5.1 Payment of Expenses.
In connection with the offering, sale and issuance of
the Subordinated Debt Securities to the Property Trustee in
connection with the sale of the Trust Securities by the Trust,
the Company shall:
(a) pay for all costs and expenses relating to the
offering, sale and issuance of the Subordinated Debt Securities,
including commissions to the underwriters payable pursuant to the
Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 607 of the
Indenture;
(b) pay for all costs and expenses of the Trust
including, but not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and issuance of the
Trust Securities (including commissions to the underwriters in
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<PAGE>
connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses relating
to the operation of the Trust, including without limitation,
costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), travel expenses and costs and expenses
incurred in connection with the acquisition, financing, and
disposition of Trust assets); and
(c) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and
all liabilities, costs and expenses with respect to such taxes of
the Trust.
ARTICLE VI
COVENANTS
SECTION 6.1 Limitation on Dividends and Payments.
If (i) there shall have occurred and be continuing an
event that, with the giving of notice or the lapse of time or
both, would constitute an Event of Default or (ii) the Company
shall be in default with respect to its payment of any
obligations under the Preferred Securities Guarantee or Common
Securities Guarantee relating to the Trust, then (a) the Company
shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, except for
dividends or distributions in shares of its capital stock of the
same class on which such dividend or distribution is being paid
and conversions or exchanges of common stock of one class into
common stock of another class and (b) the Company shall not make
any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the
Company which rank pari passu with or junior to the Subordinated
Debt Securities (except by conversion into or exchange for shares
of its capital stock and except for a redemption, purchase or
other acquisition of shares of its capital stock made for the
purpose of any employee incentive plan or benefit plan of the
Company or any of its subsidiaries).
SECTION 6.2 Covenants as to the Trust.
For so long as such Trust Securities remain
outstanding, the Company will (i) maintain 100% direct or
indirect ownership of the Common Securities of the Trust;
provided, however, that any permitted successor of the Company
under the Indenture may succeed to the Company's ownership of the
Common Securities and (ii) use its reasonable efforts to cause
the Trust (a) to remain a statutory business trust, except in
connection with the distribution of Subordinated Debt Securities
to the holders of Trust Securities in liquidation of the Trust,
the redemption of all of the Trust Securities of the Trust, or
certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of the Trust, and (b) to otherwise
continue to be classified as a grantor trust for United States
10
<PAGE>
federal income tax purposes.
ARTICLE VII
ADDITIONAL RESTRICTION ON
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1 Merger, Consolidation or Sale of Assets.
In addition to the restrictions set forth in Article
Ten of the Indenture, the Company shall not consolidate with or
merge into any other corporation or person, or, directly or
indirectly, convey, transfer or lease all or substantially all of
the properties and assets of the Company on a consolidated basis
to any person, unless the Trust shall not fail to be classified
as a grantor trust for United States federal income tax purposes
as a result of the transaction and the Officers' Certificate and
Opinion of Counsel required by Section 1001 of the Indenture
shall also state that such consolidation, merger, conveyance,
transfer or lease complies with this Section 7.1 and all
applicable conditions precedent set forth herein.
ARTICLE VIII
ADDITIONAL EVENT OF DEFAULT; PUT DEFAULT
SECTION 8.1 Additional Event of Default.
"Event of Default," wherever used in the Indenture or
this Third Supplemental Indenture with respect to the
Subordinated Debt Securities, in addition to the Events of
Default set forth in Section 501 of the Indenture, shall include
the following event:
(1) the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence, except in connection with (i) the distribution of
Subordinated Debt Securities to holders of Trust Securities in
liquidation of their interests in the Trust, (ii) the redemption
or repayment of all of the outstanding Trust Securities of the
Trust or (iii) certain mergers, consolidations or amalgamations,
each as permitted by the Declaration.
SECTION 8.2 Put Default.
Notwithstanding the provisions set forth in Article
Five of the Indenture, "Event of Default," wherever used in the
Indenture or this Third Supplemental Indenture with respect to
the Subordinated Debt Securities, shall not be deemed to include
a default in the payment of the Subordinated Debt Repayment Price
on the Initial Put Option Exercise Date unless such default shall
continue for more than two Business Days following the Stated
Purchase Date.
ARTICLE IX
MISCELLANEOUS
11
<PAGE>
SECTION 9.1 Ratification of Indenture.
The Indenture, as supplemented by this Third
Supplemental Indenture, is in all respects ratified and
confirmed, and this Third Supplemental Indenture shall be deemed
part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 9.2 Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company
and not by the Trustee, and the Trustee assumes no responsibility
for the correctness thereof. The Trustee makes no representation
as to the validity or sufficiency of this Third Supplemental
Indenture.
SECTION 9.3 Governing Law.
This Third Supplemental Indenture and each
Subordinated Debt Security shall be deemed to be a contract made
and to be performed entirely in the State of New York, and for
all purposes shall be governed and construed in accordance with
the laws of said State without regard to the conflicts of laws
rules of said State.
SECTION 9.4 Separability.
In case any one or more of the provisions contained in
this Third Supplemental Indenture or in the Subordinated Debt
Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Third Supplemental Indenture or of the Subordinated Debt
Securities, but the First Supplemental Indenture and the
Subordinated Debt Securities shall be construed as if such
invalid or illegal or unenforceable provision had never been
contained herein or therein.
SECTION 9.5 Counterparts.
This Third Supplemental Indenture may be executed in
any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the
same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Third Supplemental Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and attested,
on the date or dates indicated in the acknowledgments and as of
the day and year first above written.
SALOMON INC
By_________________________
Attest:
________________________
Secretary
BANKERS TRUST COMPANY,
as Trustee
By_________________________
Attest:
________________________
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<PAGE>
STATE OF )
COUNTY OF ) ss.:
On the day of , 1996, before me personally came to me known, who,
being by me duly sworn, did depose and say that he is the of
Salomon Inc, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal
of said corporation; that the seal affixed to the said instrument
is such corporation seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
----------------------------
NOTARY PUBLIC
[seal] Commission expires
<PAGE>
STATE OF )
COUNTY OF ) ss.:
On the day of , 1996, before me personally came to me known,
who, being by me duly sworn, did depose and say that he is the
of Bankers Trust Company, one
of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation;
that the seal affixed to the said instrument is such corporation
seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name
thereto by like authority.
----------------------------
NOTARY PUBLIC
[seal] Commission expires
<PAGE>
EXHIBIT A
SPECIMEN OF SUBORDINATED DEBT SECURITY
(FORM OF FACE OF SUBORDINATED DEBT SECURITY)
[IF THE SUBORDINATED DEBT SECURITY IS TO BE A GLOBAL
SECURITY, INSERT - This Subordinated Debt Security is a Global
Security within the meaning of the Indenture hereinafter referred
to and is registered in the name of the Depositary or the nominee
of the Depositary. This Subordinated Debt Security is
exchangeable for Subordinated Debt Securities registered in the
name of a Person other than the Depositary or its nominee only in
the limited circumstances described in the Indenture, and no
transfer of this Subordinated Debt Security (other than a
transfer of this Subordinated Debt Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Subordinated Debt Security is presented by an
authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the issuer or its agent for
registration of transfer, exchange or payment, and any
Subordinated Debt Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
------------------------
No. $
[ IF THE SUBORDINATED DEBT SECURITY IS TO BE A GLOBAL SECURITY,
INSERT- CUSIP No. ]
SALOMON INC
% SUBORDINATED DEBT SECURITY DUE , 2026
Salomon Inc, a Delaware corporation (the "Company," which
term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to
pay to or registered assigns, the principal sum of Dollars on ,
2026, and to pay interest on said principal sum from , 1996 or
from the most recent interest payment date (each such date, a
"Payment Date") to which interest has been paid or duly provided
for, quarterly in arrears on , , and of each year commencing ,
1996 at the rate of % per annum until the principal hereof shall
have become due and payable, and on any overdue principal and
(without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per
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<PAGE>
annum, compounded quarterly. The amount of interest payable for
any period shall be computed on the basis of a 360-day year of
twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in
such a 30-day month. In the event that any date on which interest
is payable on this Subordinated Debt Security is not a Business
Day, then payment of interest payable on such date will be made
on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Payment
Date will, as provided in the Indenture, be paid to the Person in
whose name this Subordinated Debt Security (or one or more
Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the Regular Record Date
for such interest installment which shall be the close of
business on the fifteenth day immediately preceding such Payment
Date. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the
Registered Holders on such Regular Record Date, and may be paid
to the Person in whose name this Subordinated Debt Security (or
one or more Predecessor Securities) is registered at the close of
business on a Special Record Date to be fixed by the Trustee for
the payment of such Defaulted Interest, notice whereof shall be
given to the Registered Holders of the Subordinated Debt
Securities not less than ten days prior to such Special Record
Date, or may be paid at any time in any other lawful manner, all
as more fully provided in the Indenture. The principal of and the
interest (including Additional Interest, if any) on this
Subordinated Debt Security shall be payable at the Corporate
Trust Office in any coin or currency of the United States of
America which at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed
to the Registered Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the
Holder of this Subordinated Debt Security is the Property Trustee
or the Collateral Agent, the Company may act as its own Paying
Agent, and the payment of the principal of and interest
(including Additional Interest, if any) on this Subordinated Debt
Security will be made by wire transfer at such place and to such
account as may be designated in writing by the Property Trustee
or the Collateral Agent, as the case may be, prior to such
payment.
The indebtedness evidenced by this Subordinated Debt
Security is, to the extent provided in the Indenture, subordinate
and junior in right of payment to the prior payment in full of
all Senior Indebtedness, and this Subordinated Debt Security is
issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Subordinated Debt Security, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her
A-2
<PAGE>
behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all
such purposes. Each Holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon
said provisions.
This Subordinated Debt Security shall not be entitled to any
benefit under the Indenture hereinafter referred to, be valid or
become obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Subordinated Debt Security are
continued on the reverse side hereof and such continued
provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
Dated_____________________
SALOMON INC
By______________________
Attest:
By______________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
[By _____________________
Authenticating Agent]
By______________________
Authorized Officer
A-3
<PAGE>
(FORM OF REVERSE OF SUBORDINATED DEBT SECURITY)
This Subordinated Debt Security is one of a duly authorized
series of subordinated debentures, notes, bonds or other
evidences of indebtedness of the Company (hereinafter referred to
as the "Debt Securities"), hereinafter specified, all issued or
to be issued in one or more series under and pursuant to an
Indenture dated as of December 1, 1988 duly executed and
delivered between the Company and Bankers Trust Company, a New
York banking corporation, as Trustee (hereinafter referred to as
the "Trustee"), as supplemented from time to time and as
supplemented by the Third Supplemental Indenture dated as of
, 1996 between the Company and the Trustee (as so
supplemented and as may be further supplemented from time to
time, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders
of the Debt Securities. By the terms of the Indenture, the Debt
Securities are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in
the Indenture provided. This series of Debt Securities is
designated the % Subordinated Debt Securities due , 2026 in an
aggregate principal amount as specified in said Third
Supplemental Indenture.
The Subordinated Debt Securities are not entitled to the
benefit of any sinking fund.
Because of the occurrence and continuation of a Tax Event,
in certain circumstances this Subordinated Debt Security will
become due and payable at a redemption price equal to 100% of the
principal amount plus any accrued but unpaid interest, including
Additional Interest, if any, to the date of such redemption (the
"Subordinated Debt Redemption Price"). Except as provided in the
preceding sentence, the Subordinated Debt Securities may not be
redeemed by the Company prior to , 2001. The Company shall have
the right to redeem this Subordinated Debt Security at the option
of the Company, without premium or penalty, in whole (but not in
part), on any Payment Date on or after , 2001 (an "Optional
Redemption"), at the Subordinated Debt Redemption Price;
provided, however, that after the Purchase Date (or a related
Delayed Purchase Date), such right will be postponed or suspended
until the fifth anniversary of such date. Any redemption pursuant
to this paragraph will be made upon not less than 30 nor more
than 60 days' notice.
The Holder of this Subordinated Debt Security, including
the Property Trustee and the Collateral Agent, shall have the
right to require the Company to repay all or a portion (which
portion must be $25 or any integral multiple thereof) of this
Subordinated Debt Security (the "Subordinated Debt Put Option")
on the Initial Put Option Exercise Date at a repayment price
equal to 100% of the principal amount thereof plus any accrued
but unpaid interest, including Additional Interest, if any, to
the date of such repayment (the "Subordinated Debt Repayment
A-4
<PAGE>
Price"). In addition, after the settlement of the Purchase
Contracts on an Early Purchase Date (or a related Delayed
Purchase Date), the Holder of this Subordinated Debt Security,
including the Property Trustee, shall have a Subordinated Debt
Put Option on the Fifth Anniversary Put Option Exercise Date at
the Subordinated Debt Repayment Price. In order for the
Subordinated Debt Securities to be repaid on the Put Option
Exercise Date, the Company must receive at the Corporate Trust
Office, either (i) not less than 10 nor more than 30 days prior
to the Initial Put Option Exercise Date or (ii) not less than 25
nor more than 60 days prior to the Fifth Anniversary Put Option
Exercise Date, the Subordinated Debt Securities to be repaid with
the form entitled "Option to Elect Repayment" hereon duly
completed. Any such notice received by the Company shall be
irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Subordinated
Debt Securities for repayment shall be determined by the Company,
whose determination shall be final and binding. Notwithstanding
the foregoing, so long as the Holder is the Property Trustee or
the Collateral Agent, and assuming prior notice to the Trustee,
this Subordinated Debt Security may be received at the Corporate
Trust Office at any time prior to 11:00 a.m., New York City time,
on the Put Option Exercise Date in the form and manner as may be
designated by the Property Trustee or the Collateral Agent and
acceptable to the Trustee.
In the event of repayment of this Subordinated Debt
Security in part only, a new Subordinated Debt Security or
Subordinated Debt Securities of this series for the unredeemed
portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of
the Subordinated Debt Securities may be declared, and upon such
declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company
and the Trustee, with the consent of the Holders of not less than
a majority in aggregate principal amount of the Subordinated Debt
Securities at the time Outstanding, as defined in the Indenture,
to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or
of modifying in any manner the rights of the Holders of the
Subordinated Debt Securities; provided, however, that no such
supplemental indenture shall, without the consent of the Holders
of each Subordinated Debt Security then outstanding and so
affected: (i) extend the Stated Maturity of any Subordinated Debt
Securities, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, (ii)
change the currency of payment in which the principal of or
interest on any Subordinated Debt Security is denominated or
payable, (iii) impair the right to institute suit for the
enforcement of any payment on or with respect to any Subordinated
Debt Security or (iv) reduce the aforesaid percentage of
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<PAGE>
Subordinated Debt Securities, the Holders of which are required
to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the Holders of a majority in
aggregate principal amount of the Subordinated Debt Securities at
the time outstanding affected thereby, on behalf of all of the
Holders of the Subordinated Debt Securities, to waive any past
default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture with
respect to the Subordinated Debt Securities, and its
consequences, except a default in the payment of the principal of
or interest on any of the Subordinated Debt Securities. Any such
consent or waiver by the Registered Holder of this Subordinated
Debt Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future
Holders and owners of this Subordinated Debt Security and of any
Subordinated Debt Security issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or
waiver is made upon this Subordinated Debt Security.
No reference herein to the Indenture and no provision of
this Subordinated Debt Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this
Subordinated Debt Security at the time and place and at the rate
and in the money herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this Subordinated Debt Security is
transferable by the Registered Holder hereof on the Security
Register of the Company, upon surrender of this Subordinated Debt
Security for registration of transfer at the Corporate Trust
Office or at any other office or agency of the Company maintained
for that purpose, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the Registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
new Subordinated Debt Securities of authorized denominations and
for the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer of
this Subordinated Debt Security, the Company, the Trustee, any
Paying Agent and any Security Registrar may deem and treat the
Registered Holder hereof as the absolute owner hereof (whether or
not this Subordinated Debt Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of
receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Subordinated Debt Security, or for any
A-6
<PAGE>
claim based hereon, or otherwise in respect hereof, or based on
or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof
and as part of the consideration for the issuance hereof,
expressly waived and released.
[IF THE SUBORDINATED DEBT SECURITY IS TO BE A CERTIFICATED
SECURITY, INSERT- The Subordinated Debt Securities are issuable
only in registered form without coupons in minimum denominations
of $25 and any integral multiple thereof.] [IF THE SUBORDINATED
DEBT SECURITY IS TO BE A GLOBAL SECURITY, INSERT- This Global
Security is exchangeable for Subordinated Debt Securities in
definitive form only under certain limited circumstances set
forth in the Indenture. Subordinated Debt Securities so issued
are issuable only in registered form without coupons in minimum
denominations of $25 and any integral multiple thereof.] As
provided in the Indenture and subject to certain limitations
herein and therein set forth, Subordinated Debt Securities so
issued are exchangeable for a like aggregate principal amount of
Subordinated Debt Securities of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Subordinated Debt Security which are
defined in the Indenture shall have the meanings assigned to them
in the Indenture.
THIS SUBORDINATED DEBT SECURITY SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they
were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in UNIF GIFT MIN -_______ Custodian ____________
common ACT (Cust) (Minor)
TEN ENT - as tenants by Under Uniform Gifts
the entireties to Minors Act
JT TEN - as joint tenants
with right of
survivorship and
not as tenants
in common _______________________________
(State)
Additional abbreviations may also be used
though not in the above list.
A-7
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs
the Company to repay $ principal amount of the within
Subordinated Debt Security, pursuant to its terms, on the "Put
Option Exercise Date" first occurring after the date of receipt
of the within Subordinated Debt Security as specified below,
together with interest thereon accrued to the date or repayment,
to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the
Indenture, a new Subordinated Debt Security or Subordinated Debt
Securities representing the remaining principal amount of this
Subordinated Debt Security.
For this Option to Elect Repayment to be effective, this
Subordinated Debt Security with the Option to Elect Repayment
duly completed must be received by the Company within the
relevant time period set forth above at its Corporate Trust
Office at _____________, Attention:_____________.
Dated: Signature: ________________________
Note: The signature to this Option to Elect Repayment must
correspond with the name as written upon the face of the within
Subordinated Debt Security in every particular without alteration
or enlargement or any change whatsoever.
----------------------------------
A-8
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Please insert Social Security
or Taxpayer I.D. or other
Identifying Number of Assignee
_________________________________
_________________________________________________________________
_________________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code
of Assignee
_________________________________________________________________
the within certificates representing Subordinated Debt Securities
and all rights thereunder, hereby irrevocably constituting and
appointing
___________________________________________________ attorney to
transfer said certificates representing Subordinated Debt
Securities on the books of Salomon Inc with full power of
substitution in the premises.
Dated: _____________ ______________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
certificates representing Subordinated
Debt Securities in every particular,
without alteration or enlargement or any
change whatsoever.
<PAGE>
Exhibit 4(i)
- -----------------------------------------------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
SI FINANCING TRUST I
Dated as of , 1996
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
DECLARATION OF TRUST
ARTICLE I INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions
ARTICLE II TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Securities
SECTION 2.3 Reports by the Property Trustee
SECTION 2.4 Periodic Reports to Property Trustee
SECTION 2.5 Evidence of Compliance with Conditions
Precedent
SECTION 2.6 Events of Default; Waiver
SECTION 2.7 Event of Default; Notice
ARTICLE III ORGANIZATION
SECTION 3.1 Name
SECTION 3.2 Office
SECTION 3.3 Purpose
SECTION 3.4 Authority
SECTION 3.5 Title to Property of the Trust
SECTION 3.6 Powers and Duties of the Regular Trustees
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees
SECTION 3.8 Powers and Duties of the Property Trustee
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee
SECTION 3.10 Certain Rights of Property Trustee
SECTION 3.11 Delaware Trustee
SECTION 3.12 Execution of Documents
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities
SECTION 3.14 Duration of Trust
SECTION 3.15 Mergers
ARTICLE IV SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities
SECTION 4.2 Responsibilities of the Sponsor
ARTICLE V TRUSTEES
SECTION 5.1 Number of Trustees
SECTION 5.2 Delaware Trustee
SECTION 5.3 Property Trustee; Eligibility
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally
SECTION 5.5 Initial Trustees
SECTION 5.6 Appointment, Removal and Resignation of
<PAGE>
Trustees
SECTION 5.7 Vacancies Among Trustees
SECTION 5.8 Effect of Vacancies
SECTION 5.9 Meetings
SECTION 5.10 Delegation of Power
ARTICLE VI DISTRIBUTIONS
SECTION 6.1 Distributions
ARTICLE VII ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities
ARTICLE VIII TERMINATION OF TRUST
SECTION 8.1 Termination of Trust
ARTICLE IX TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities
SECTION 9.2 Transfer of Certificates
SECTION 9.3 Deemed Security Holders
SECTION 9.4 Book-Entry Interests
SECTION 9.5 Notices to Clearing Agency
SECTION 9.6 Appointment of Successor Clearing Agency
SECTION 9.7 Definitive Preferred Security Certificates
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1 Liability
SECTION 10.2 Exculpation
SECTION 10.3 Fiduciary Duty
SECTION 10.4 Indemnification and Compensation
SECTION 10.5 Outside Businesses
ARTICLE XI ACCOUNTING
SECTION 11.1 Fiscal Year
SECTION 11.2 Certain Accounting Matters
SECTION 11.3 Banking
SECTION 11.4 Withholding
ARTICLE XII AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE
TRUSTEE
<PAGE>
SECTION 13.1 Representations and Warranties of Property
Trustee
SECTION 13.2 Representations and Warranties of Delaware
Trustee
ARTICLE XIV MISCELLANEOUS
SECTION 14.1 Notices
SECTION 14.2 Governing Law
SECTION 14.3 Intention of the Parties
SECTION 14.4 Headings
SECTION 14.5 Successors and Assigns
SECTION 14.6 Partial Enforceability
SECTION 14.7 Counterparts
SECTION 14.8 Covenant Regarding Voting Rights
EXHIBIT A - Terms of Securities
Annex I - Form of Preferred Security
Annex II - Form of Common Security
EXHIBIT B - Specimen of Subordinated Debt Security
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 2.4
314(f) Inapplicable
315(a) 3.9(b)
315(b) 2.7
315(c) 3.9(a)
315(d) 3.9(b)
316(a) 2.6; Exhibit
A
316(c) 3.6(e)
317(a) 3.8(g)
317(b) 3.8(h)
318(a) 2.1(c)
318(b) Inapplicable
318(c) 2.1(c)
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any
of its terms or provisions.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SI FINANCING TRUST I
, 1996
AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration") dated and effective as of , 1996 by the
undersigned trustees (together with all other Persons from time
to time duly appointed and serving as trustees in accordance with
the provisions of this Declaration, the "Trustees"), Salomon Inc,
a Delaware corporation, as trust sponsor, and by the holders,
from time to time, of undivided beneficial interests in the Trust
to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the sponsor established a
trust (the "Trust") under the Business Trust Act pursuant to a
Declaration of Trust, dated as of April 25, 1996 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary
of State of Delaware on April 25, 1996, for the sole purpose of
issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Subordinated Debt Securities of the
Subordinated Debt Securities Issuer;
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the sponsor, by this
Declaration, amend and restate each and every term and provision
of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties
hereto to continue the Trust as a business trust under the
Business Trust Act and that this Declaration constitute the
governing instrument of such business trust, the Trustees declare
that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions
of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
6
<PAGE>
(b) A term defined anywhere in this Declaration has
the same meaning throughout;
(c) All references to "the Declaration" or "this
Declaration" are to this Declaration of Trust as modified,
supplemented or amended from time to time;
(d) All references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of and
Exhibits to this Declaration unless otherwise specified;
(e) A term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise
defined in this Declaration or unless the context otherwise
requires; and
(f) A reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 of the Securities Act or any successor rule
thereunder.
"Authorized Officer" of a Person means any Person that
is authorized to bind such Person.
"Book-Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Clearing Agency as
described in Section 9.4.
"Business Day" means any day that is not a Saturday,
Sunday or a day on which the New York Stock Exchange, Inc. or
banking institutions or trust companies in The City of New York
are authorized or obligated by law or executive order to be
closed.
"Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code ss. 3801 et. seq., as it may be
amended from time to time.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as
a "Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as depositary for the Preferred Securities and in
whose name or in the name of a nominee of that organization,
shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of the
Preferred Securities.
7
<PAGE>
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency.
"Closing Date" means , 1996.
"Code" means the Internal Revenue Code of 1986, as
amended, and as may be amended from time to time after the date
hereof.
"Collateral Agent" means The Bank of New York, as
collateral agent under the Pledge Agreement, or any successor
thereto.
"Commission" means the Securities and Exchange
Commission.
"Common Security" has the meaning specified in Section
7.1(a).
"Common Security Certificate" means a definitive
certificate in fully registered form representing a Common
Security substantially in the form of Annex II to Exhibit A.
"Common Securities Guarantee" means the guarantee
agreement to be dated as of , 1996 of the Sponsor in respect of
the Common Securities.
"Covered Person" means:
(a) any officer, director, shareholder, partner,
member, representative, employee or agent of:
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
"Definitive Preferred Security Certificates" has the
meaning set forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in
Section
5.2.
"Depositary" means DTC or its successor.
"Direction" by a Person means a written direction
signed:
(a) if the Person is a natural person, by that
Person;
8
<PAGE>
or
(b) in any other case, in the name of such Person by
one or more Authorized Officers of that Person.
"Direct Action" has the meaning set forth under
Section
3.8(e) herein.
"Dissolution Tax Opinion" has the meaning set forth in
Section 4(b) of the terms of the Securities as set forth in
Exhibit A.
"Distribution" has the meaning set forth in Section
6.1.
"DTC" means The Depository Trust Company, the initial
Depositary.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time or any successor statute.
"Event of Default" in respect of the Securities means
an Event of Default (as defined in the Indenture) has occurred
and is continuing in respect of the Subordinated Debt Securities.
"Fifth Anniversary Put Option Exercise Date" has the
meaning set forth in Section 5(a) of the terms of the Securities
as set forth in Exhibit A.
"Fiscal Year" has the meaning set forth in Section
11.1.
"Global Certificate" has the meaning set forth in
Section 9.4.
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Indemnified Person" means:
(a) any Trustee;
(b) any Affiliate of any Trustee;
(c) any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee; or
(d) any employee or agent of the Trust or its
Affiliates.
"Indenture" means the Indenture dated as of December
1,
9
<PAGE>
1988, as supplemented from time to time, and as supplemented by
the Third Supplemental Indenture dated as of , 1996, between the
Subordinated Debt Securities Issuer and Bankers Trust Company, a
New York banking corporation, as trustee.
"Indenture Trustee" means Bankers Trust Company, a New
York banking corporation, as trustee under the Indenture until a
successor is appointed thereunder and thereafter means such
successor trustee.
"Initial Put Option Exercise Date" has the meaning set
forth in Section 5(a) of the terms of the Securities as set forth
in Exhibit A.
"Investment Company" means an investment company as
defined in the Investment Company Act.
"Investment Company Act" means the Investment Company
Act of 1940, as amended from time to time or any successor
legislation.
"Investment Company Event" has the meaning set forth
in Section 4(b) of the terms of the Securities as set forth in
Exhibit A.
"Legal Action" has the meaning set forth in Section
3.6(g).
"Liquidation Distribution" has the meaning set forth
in Section 3 of the terms of the Securities as set forth in
Exhibit A.
"Majority in liquidation amount of the Securities"
means, except as provided in the terms of the Preferred
Securities and by the Trust Indenture Act, Holder(s) of
Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common
Securities voting separately as a class, who vote Securities of a
relevant class and the aggregate liquidation amount (including
the stated amount that would be paid on redemption, repayment,
liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of
the Securities voted by such Holders represents more than 50% of
the above stated liquidation amount of all Securities of such
class then outstanding.
"Ministerial Action" has the meaning set forth in
Section 4(b) of the terms of the Securities as set forth in
Exhibit A.
"No Recognition Opinion" has the meaning set forth in
Section 4(b) of the terms of the Securities as set forth in
10
<PAGE>
Exhibit A.
"Officer's Certificate" means, with respect to any
Person, a certificate signed by an Authorized Officer of such
Person. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that the officer signing the
Certificate has read the covenant or condition and any
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation on which the statements or opinions
contained in such Certificate are based;
(c) a statement that, in the opinion of such officer,
he or she has made such examination or investigation as is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Optional Distribution" has the meaning set forth in
Section 4(b) of the terms of the Securities set forth in Exhibit
A.
"Paying Agent" has the meaning specified in Section
3.8(h).
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Pledge Agreement" means the Pledge Agreement dated as
of , 1996 among the Company, the Collateral Agent and Chemical
Bank, as unit agent and as attorney-in-fact for the holders of
Units and Separated Purchase Contracts from time to time.
"Preferred Securities Guarantee" means the guarantee
agreement to be dated as of , 1996 of the Sponsor in respect
of the Preferred Securities.
"Preferred Security" has the meaning specified in
Section 7.1(a).
11
<PAGE>
"Preferred Security Beneficial Owner" means, with
respect to a Book-Entry Interest, a Person who is the beneficial
owner of such Book-Entry Interest, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of
Annex I to Exhibit A.
"Property Account" has the meaning set forth in
Section
3.8(c).
"Property Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Put Option" has the meaning set forth in Section 5(a)
of the terms of the Securities as set forth in Exhibit A.
"Put Option Exercise Date" has the meaning set forth
in Section 5(a) of the terms of the Securities as set forth in
Exhibit A.
"Quorum" means a majority of the Regular Trustees or
if there are only two Regular Trustees, both of them.
"Redemption Tax Opinion" has the meaning set forth in
Section 4(b) of the terms of the Securities as set forth in
Exhibit A.
"Regular Trustee" means any Trustee other than the
Property Trustee or the Delaware Trustee.
"Related Party" means, with respect to the Sponsor,
any direct or indirect wholly owned subsidiary of the Sponsor or
any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the
Property Trustee, any officer of the Property Trustee with
responsibility for the administration of this Declaration and
also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular
subject.
"Securities" means the Common Securities and the
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as
12
<PAGE>
amended from time to time or any successor statute.
"Securities Guarantees" means the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Separated Purchase Contracts" has the meaning given
to
it in the Unit Agreement.
"66-2/3% in liquidation amount of the Securities"
means, except as provided in the terms of the Preferred
Securities and by the Trust Indenture Act, Holder(s) of
Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common
Securities, voting separately as a class, who vote Securities of
a relevant class and the aggregate liquidation amount (including
the stated amount that would be paid on redemption, repayment,
liquidation or otherwise, plus accrued and unpaid Distributions,
to the date upon which the voting percentages are determined) of
the Securities voted by such Holders represents 66-2/3% of the
above-stated liquidation amount of all Securities of such class
then outstanding.
"Special Event" has the meaning set forth in Section
4(b) of the terms of the Securities set forth in Exhibit A.
"Sponsor" means Salomon Inc, a Delaware corporation or
any successor Person in a merger, in its capacity as sponsor of
the Trust.
"Subordinated Debt Securities Issuer" means Salomon
Inc, a Delaware corporation or any successor Person that assumes
the duties and obligations of the issuer of the Subordinated Debt
Securities pursuant to the Indenture.
"Subordinated Debt Securities" means the series of
Subordinated Debt Securities to be issued by the Subordinated
Debt Securities Issuer under the Indenture and to be held by the
Property Trustee pursuant to Section 3.6(c).
"Successor Delaware Trustee" has the meaning specified
in Section 5.6(c).
"Successor Entity" has the meaning specified in
Section 3.15(b)(i).
"Successor Property Trustee" means a successor Trustee
possessing the qualifications to act as Property Trustee under
Section 5.3.
"Successor Securities" has the meaning specified in
Section 3.15(b)(i)(B).
13
<PAGE>
"Super Majority" means where consent under the
Indenture would require the consent of greater than a majority of
the holders in principal amount of Subordinated Debt Securities
affected thereby.
"Tax Event" has the meaning set forth in Section 4(b)
the terms of the Securities as set forth in Exhibit A.
"10% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities by
the Trust Indenture Act, Holder(s) of Securities voting together
as a single class or, as the context may require, Holder(s) of
Preferred Securities or Common Securities, voting separately as a
class, who vote Securities of a relevant class and the
liquidation amount (including the stated amount that would be
paid on redemption, repayment, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of the Securities voted by
such Holders represents 10% of the above stated liquidation
amount of all Securities of such class then outstanding.
"Treasury Regulations" means the income tax
regulations, including temporary and proposed regulations,
promulgated under the Code by the United States Treasury, as such
regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has
signed this Declaration as a trustee, so long as such Person
shall continue in such capacity in accordance with the terms
hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time or any successor statute.
"Underwriting Agreement" means the Underwriting
Agreement for the offering and sale of the Units.
"Unit Agent" means Chemical Bank, as unit agent under
the Unit Agreement, or any successor thereto.
"Unit Agreement" means the Unit Agreement dated as of
, 1996 between the Company and the Unit Agent.
"Units" means the % Trust Preferred StockSM (TRUPSSM)
Units, each consisting of a Preferred Security and a related
contract requiring the purchase of one Depositary Share
representing a one-twentieth interest in a share of %
14
<PAGE>
Cumulative Preferred Stock, Series F, liquidation preference $500
per share, of the Sponsor.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of
the Trust Indenture Act that are required to be part of this
Declaration and shall, to the extent applicable, be governed by
such provisions;
(b) The Property Trustee shall be the only Trustee
which is a trustee for the purposes of the Trust Indenture Act;
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control; and
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in
the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide the Property Trustee (i) within
14 days after each record date for payment of Distributions, a
list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees on behalf of
the Trust shall be obligated to provide such List of Holders at
any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and
the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in the capacity as
Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of
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the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property
Trustee shall provide to the Holders of the Securities such
reports as are required by Section 313(a), (b) and (c) of the
Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor, the Subordinated Debt Securities
Issuer, the Regular Trustees and any other obligor on behalf of
the Trust shall provide to the Property Trustee such documents,
reports and information as required by Section 314 (if any) of
the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the
manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor, the Subordinated Debt Securities
Issuer and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this
Declaration which relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of
an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of
all of the Preferred Securities, waive any past Event of Default
in respect of the Preferred Securities and its consequences,
provided that if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable;
or
(ii) requires the consent or vote of all or a Super
Majority of the holders of the Subordinated Debt Securities
to be waived under the Indenture, the Event of Default
under the Declaration may only be waived by the vote of all
the Holders of the Preferred Securities or such proportion
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thereof in liquidation amount as represents the relevant
Super Majority of the aggregate principal amount of the
Subordinated Debt Securities outstanding.
Upon such waiver, any such default shall cease to exist and any
Event of Default with respect to the Preferred Securities arising
therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to
the Preferred Securities or impair any right consequent thereon.
Any waiver by the Holders of the Preferred Securities of an Event
of Default with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common
Securities of any such Event of Default with respect to the
Common Securities for all purposes of this Declaration without
any further act, vote or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of
all of the Common Securities, waive any past Event of Default
with respect to the Common Securities and its consequences,
provided that if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as
provided below, the Event of Default under the Declaration
is not waivable; or
(ii) requires the consent or vote of all or a Super
Majority of the holders of the Subordinated Debt Securities
to be waived under the Indenture, the Event of Default
under the Declaration may only be waived by the vote of all
of the Holders of the Common Securities or such proportion
thereof in liquidation amount as represents the relevant
Super Majority of the aggregate principal amount of the
Subordinated Debt Securities outstanding,
provided that, each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default
with respect to the Common Securities until all Events of Default
with respect to the Preferred Securities have been cured, waived
or otherwise eliminated and until such Events of Default have
been so cured, waived or otherwise eliminated, the Property
Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property
Trustee in accordance with the terms of the Securities. Subject
to the foregoing proviso, upon such waiver, any such default
shall cease to exist and any Event of Default with respect to the
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Common Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of any Event of Default under the
Indenture by the Property Trustee at the direction of the Holders
of the Preferred Securities constitutes a waiver of the
corresponding Event of Default under this Declaration.
SECTION 2.7 Event of Default; Notice.
(a) Within 90 days after the occurrence of a default
under the Indenture, the Property Trustee shall give to the
Holders of the Securities notice of each default under the
Indenture known to the Property Trustee, unless such default
shall have been cured or waived before the giving of such notice
(the term "default" for the purposes of this Section 2.7 being
hereby defined to be an Event of Default as defined in the
Indenture, without giving effect to any periods of grace provided
for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of
principal of or interest on any of the Subordinated Debt
Securities or in the payment of any sinking fund installment
established for the Subordinated Debt Securities, the Property
Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the
Property Trustee in good faith determines that the withholding of
such notice is in the interest of the Holders of the Securities.
Each notice given pursuant to this Section 2.7(a) shall state
that an Event of Default under the Indenture constitutes an Event
of Default with respect to the Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default under the Indenture except any default
as to which the Property Trustee shall have received written
notice or a Responsible Officer charged with the administration
of the Declaration shall have obtained written notice thereof.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "SI Financing Trust I", as such
name may be modified from time to time by the Regular Trustees
following written notice to the Property Trustee, the Delaware
Trustee and the Holders of Securities. The Trust's activities may
be conducted under the name of the Trust or any other name
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deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is
c/o Salomon Inc, Seven World Trade Center, New York, New York
10048. On ten Business Days' written notice to the Property
Trustee, the Delaware Trustee and the Holders of Securities, the
Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are
(a) to issue and sell the Securities and use the proceeds from
such sale to acquire the Subordinated Debt Securities, and (b)
except as otherwise set forth herein, to engage in only those
other activities as are necessary or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would
for United States federal income tax purposes (i) cause the Trust
to be classified as an association taxable as a corporation or a
partnership or (ii) cause each Holder of Securities not to be
treated as owning an undivided beneficial interest in the
Subordinated Debt Securities at any time the Securities are
outstanding.
SECTION 3.4 Authority.
Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee,
the Regular Trustees shall have exclusive and complete authority
to carry out the purposes of the Trust. An action taken by the
Regular Trustees in accordance with their powers shall constitute
the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of the Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Subordinated Debt Securities and the Property Account or as
otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but
shall have an undivided beneficial interest in the assets of the
Trust.
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SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power
and authority and duty to cause the Trust to engage in the
following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common
Securities, and, provided further, there shall be no interests in
the Trust other than the Securities and the issuance of
Securities shall be limited to a one-time, simultaneous issuance
of both Preferred Securities and Common Securities on the Closing
Date;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the
registration statement on Form S-3 prepared by the Sponsor
in relation to the Preferred Securities, including any
amendments thereto prepared by the Sponsor;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor as
necessary in order to qualify or register all or part of
the Preferred Securities or Units in any State in which the
Sponsor has determined to qualify or register such
Preferred Securities or Units for sale;
(iii) execute and file with the Commission a
registration statement on Form 8-A prepared by the Sponsor
relating to the registration of the Preferred Securities or
Units under Section 12 of the Exchange Act, including any
amendments thereto prepared by the Sponsor; and
(iv) execute and enter into the Underwriting Agreement
providing for the sale of the Units;
(c) to acquire the Subordinated Debt Securities with
the proceeds of the sale of the Preferred Securities and the
Common Securities; provided, however, that the Regular Trustees
shall cause legal title to the Subordinated Debt Securities to be
held of record in the name of the Property Trustee for the
benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) to give the Subordinated Debt Securities Issuer,
the Sponsor and the Property Trustee prompt written notice of the
occurrence of a Tax Event, provided that the Regular Trustees
shall consult with the Subordinated Debt Securities Issuer, the
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Sponsor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, repayments and exchanges, and to issue relevant notices
to the Holders of Preferred Securities and Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as
may
be required of the Regular Trustees pursuant to the terms of the
Securities;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant
to Section 3.8(e), the Property Trustee has the exclusive power
to bring such Legal Action;
(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and pay reasonable
compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate to the Property Trustee
required by Section 314(a)(4) of the Trust Indenture Act which
certificate may be executed by any Regular Trustee;
(k) to incur expenses which are necessary or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the
Trust in all matters necessary or incidental to the foregoing;
(n) to take all action which may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws the State of Delaware and
of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Securities
or to enable the Trust to effect the purposes for which the Trust
was created;
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(o) to take any action, not inconsistent with this
Declaration or with applicable law, which the Regular Trustees
determine in their discretion to be necessary or desirable in
carrying out the activities of the Trust as set out in this
Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust not to be characterized for
United States federal income tax purposes as other than a
grantor trust; and
(iii) cooperating with the Subordinated Debt
Securities Issuer to ensure that the Subordinated Debt
Securities will be treated as indebtedness of the
Subordinated Debt Securities Issuer for United States
federal income tax purposes, provided that such action does
not adversely affect the interests of Holders; and
(p) to take all action necessary to cause all
applicable tax returns and tax information reports that are
required to be filed with respect to the Trust to be duly
prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set
forth in this Section 3.6 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.3
and the Regular Trustees shall not take any action which is
inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees
shall have none of the powers or the authority of the Property
Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to, engage in any
activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(a) invest any proceeds received by the Trust from
holding the Subordinated Debt Securities, but shall distribute
all such proceeds to Holders of Securities pursuant to the terms
of this Declaration and of the Securities;
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(b) acquire any assets other than as expressly
provided herein;
(c) possess Trust property for other than a Trust
purpose;
(d) make any loans or incur any indebtedness other
than loans represented by the Subordinated Debt Securities;
(e) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the Securities in any
way whatsoever;
(f) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(g) (i) direct the time, method and place of
exercising any trust or power conferred upon the Indenture
Trustee with respect to the Subordinated Debt Securities, (ii)
waive any past default that is waivable under Section 513 of the
Indenture, (iii) exercise any right to rescind or annul any
declaration that the principal of all the Subordinated Debt
Securities shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the
Subordinated Debt Securities, where such consent shall be
required, unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause the
Trust to be characterized as other than a grantor trust for
United States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Subordinated Debt
Securities shall be owned by and held of record in the name of
the Property Trustee in trust for the benefit of the Holders of
the Securities. The right, title and interest of the Property
Trustee to the Subordinated Debt Securities shall vest
automatically in each Person who may hereafter be appointed as
Property Trustee as set forth in Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered;
(b) The Property Trustee shall not transfer its right,
title and interest in the Subordinated Debt Securities to the
Regular Trustees or to the Delaware Trustee (if the Property
Trustee does not also act as Delaware Trustee);
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing bank account (the "Property Account") in the name
of
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and under the exclusive control of the Property Trustee on
behalf of the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the
Subordinated Debt Securities held by the Property Trustee,
deposit such funds into the Property Account and make
payments to the Holders of the Preferred Securities and the
Common Securities from the Property Account in accordance
with Section 6.1. Funds in the Property Account shall be
held uninvested until disbursed in accordance with this
Declaration. The Property Account shall be an account which
is maintained with a banking institution either (a) the
rating on whose long term unsecured indebtedness is rated
"A" or above by a "nationally recognized statistical rating
organization," as that term is defined for purposes of Rule
436(g)(2) under the Securities Act, or (b) which has
capital and surplus of at least $100,000,000;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the repayment of the
Preferred Securities and the Common Securities to the
extent the Subordinated Debt Securities are redeemed or
mature or the Put Option is exercised; and
(iii) upon notice of distribution issued by the
Regular Trustees in accordance with the terms of the
Preferred Securities and the Common Securities, engage in
such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Subordinated
Debt Securities to Holders of Securities upon the
occurrence of certain special events (as may be defined in
the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities;
(d) the Property Trustee shall take all actions and
perform such duties as may be specifically required of the
Property Trustee pursuant to the terms of the Securities;
(e) subject to Section 3.9, the Property Trustee shall
take any Legal Action which arises out of or in connection with
an Event of Default or the Property Trustee's duties and
obligations under this Declaration or the Trust Indenture Act in
accordance with Section 3.9; provided, however, that if an Event
of Default has occurred and is continuing and such event is
attributable to the failure of the Subordinated Debt Securities
Issuer to pay interest or principal on the Subordinated Debt
Securities on the date such interest or principal is otherwise
payable (or in the case of redemption or repayment, on the
redemption or repayment date, as the case may be), then a Holder
of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or
interest on the Subordinated Debt Securities having a principal
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amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Indenture. In connection
with such Direct Action, the rights of the Holder of the Common
Securities will be subrogated to the rights of such Holder of
Preferred Securities to the extent of any payment made by the
Company to such Holder of Preferred Securities in such Direct
Action. Except as provided in the preceding sentences, the
Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the
Subordinated Debt Securities.
(f) the Property Trustee shall not resign as a
Trustee
unless either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed
and accepted that appointment in accordance with Section
5.6;
(g) the Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Subordinated Debt Securities under the Indenture and, if an Event
of Default occurs and is continuing, the Property Trustee shall,
for the benefit of Holders of the Securities, enforce its rights
as holder of the Subordinated Debt Securities, subject to the
rights of the Holders pursuant to the terms of such Securities
and to the prohibition set forth in Section 3.7(g);
(h) the Property Trustee may authorize one or more
Persons (each, a "Paying Agent") to pay Distributions, redemption
payments, repayments or liquidation payments on behalf of the
Trust with respect to the Preferred Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any Paying Agent may be removed by the Property
Trustee at any time and a successor Paying Agent or additional
Paying Agents may be appointed at any time by the Property
Trustee; and
(i) subject to this Section 3.8, the Property Trustee
shall have none of the powers or the authority of the Regular
Trustees set forth in Section 3.6;
The Property Trustee must exercise the powers set
forth in this Section 3.8 in a manner which is consistent with
the purposes and functions of the Trust set forth in Section 3.3
and the Property Trustee shall not knowingly take, nor shall any
Regular Trustee direct the Property Trustee to take any action
which is inconsistent with the purposes and functions of the
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Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any
Event of Default and after the curing or waiver of all Events of
Default that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Declaration and
in the terms of the Securities, and no implied covenants shall be
read into this Declaration against the Property Trustee. In case
an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Property Trustee shall
exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) No provision of this Declaration shall be
construed to relieve the Property Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express
provisions of this Declaration and in the terms of the
Securities, and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Declaration; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
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Officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders
of not less than a Majority in liquidation amount of the
Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under
this Declaration; and
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by a Direction or an Officers'
Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable
that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
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(iv) the Property Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof) or to
the filing of any report, statement or other communication
with the Commission;
(v) the Property Trustee may consult with counsel and
the written advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to
the Sponsor or any of its Affiliates, and may include any
of the Sponsor's employees. The Property Trustee shall have
the right at any time to seek instructions concerning the
administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Property
Trustee reasonable security or indemnity against the costs,
expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with
such request or direction, including such reasonable
advances as may be requested by the Property Trustee
provided that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee,
upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it
by this Declaration;
(vii) the Property Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys and
the Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of
the Securities and the signature of the Property Trustee or
its
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agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to
inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Property Trustee
(i) may request instructions from the Holders of the
Securities which instructions may only be given by the
Holders of the same portion in liquidation amount of the
Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be
protected in acting in accordance with such instructions;
and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under
the provisions of this Declaration except, if required by
the terms hereof, upon the Direction of the Sponsor or the
Regular Trustees, as the case may be.
(b) No provision of this Declaration shall be deemed
to impose any duty or obligation on the Property Trustee to
perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it, in any jurisdiction in
which it shall be illegal, or in which the Property Trustee shall
be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority
available to the Property Trustee shall be construed to be a
duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this
Declaration other than Section 5.2, the Delaware Trustee shall
not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the
Regular Trustees or the Property Trustee described in this
Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust
Act. In the event the Delaware Trustee shall at any time be
required to take any action or perform any duty hereunder with
respect to the
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Trust, the Delaware Trustee shall be entitled to the benefits of
Section 3.9(b)(ii), (iii) and (iv) and Section 310.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees
and except as otherwise required by the Business Trust Act, a
majority of, or if there are only two, both of the Regular
Trustees are authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority
to execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor and
the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value
or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the
provisions of Article VIII hereof, shall have existence for 35
years from the Closing Date.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except as described in Section 3.15(b) and (c);
(b) The Trust may, with the consent of a majority of
the Regular Trustees or, if there are only two Regular Trustees,
with the consent of both Regular Trustees, and without the
consent of the Holders of the Securities, the Delaware Trustee or
the Property Trustee, consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws
of any State; provided that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Preferred Securities
other securities having substantially the same terms
as
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the Preferred Securities (the "Successor Securities")
so long as the Successor Securities rank the same as
the Preferred Securities rank with respect to
Distributions and payments upon liquidation,
redemption, repayment and maturity;
(ii) the Subordinated Debt Securities Issuer expressly
acknowledges a trustee of the Successor Entity which
possesses the same powers and duties as the Property
Trustee as the Holder of the Subordinated Debt Securities;
(iii) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities
(including any Successor Securities) or Units to be
downgraded by any nationally recognized statistical rating
organization;
(iv) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution
of the Holders' interest in the new entity);
(v) such successor entity has a purpose identical to
that of the Trust;
(vi) prior to such merger, consolidation, amalgamation
or replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Preferred Securities (including any Successor
Securities) in any material respect (other than with
respect to any dilution of the Holders interest in the
new entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company; and
(C) such merger, consolidation, amalgamation or
replacement does not result in a taxable event to any
Holders of Preferred Securities or Units or otherwise
affect the United States federal income tax
consequences of any investment in the Preferred
Securities or Units; and
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(vii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Securities
Guarantee; and
(c) Notwithstanding Section 3.15(b), the Trust shall
not consolidate, amalgamate, merge with or into, or be replaced
by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it unless the Trust
shall have received an opinion of counsel to the effect that such
consolidation, amalgamation, merger or replacement would not
cause the Trust or Successor Entity for United States federal
income tax purposes to be classified as other than a grantor
trust, except with the consent of Holders of 100% in liquidation
amount of the Securities.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all the
Common Securities issued by the Trust, at the same time as the
Preferred Securities are sold, in an amount equal to 3% of the
capital of the Trust.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to
the Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take
appropriate action to qualify or register for sale all or part of
the Preferred Securities and to take any and all such acts, other
than actions which must be taken by the Trust, and advise the
Regular Trustees of actions the Trust must take, and to prepare
for execution by the Regular Trustees and filing any documents to
be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable
laws of any such States;
(c) if necessary, to prepare for filing by the Trust
with the Commission a registration statement on Form 8-A relating
to the registration of the Preferred Securities under Section 12
of the Exchange Act, including any amendments thereto; and
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(d) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Units.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially be five (5)
and:
(a) at any time before the issuance of any
Securities,
the Sponsor may, by written instrument, increase or decrease the
number of Trustees; and
(b) After the issuance of any Securities, the number
of Trustees may be increased or decreased by vote of the Holders
of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities, provided that in any case, the number of Trustees
shall be at least five (5) unless the Trustee that acts as the
Property Trustee also acts as the Delaware Trustee pursuant to
Section 5.2 in which case the number of Trustees shall be at
least three (3).
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee
(the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State
of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, provided that
if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or
Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
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authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$100,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published; and
(b) If at any time the Property Trustee shall cease to
be eligible to so act under Section 5.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set
forth in Section 5.6(c);
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Property Trustee and the Holder of
the Common Securities (as if it were the obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act; and
(d) The Preferred Securities Guarantee shall be deemed
to be specifically described in this Declaration for purposes of
clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be
either a natural person who is at least 21 years of age or a
legal entity which shall act through one or more Authorized
Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Nazareth A. Festekjian
275 Alfred Street
Englewood Cliffs, New Jersey 07632
Philip U. Tremmel
142 Williamson Avenue
Bloomfield, New Jersey 07003
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Marwan A. Marshi
[ADDRESS]
The initial Delaware Trustee shall be:
Chemical Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
The initial Property Trustee shall be:
Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Vice President - Corporate
Trustee Administration Department
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of
the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities.
(b) The Trustee that acts as Property Trustee shall
not be removed in accordance with Section 5.6(a) until a
Successor Property Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees and the
Sponsor.
(c) The Trustee that acts as Delaware Trustee shall
not be removed in accordance with this Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(d) A Trustee appointed to office shall hold office
until his or her successor shall have been appointed or until his
or her death, removal or resignation. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the
Sponsor and the Trust, which resignation shall take effect
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upon such delivery or upon such later date as is specified
therein; provided, however, that:
(i) no such resignation of the Trustee that acts as
the Property Trustee shall be effective until a Successor
Property Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor
and the resigning Property Trustee; and
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor
and the resigning Delaware Trustee.
(e) The Holders of the Common Securities shall use
their best efforts to promptly appoint a Successor Delaware
Trustee or Successor Property Trustee, as the case may be, if the
Property Trustee or the Delaware Trustee delivers an instrument
of resignation in accordance with this Section 5.6.
(f) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted
appointment as provided in this Section 5.6 within 60 days after
delivery to the Sponsor and the Trust of an instrument of
resignation, the resigning Property Trustee or Delaware Trustee
may petition any court of competent jurisdiction for appointment
of a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(g) The Sponsor shall provide notice to the Property
Trustee of any resignation or removal of a Regular Trustee.
SECTION 5.7 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and
the number of Trustees is not reduced pursuant to Section 5.1, or
if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of
such vacancy by a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with
Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or incapacity
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to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6,
the Regular Trustees in office, regardless of their number, shall
have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
Meetings of the Regular Trustees shall be held from
time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place
fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than
48 hours before such meeting. Notice of any telephonic meetings
of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting
for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular
Trustees.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 3.6 including any
registration statement or amendment thereto filed with the
Commission or making any other governmental filing; and
(b) The Regular Trustees shall have power to delegate
from time to time to such of their number or to officers of the
Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the
Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set
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forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
If and to the extent that the Subordinated Debt
Securities Issuer makes a payment of interest and/or principal on
the Subordinated Debt Securities held by the Property Trustee
(the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders in accordance
with the applicable terms of the Securities. Distributions shall
be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective
terms.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the
Trust, issue one class of preferred securities representing
undivided beneficial interests in the assets of the Trust (the
"Preferred Securities") having such terms as are set forth in
Exhibit A, as such Exhibit A may be amended from time to time in
accordance with this Declaration and incorporated herein by
reference, and one class of common securities representing
undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Exhibit A, as such Exhibit A may
be amended from time to time in accordance with this Declaration,
and incorporated herein by reference (the "Common Securities").
The Trust shall have no securities or other interests in the
assets of the Trust other than the Preferred Securities and the
Common Securities;
(b) The Certificates shall be signed on behalf of the
Trust by the Regular Trustees (or if there are more than two
Regular Trustees by any two of the Regular Trustees). Such
signatures may be the manual or facsimile signatures of the
present or any future Regular Trustee. Typographical and other
minor errors or defects in any such reproduction of any such
signature shall not affect the validity of any Certificate. In
case any Regular Trustee of the Trust who shall have signed any
of the Certificates shall cease to be such Regular Trustee before
the Certificates so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person
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who signed such Certificate had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust
by such persons who shall, at the actual date of the execution of
such Certificate, be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee. Certificates shall be
printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with
any rule or regulation of any stock exchange on which Securities
may be listed, or to conform to usage;
(c) The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the
capital of the Trust and shall not constitute a loan to the
Trust;
(d) Upon issuance of the Securities as provided in
this Declaration, the Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable; and
(e) Every Person, by virtue of having become a Holder
in accordance with the terms of this Declaration, shall be deemed
to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate upon the earliest to
occur of the following:
(i) the bankruptcy of the Holder of the Common
Securities, the Subordinated Debt Securities Issuer or the
Sponsor;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common
Securities or the Sponsor, the filing of a certificate of
cancellation with respect to the Trust or the revocation of
the charter of the Holder of the Common Securities or the
Sponsor and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial
dissolution
of the Holder of the Common Securities, the Sponsor or the
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Trust;
(iv) all of the Securities shall have been called for
redemption or presented for repayment and the amounts
necessary for redemption or repayment thereof shall have
been deposited with the Property Trustee in accordance with
the terms of the Securities;
(v) an Optional Distribution;
(vi) the occurrence and continuance of a Special Event
pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the
Subordinated Debt Securities have been distributed to the
Holders of Securities in exchange for all of the
Securities; or
(vii) the expiration of the term of the Trust on
, 2031; and
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware; and
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in
this Declaration and in the terms of the Securities. Any transfer
or purported transfer of any Security not made in accordance with
this Declaration shall be null and void;
(b) Subject to this Article IX, the Preferred
Securities shall be freely transferable; and
(c) Subject to this Article IX, the Sponsor and any
Related Party may only transfer Common Securities to the Sponsor
or a Related Party of the Sponsor, provided that, any such
transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that after such
transfer:
(i) the Trust would not be classified for United
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States federal income tax purposes as an association
taxable as a corporation or a partnership and each Holder
of Securities would be treated as owning an undivided
beneficial interest in the Subordinated Debt Securities;
and
(ii) the Trust or the transferee would not be an
Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the
registration of Certificates and of transfers of Certificates,
which will be effected without charge but only upon payment (with
such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in
relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated
transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Regular
Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon
the receipt by such transferee of a Certificate. By acceptance of
a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration and the documents incorporated by
reference herein.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the
Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of
receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any
Person, whether or not the Trust or any Trustee shall have actual
or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the
Preferred Securities, the Preferred Securities Certificates, on
original issuance, will be issued in the form of one or more,
fully registered, global Preferred Security Certificates (each a
"Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global
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Certificates shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global
Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the
"Definitive Preferred Security Certificates") have been issued to
the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this
Declaration (including the payment of Distributions on the Global
Certificates and receiving approvals, votes or consents
hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to
the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section
9.4 conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements
between such Preferred Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make
book-entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notice to Clearing Agency.
Whenever a notice or other communication to the
Preferred Security Holders is required under this Declaration,
unless and until Definitive Preferred Security Certificates shall
have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7, all such notices and communications
specified herein to be given to the Preferred Security Holders
shall be given to the Clearing Agency, and the Trustees shall
have no notice obligations to the Preferred Security Beneficial
Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Preferred
Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to such
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Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Preferred
Securities and a successor Clearing Agency is not appointed
within 90 days after such discontinuance pursuant to Section 9.6;
or
(b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book-entry system through the
Clearing Agency with respect to the Preferred Securities, then:
(c) Definitive Preferred Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust with
respect to such Preferred Securities; and
(d) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions, the
Regular Trustees shall cause Definitive Preferred Security
Certificates to be delivered to Preferred Security Beneficial
Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred
Security Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other
marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered
to the Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft
of any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by the Trustees to
keep each of them harmless, then in the absence of notice that
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such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance
of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant
to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration,
the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or
otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust
Act, the Holder of the Common Securities shall be liable for all
of the debts and obligations of the Trust (other than with
respect to the Securities) to the extent not satisfied out of the
Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders of the Preferred Securities shall be entitled to
the same limitation of personal liability extended to
stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
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Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (or, in the case of
the Property Trustee, pursuant to Section 3.9, negligence) or
willful misconduct with respect to such acts or omissions; and
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the
Trust by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered
Person, an Indemnified Person acting under this Declaration shall
not be liable to the Trust or to any other Covered Person for its
good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict
the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by
the parties hereto to replace such other duties and liabilities
of such Indemnified Person;
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Trust or any Holder of
Securities,
the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest)
in such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
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accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of
bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall
not constitute a breach of this Declaration or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise; and
(c) Whenever in this Declaration an Indemnified
Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires,
including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed
by this Declaration or by applicable law.
SECTION 10.4 Indemnification and Compensation.
(a) To the fullest extent permitted by applicable law,
the Sponsor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred
on such Indemnified Person by this Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person
by reason of gross negligence (or, in the case of the Property
Trustee, pursuant to Section 3.9, negligence) or willful
misconduct with respect to such acts or omissions; and
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Sponsor prior to the final
disposition of such claim, demand, action, suit or proceeding
upon receipt by the Sponsor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be
determined by final order of a court of competent jurisdiction
that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a).
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(c) The Sponsor agrees to pay the Property Trustee and
the Delaware Trustee from time to time such compensation for all
services rendered by the Property Trustee and the Delaware
Trustee hereunder as may be mutually agreed upon in writing by
the Sponsor and the Property Trustee and the Delaware Trustee
and, except as otherwise expressly provided herein, to reimburse
the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances
incurred or made by the Property Trustee or the Delaware Trustee
in accordance with any provision of this Declaration, except such
expense, disbursement or advance as may be attributable to its or
their negligence or bad faith.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Subordinated Debt
Securities Issuer, the Delaware Trustee and the Property Trustee
may engage in or possess an interest in other business ventures
of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust
and the Holders of Securities shall have no rights by virtue of
this Declaration in and to such independent ventures or the
income or profits derived therefrom and the pursuit of any such
venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Subordinated Debt Securities Issuer, the Delaware
Trustee, or the Property Trustee shall be obligated to present
any particular investment or other opportunity to the Trust even
if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Subordinated Debt Securities Issuer, the Delaware
Trustee and the Property Trustee shall have the right to take for
its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the
Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as Depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be
the calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
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(a) At all times during the existence of the Trust,
the Regular Trustees shall keep, or cause to be kept, full books
of accounts, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The
books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual
method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall
be examined by and reported upon, as of the end of each Fiscal
Year, by a firm of independent certified public accountants
selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared
and delivered to each of the Holders of Securities, within 90
days after the end of each Fiscal Year of the Trust, annual
financial statements of the Trust, including a balance sheet of
the Trust as of the end of such Fiscal Year, and the related
statements of income or loss.
(c) The Regular Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any
annual United States federal income tax information statement,
required by the Code, containing such information with regard to
the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the
Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30
days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an
annual United States federal income tax return, on a Form 1041 or
such other form required by United States federal income tax law,
and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.3 Banking.
The Regular Trustees shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust;
provided, however, that all payments of funds in respect of the
Subordinated Debt Securities held by the Property Trustee shall
be made directly to the Property Account and no other funds of
the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Regular
Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
SECTION 11.4 Withholding.
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The Trust and the Trustees shall comply with all
withholding requirements under United States federal, state and
local law. The Trust shall request, and the Holders shall provide
to the Trust, such forms or certificates as are necessary to
establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of,
and in fulfilling, its withholding obligations. The Regular
Trustees shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions. To the extent that the Trust
is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a distribution in the
amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration
or by any applicable terms of the Securities (including as set
forth in Section 8 of the terms of the Securities as set forth in
Exhibit A), this Declaration may be amended by, and only by, a
written instrument approved and executed by the Regular Trustees
(or, if there are more than two Regular Trustees a majority of
the Regular Trustees); provided, however, that:
(i) no amendment shall be made, and any such purported
amendment shall be void and ineffective, to the extent the
result thereof would be to:
(A) cause the Trust to be characterized for
purposes of United States federal income taxation as
other than a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee; or
(C) cause the Trust to be deemed to be an
Investment Company which is required to be registered
under the Investment Company Act;
(ii) at such time after the Trust has issued any
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Securities which remain outstanding, any amendment which
would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected
only with such additional requirements as may be set forth
in the terms of such Securities;
(iii) Section 9.1(c) and this Section 12.1 shall
not be amended without the consent of all of the Holders of
the Securities;
(iv) Article IV shall not be amended without the
consent of the Holders of a Majority in liquidation amount
of the Common Securities;
(v) the rights of the holders of the Common Securities
under Article V to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without
the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(vi) no amendment affecting the rights, duties or
immunities of the Property Trustee or the Delaware Trustee
shall be made without the consent of the Property Trustee
or the Delaware Trustee, as the case may be.
(b) Notwithstanding Section 12.1(a)(ii), this
Declaration may be amended without the consent of the Holders of
the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any
other provision of this Declaration; and
(iii) add to the covenants, restrictions or
obligations of the Sponsor.
(c) The Regular Trustees shall promptly furnish to
each of the Property Trustee and the Delaware Trustee a copy of
each amendment to this Declaration.
(d) Every amendment executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as
then in effect.
SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of
Securities
may be called at any time by the Regular Trustees (or as provided
in the terms of the Securities) to consider and act on any matter
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on which Holders of such class of Securities are entitled to act
under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular
Trustees shall call a meeting of such class of Holders, if
directed to do so by the Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to
call a meeting and indicating the general or specific purpose for
which the meeting is to be called. Any Holders of Securities
calling a meeting shall specify in writing the Certificates held
by the Holders of Securities exercising the right to call a
meeting and only those specified shall be counted for purposes of
determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to
meetings:
(i) notice of any such meeting shall be given to each
Trustee and all the Holders of Securities having a right to
vote thereat at least seven days and not more than 60 days
before the date of such meeting. Whenever a vote, consent
or approval of the Holders of Securities is permitted or
required under this Declaration, such vote, consent or
approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of
the Holders of Securities may be taken without a meeting if
a consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than
the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of
the taking of action without a meeting shall be given to
the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a
Holder of Securities is entitled to participate, including
waiving notice of any meeting, or voting or participating
at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing it.
Except as
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otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the
Securities
shall be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration
or the terms of the Securities otherwise provides, the
Regular Trustees, in their sole discretion, shall establish
all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose
of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such
right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee which acts as initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the
date of this Declaration, and each Successor Property Trustee
represents and warrants to the Trust and the Sponsor at the time
of the Successor Property Trustee's acceptance of its appointment
as Property Trustee that:
(a) the Property Trustee is a banking corporation or
association with trust powers, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the
terms of, the Declaration;
(b) the execution, delivery and performance by the
Property Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Property
Trustee. The Declaration has been duly executed and delivered by
the Property Trustee, and it constitutes a legal, valid and
binding obligation of the Property Trustee, enforceable against
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it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors rights generally and to general
principles of equity and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the
Declaration by the Property Trustee does not conflict with or
constitute a breach of the Articles of Organization or By-laws of
the Property Trustee;
(d) no consent, approval or authorization of, or
registration with or notice to, any state or federal banking
authority is required for the execution, delivery or performance
by the Property Trustee, of the Declaration, except such as have
been obtained, made or taken.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee
represents and warrants to the Trust and to the Sponsor at the
date of this Declaration, and each Successor Delaware Trustee
represents and warrants to the Trust and the Sponsor at the time
of the Successor Delaware Trustee's acceptance of its appointment
as Delaware Trustee that:
(a) the Delaware Trustee is a banking corporation with
trust powers, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization,
with corporate power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the
Declaration;
(b) the execution, delivery and performance by the
Delaware Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Delaware
Trustee. The Declaration has been duly executed and delivered by
the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles
of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of the
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of the certificate of incorporation or
by-laws of the Delaware Trustee;
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(d) No consent, approval or authorization of, or
registration with or notice to, any United States state or
federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of the Declaration, except
such as have been obtained, made or taken;
(e) The Delaware Trustee is an entity which has its
principal place of business in the State of Delaware; and
(f) The Declaration constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be
in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed, as follows:
(a) if given to the Trust or the Regular Trustees, in
care of the Regular Trustees at the Trust's mailing address set
forth below (or such other address as the Regular Trustees may
give notice of to the Property Trustee, the Delaware Trustee and
the Holders of the Securities):
SI Financing Trust I
c/o Salomon Inc
Seven World Trade Center
New York, New York 10048
Attention:
(b) if given to the Property Trustee, at the mailing
address set forth below (or such other address as the Property
Trustee may give notice of to the Trust and the Holders of the
Securities):
Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Vice President - Corporate Trustee
Administration Department
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(c) if given to the Holder of the Common Securities,
at the mailing address of the Sponsor set forth below (or such
other address as the Holder of the Common Securities may give
notice to the Trust):
Salomon Inc
Seven World Trade Center
New York, New York 10048
Attention:
(d) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as the Delaware
Trustee may give notice of to the Trust and the Holders of the
Securities):
Chemical Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention:
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties
hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies
shall be governed by such laws without regard to the principles
of conflicts of laws thereof.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the
Trust not be characterized for United States federal income tax
purposes as an association taxable as a corporation or a
partnership but rather, the Trust be characterized as a grantor
trust or otherwise in a manner that each Holder of Securities be
treated as owning an undivided beneficial interest in the
Subordinated Debt Securities. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
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Headings contained in this Declaration are inserted
for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto
is named or referred to, the successors and assigns of such party
shall be deemed to be included, and all covenants and agreements
in this Declaration by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and
assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the
application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the
application of such provision to Persons or circumstances other
than those to which it is held invalid, shall not be affected
thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart
of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature
pages shall be read as though one, and they shall have the same
force and effect as though all of the signers had signed a single
signature page.
SECTION 14.8 Covenant Regarding Voting Rights.
To the extent the Preferred Securities are pledged
with the Collateral Agent pursuant to the Pledge Agreement, the
Regular Trustee shall cause the Trust to take all action which
may be deemed necessary by the Unit Agent in order to enable the
Unit Agent to vote such Preferred Securities or cause such
Preferred Securities to be voted in accordance with Section 403
of the Unit Agreement and Article V of the Pledge Agreement.
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IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
SALOMON INC,
as Sponsor
By:______________________________
Name:
Title:
Nazareth A. Festekjian,
as Regular Trustee
- ---------------------------------
Philip U. Tremmel,
as Regular Trustee
- ---------------------------------
Marwan A. Marshi,
as Regular Trustee
- ---------------------------------
CHEMICAL BANK,
as Property Trustee
By:______________________________
Name:
Title:
CHEMICAL BANK DELAWARE,
as Delaware Trustee
By:______________________________
Name: John J. Cashin
Title: Senior Trust Officer
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EXHIBIT A
TERMS OF
% TRUST PREFERRED SECURITIES
% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of , 1996 (as amended from time to
time, the "Declaration"), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the
Preferred Securities and the Common Securities are set out below
(each capitalized term used but not defined herein has the
meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) "Preferred Securities." Preferred Securities of
the Trust with an aggregate liquidation amount with respect to
the assets of the Trust of $ million ($ ) and a liquidation
amount with respect to the assets of the Trust of $25 per
Preferred Security, are hereby designated for the purposes of
identification only as " % Trust Preferred Securities" (the
"Preferred Securities").
(b) "Common Securities." Common Securities of the
Trust with an aggregate liquidation amount with respect to the
assets of the Trust of $ million ($ ) and a liquidation amount
with respect to the assets of the Trust of $25 per Common
Security, are hereby designated for the purposes of
identification only as " % Trust Common Securities" (the "Common
Securities").
2. Distributions.
(a) Distributions payable on each Security will be at
a rate per annum of % (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such rate being the rate
of interest payable on the Subordinated Debt Securities to be
held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon at the Coupon Rate
(to the extent permitted by applicable law). The term
"Distributions" as used in these terms includes such periodic
cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that
payments are made in respect of the Subordinated Debt Securities
held by the Property Trustee. The amount of Distributions payable
for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-
day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed,
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Distributions will be computed on the basis of the actual number
of days elapsed in such a 30-day month.
(b) Distributions on the Securities will be
cumulative, will accrue from , 1996 and will be payable quarterly
in arrears, on , , and
of each year, commencing on , 1996, except as otherwise
described below.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of
the Trust at the close of business on the fifteenth Business Day
immediately preceding each of the relevant payment dates which
payment dates correspond to the interest payment dates on the
Subordinated Debt Securities. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such
payment in respect of the Preferred Securities will be made as
described under the heading "Description of the Units --
Book-Entry System" in the Prospectus dated , 1996 (the
"Prospectus") of the Trust included in the Registration Statement
on Form S-3 (file no. 333-2897) of the Sponsor and the Trust. The
relevant record dates for the Common Securities shall be the same
record date as the record date for the Preferred Securities.
Distributions payable on any Securities that are not punctually
paid on any Distribution payment date, as a result of the
Subordinated Debt Securities Issuer or the Sponsor having failed
to make a payment under the Subordinated Debt Securities, will
cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name
such Securities are registered on the special record date or
other specified date determined in accordance with the Indenture.
If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable
on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. So long as the
Holder of any Preferred Securities is the Collateral Agent, the
payment of Distributions on such Preferred Securities held by the
Collateral Agent will be made at such place and to such account
as may be designated by the Collateral Agent.
(d) In the event that there is any money or other
property held by or for the Trust that is not accounted for
hereunder, such property shall be distributed Pro Rata (as
defined herein) among the Holders of the Securities on the
relevant record date.
3. Liquidation Distribution Upon Dissolution.
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In the event of any voluntary or involuntary
dissolution, winding-up or termination of the Trust, the Holders
of the Securities on the date of the dissolution, winding-up or
termination, as the case may be, will be entitled to receive out
of the assets of the Trust available for distribution to Holders
of Securities after satisfaction of liabilities to creditors, an
amount equal to the aggregate of the stated liquidation amount of
$25 per Security plus accrued and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution,
winding-up or termination, Subordinated Debt Securities in an
aggregate principal amount equal to the aggregate stated
liquidation amount of such Securities shall be distributed on a
Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by
the Trust on the Securities shall be paid on a Pro Rata basis,
provided that such amounts may be paid in any combination of
cash, Subordinated Debt Securities or other property held by the
Trust.
In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder,
such property shall be distributed Pro Rata among the Holders of
the Securities on the relevant record date.
4. Redemption and Distribution at Option of the Sponsor.
(a) Upon the repayment of the Subordinated Debt
Securities in whole (but not in part), whether at maturity or
upon redemption at the option of the Sponsor, the proceeds from
such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to
the aggregate principal amount of the Subordinated Debt
Securities so repaid or redeemed, at a redemption price of $25
per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the redemption, payable in
cash (the "Redemption Price"). Holders will be given not less
than 30 nor more than 60 days' notice of such redemption.
(b) If at any time, a Tax Event or an Investment
Company Event (each as defined below, and each a "Special Event")
shall occur and be continuing, the Regular Trustees shall
dissolve the Trust and, after satisfaction of creditors, cause
Subordinated Debt Securities held by the Property Trustee, having
an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued
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and unpaid Distributions on and having the same record date for
payment as the Securities, to be distributed to the Holders of
the Securities, in satisfaction of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90 Day Period"); provided,
however, that as a condition of such dissolution and
distribution, the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in
such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to
the effect that the Holders of the Securities will not recognize
any gain or loss for United States federal income tax purposes as
a result of the dissolution of the Trust and the distribution of
Subordinated Debt Securities; provided, further, that, if at the
time there is available to the Trust the opportunity to
eliminate, within the 90 Day Period, the Special Event by taking
some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that
has no adverse effect on the Trust, the Subordinated Debt
Securities Issuer, the Sponsor or the Holders of the Securities
("Ministerial Action"), the Regular Trustees will pursue such
Ministerial Action in lieu of dissolution.
In addition, at any time, upon not less than 30 nor
more than 60 days' notice to the Holders, the Sponsor shall have
the right to direct the Regular Trustees to dissolve the Trust
and, after satisfaction of creditors, cause Subordinated Debt
Securities held by the Property Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the Coupon Rate of, and
accrued and unpaid interest equal to accrued and unpaid
Distributions on and having the same record date for payment as
the Securities, to be distributed to the Holders of the
Securities, in satisfaction of such Holders' interests in the
Trust on a Pro Rata basis (an "Optional Distribution").
If, in the case of the occurrence of a Tax Event, (i)
the Subordinated Debt Securities Issuer has received an opinion
(a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk
that the Subordinated Debt Securities Issuer would be precluded
from deducting the interest on the Subordinated Debt Securities
for United States federal income tax purposes even after the
Subordinated Debt Securities were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust
as described in this paragraph 4(b), or (ii) the Regular Trustees
shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, the
Subordinated Debt Securities Issuer shall have the right at any
time, upon not less than 30 nor more than 60 days' notice, to
redeem the Subordinated Debt Securities in whole (but not in
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part) for cash within 90 days following the occurrence of such
Tax Event, and following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal
amount of the Subordinated Debt Securities so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata
basis; provided, however, that, if at the time there is available
to the Regular Trustees the opportunity to eliminate, within such
90 day period, the Tax Event by taking some Ministerial Action,
the Trust or the Subordinated Debt Securities Issuer will pursue
such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent tax
counsel experienced in such matters (a "Dissolution Tax Opinion")
to the effect that on or after the date of the Prospectus, as a
result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or
taxing authority therefore or therein, or (b) any amendment to,
or change in, an interpretation or application of any such laws
or regulations by any legislative body, court, governmental
agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation
or pronouncement is issued or announced or which action is taken,
in each case on or after the date of the Prospectus, there is
more than an insubstantial risk that (i) the Trust is or will be
within 90 days of the date thereof, subject to United States
federal income tax with respect to interest accrued or received
on the Subordinated Debt Securities, (ii) the Trust is, or will
be within 90 days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges, or
(iii) interest payable by the Subordinated Debt Securities Issuer
to the Trust on the Subordinated Debt Securities is not, or
within 90 days of the date thereof will not be, deductible, in
whole or in part, by the Subordinated Debt Securities Issuer for
United States federal income tax purposes.
"Investment Company Event" means that the Regular
Trustees shall have received an opinion of a nationally
recognized independent counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a
change in law or regulation or a written change in interpretation
or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in
1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which
Change in 1940 Act Law becomes effective on or after the date of
the Prospectus.
On and from the date fixed by the Regular Trustees for
any distribution of Subordinated Debt Securities and dissolution
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of the Trust: (i) the Securities will no longer be deemed to be
outstanding, (ii) The Depository Trust Company (the "Depositary")
or its nominee (or any successor Depositary or its nominee), as
the record Holder of the Preferred Securities, will receive a
registered global certificate and (iii) certificates representing
the Subordinated Debt Securities to be delivered upon such
distribution and any certificates representing Common Securities,
except for certificates representing Preferred Securities held by
the Depositary or its nominee (or any successor Depositary or its
nominee), will be deemed to represent beneficial interests in the
Subordinated Debt Securities having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate on and accrued
and unpaid interest equal to accrued and unpaid distributions on
such Securities until such certificates are presented to the
Subordinated Debt Securities Issuer or its agent for transfer or
reissue.
(c) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of
distribution of Subordinated Debt Securities in exchange for the
Securities (a "Redemption/Distribution Notice") will be given by
the Trust by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the date
fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the
Subordinated Debt Securities. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph 4(c)(i), a
Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed, by first-class mail, postage
prepaid, to Holders of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Securities at the
address of each such Holder appearing in the books and records of
the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings
with respect to any other Holder.
(ii) If Securities are to be redeemed and the
Trust gives a Redemption/Distribution Notice, which notice may
only be issued if the Subordinated Debt Securities are redeemed
as set out in this paragraph 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities,
by 12:00 noon, New York City time, on the redemption date, the
Property Trustee will transfer from the Property Account by wire
to the Depositary (or successor Depositary) funds sufficient to
pay the applicable Redemption Price with respect to the Preferred
Securities, and (B) if the Preferred Securities are issued in
definitive form, with respect to the Preferred Securities, and
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with respect to the Common Securities, provided that the
Subordinated Debt Securities Issuer has paid the Property Trustee
a sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debt Securities, the
Property Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust
on the record date of the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to
the close of business on the date of such deposit, or on the
redemption date, as applicable, Distributions will cease to
accrue on the Securities so called for redemption and all rights
of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the
transfer of any Securities which have been so called for
redemption. If any date fixed for redemption of Securities is not
a Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day that is a
Business Day (and no interest shall accrue as a result of such
delay) except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment
of the Redemption Price in respect of Securities is improperly
withheld or refused and not paid either by the Property Trustee
or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will
continue to accrue, from the original redemption date to the
actual date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of
calculating the Redemption Price. Notwithstanding the foregoing,
so long as the Holder of any Preferred Securities is the
Collateral Agent, the payment of the Redemption Price in respect
of such Preferred Securities held by the Collateral Agent will be
made at such place and to such account as may be designated by
the Collateral Agent.
(iii) Redemption/Distribution Notices shall be
sent by the Regular Trustees on behalf of the Trust to (A) in
respect of the Preferred Securities, the Depositary or its
nominee (or any successor Clearing Agency or its nominee) if the
Global Certificates have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder
thereof.
(iv) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities
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laws), provided that the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor or any
of its subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
5. Repayment at Option of Holders
(a) Each Holder of Preferred Securities, including the
Collateral Agent, shall have the right to require the Trust to
repay all or a portion of the Preferred Securities owned or
pledged with such Holder (the "Put Option") on the Business Day
immediately preceding the Purchase Date (or on the related
Delayed Purchase Date) (the "Initial Put Option Exercise Date")
at a repayment price of $25 per Security plus an amount equal to
accrued Distributions thereon to the date of payment (the
"Repayment Price"). In addition, after the settlement of the
Purchase Contracts on an Early Purchase Date (or a related
Delayed Purchase Date), Holders of Preferred Securities that
remain outstanding after such date will have a Put Option with
respect to the Preferred Securities owned by such Holder on the
fifth anniversary of such date (the "Fifth Anniversary Put Option
Exercise Date" and, together with the Initial Put Option Exercise
Date, the "Put Option Exercise Date") at the Repayment Price.
(b) The Trust will obtain funds to pay the Repayment
Price of Preferred Securities being repaid under the Put Option
by presenting to the Subordinated Debt Securities Issuer,
pursuant to the Trust's right under the Subordinated Debt
Securities to require the Subordinated Debt Securities Issuer to
repay all or a portion of the Subordinated Debt Securities on the
Put Option Exercise Date, Subordinated Debt Securities in an
aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities for repayment on
the Put Option Exercise Date at the Subordinated Debt Repayment
Price.
(c) In order for the Preferred Securities to be repaid
on the Put Option Exercise Date, the Trust must receive at the
office or agency of the Property Trustee maintained for that
purpose in The City of New York, New York, either (i) not less
than 10 nor more than 30 days prior to the Initial Put Option
Exercise Date or (ii) not less than 30 nor more than 60 days
prior to the Fifth Anniversary Put Option Exercise Date, the
Preferred Securities to be repaid with the form entitled "Option
to Elect Repayment" on the reverse thereof or otherwise
accompanying such Preferred Security duly completed. Any such
notice received by the Trust shall be irrevocable. All questions
as to the validity, eligibility (including time of receipt) and
acceptance of the Preferred Securities for repayment shall be
determined by the Trust, whose determination shall be final and
binding. Notwithstanding the foregoing, so long as the Holder is
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the Collateral Agent, such notice to elect repayment may be
delivered to the Trust at any time prior to 10:00 a.m., New York
City time, on the Initial Put Option Exercise Date and in the
form and manner as may be designated by the Collateral Agent.
(d) The Regular Trustees shall cause the Trust to
comply with the provisions of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act if required and
will file Schedule 13E-4 or any other schedule if required
thereunder.
(e) Payment of the Repayment Price to Holders of
Preferred Securities shall be made at the office or agency of the
Property Trustee maintained for that purpose in The City of New
York, New York, provided that the Subordinated Debt Securities
Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related repayment of the Subordinated Debt
Securities. Notwithstanding the foregoing, so long as the Holder
of any Preferred Securities is the Collateral Agent, the payment
of the Repayment Price in respect of such Preferred Securities
held by the Collateral Agent shall be made no later than 1:00
p.m., New York City time, on the Initial Put Option Exercise Date
by check or wire transfer in immediately available funds at such
place and to such account as may be designated by the Collateral
Agent. If the Property Trustee holds immediately available funds
sufficient to pay the Repayment Price of such Preferred
Securities, then, immediately prior to the close of business on
the Put Option Exercise Date, such Preferred Securities will
cease to be outstanding and distributions thereon will cease to
accrue, whether or not Preferred Securities are delivered to the
Property Trustee, and all other rights of the Holder in respect
of the Preferred Securities, including the Holder's right to
require the Trust to repay such Preferred Securities, shall
terminate and lapse (other than the right to receive the
Repayment Price but without interest on such Repayment Price).
Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Preferred
Securities for which repayment has been elected. Except as
described in paragraph 5(f), if payment of the Repayment Price in
respect of Preferred Securities is (i) improperly withheld or
refused and not paid either by the Property Trustee or by the
Sponsor as guarantor pursuant to the Preferred Securities
Guarantee, or (ii) not paid by the Property Trustee as the result
of an Event of Default with respect to the Subordinated Debt
Securities presented for repayment as described in paragraph
5(b), Distributions on such Preferred Securities will continue to
accrue, from the original Put Option Exercise Date to the actual
date of payment, in which case the actual payment date will be
considered the Put Option Exercise Date for purposes of
calculating the Repayment Price.
(f) If a Put Default shall occur and continue for
more
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than two Business Days following an Initial Put Option Exercise
Date, and the Purchase Date is an Early Purchase Date, then (a)
any exercise of the optional right to elect repayment of the
Preferred Securities on such Initial Put Option Exercise Date
shall be deemed rescinded and annulled automatically, (b) any
presentation of the related Subordinated Debt Securities to the
Company for repayment will be deemed rescinded and annulled
automatically and (c) any payments received by the Property
Trustee from the repayment of such Subordinated Debt Securities
will be returned to the Company.
(g) The rescission or annulment of any optional right
to elect repayment as provided in paragraph 5(f) will not prevent
Holders of Preferred Securities from exercising such right at a
later date.
6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraph 6(b) and
otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) The Holders of a Majority in liquidation amount of
the Preferred Securities voting separately as a class may direct
the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust
or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee,
as holder of the Subordinated Debt Securities, to (i) exercise
the remedies available under the Indenture with respect to the
Subordinated Debt Securities, including directing the time,
method, place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or
power conferred on the Indenture Trustee with respect to the
Subordinated Debt Securities, (ii) waive any past default that is
waivable under Section 513 of the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all
the Subordinated Debt Securities shall be due and payable or (iv)
consent to any amendment, modification or termination of the
Indenture or the Subordinated Debt Securities requiring the
consent of the holders of the Subordinated Debt Securities,
provided, however, that, where a consent or action under the
Indenture would require the consent or act of the Holders of
greater than a majority of the Holders in principal amount of
Subordinated Debt Securities affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or
take such action at the written direction of the Holders of at
least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The
Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred
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Securities. If the Property Trustee fails to enforce its rights
under the Subordinated Debt Securities after a Holder of record
of Preferred Securities has made a written request, such Holder
may institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Subordinated Debt
Securities, without first instituting a legal proceeding against
the Property Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Subordinated
Debt Securities Issuer to pay interest or principal on the
Subordinated Debt Securities on the date such interest or
principal is otherwise payable (or in the case of redemption or
repayment, on the redemption date or repayment date, as the case
may be), then a Holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Subordinated Debt
Securities having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in
the Subordinated Debt Securities. In connection with such Direct
Action, the Holder of the Common Securities will be subrogated to
the rights of such Holder of Preferred Securities to the extent
of any payment made by the Company to such Holder of Preferred
Securities in such Direct Action. Other than with respect to
directing the time, method and place of conducting any proceeding
for a remedy available to the Property Trustee or the Indenture
Trustee as set forth above, the Property Trustee shall not take
any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States
federal income tax the Trust will not fail to be classified as a
grantor trust on account of such action. Except as provided in
the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to
the holders of the Subordinated Debt Securities.
Any approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of
Preferred Securities convened for such purpose, at a meeting of
all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to
vote, or of any matter upon which action by written consent of
such Holders is to be taken, to be mailed to each Holder of
record of Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of
proxies or consents.
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No vote or consent of the Holders of the Preferred
Securities will be required for the Trust to redeem or repay and
cancel Preferred Securities or to distribute the Subordinated
Debt Securities in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Preferred Securities
are entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are owned
by the Sponsor, or by any entity directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Sponsor shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), 7(c) and
8 and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled,
in accordance with Article of the Declaration, to vote to
appoint, remove or replace any Trustee or to increase or decrease
the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only
after all Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated, the
Holders of a Majority in liquidation amount of the Common
Securities voting separately as a class may direct the time,
method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as holder of
the Subordinated Debt Securities, to (i) exercise the remedies
available under the Indenture with respect to the Subordinated
Debt Securities, including directing the time, method, place of
conducting any proceeding for any remedy available to the
Indenture Trustee, or exercising any trust or power conferred on
the Indenture Trustee with respect to the Subordinated Debt
Securities, (ii) waive any past default and its consequences that
is waivable under Section 513 of the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of
all the Subordinated Debt Securities shall be due and payable or
(iv) consent to any amendment, modification or termination of the
Indenture or the Subordinated Debt Securities requiring the
consent of the holders of the Subordinated Debt Securities;
provided, however, that where a consent or action under the
Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Subordinated Debt
Securities affected thereby (a "Super Majority"), the Property
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Trustee may only give such consent or take such action at the
direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of
the Subordinated Debt Securities outstanding. Pursuant to this
paragraph 7(c), the Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the
time, method and place of conducting any proceeding for a remedy
available to the Property Trustee or the Indenture Trustee as set
forth above, the Property Trustee shall not take any of the
actions described in clauses (i), (ii), (iii) or (iv) above
unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States
federal income tax the Trust will not fail to be classified as a
grantor trust on account of such action. If the Property Trustee
fails to enforce its rights under the Subordinated Debt
Securities, any Holder of Common Securities may institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting
a legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of
Common Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders
is to be taken, to be mailed to each Holder of record of Common
Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is
sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common
Securities will be required for the Trust to redeem and cancel
Common Securities or to distribute the Subordinated Debt
Securities in accordance with the Declaration and the terms of
the Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1
of the Declaration, if any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Preferred Securities,
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<PAGE>
whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust,
other than as described in Section 8.1 of the Declaration, then
the Holders of outstanding Preferred Securities as a class will
be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall
not be effective except with the approval of the Holders of at
least 66-2/3% in liquidation amount of the Securities, voting
together as a single class; provided, however, that the rights of
Holders of Preferred Securities under Section 3.8(e) of the
Declaration to take a Direct Action shall not be amended without
the consent of each Holder of Preferred Securities; provided,
further, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled
to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of 66-
2/3% in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee
as the holder of the Subordinated Debt Securities is required
under the Indenture with respect to any amendment, modification
or termination of the Indenture, the Property Trustee shall
request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where
a consent under the Indenture would require the consent of the
holders of greater than a majority in aggregate principal amount
of the Subordinated Debt Securities (a "Super Majority"), the
Property Trustee may only give such consent at the direction of
the Holders of at least the proportion in liquidation amount of
the Securities which the relevant Super Majority represents of
the aggregate principal amount of the Subordinated Debt
Securities outstanding; provided, further, that the Property
Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this paragraph
8(b) unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United Stated
federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean
pro rata to each Holder of Securities on the relevant record date
according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default under the Indenture
A-14
<PAGE>
has occurred and is continuing, in which case any funds available
to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and only after satisfaction of
such aggregate liquidation amount owed to the Holders of the
Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding until
satisfaction of such aggregate liquidation amount owed to the
Holders of the Common Securities. In the event that there is any
money or other property held by or for the Trust after such
payment, such property shall be distributed Pro Rata among the
Holders of the Securities as provided in this paragraph.
10. Ranking.
The Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except
that where an Event of Default occurs and is continuing under the
Indenture, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon
liquidation, repayment and otherwise are subordinated to the
rights to payment of the Holders of the Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common
Securities, by the acceptance thereof, agrees to the provisions
of the Preferred Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions
therein, and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive
rights to subscribe for any additional Securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration,
the Preferred Securities Guarantee and the Indenture to a Holder
without charge on written request to the Trust at its principal
place of business.
A-15
<PAGE>
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL
CERTIFICATE INSERT -- This Preferred Security is a Global
Certificate within the meaning of the Declaration hereinafter
referred to and is registered in the name of The Depositary Trust
Company (the "Depositary") or a nominee of the Depositary. This
Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the
Declaration and no transfer of this Preferred Security (other
than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depository or by a nominee of the
Depository to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an
authorized representative of The Depository Trust Company (55
Water Street, New York) to the Trust or its agent for
registration of transfer, exchange or payment, and any Preferred
Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The
Depository Trust Company and any payment thereon is made to Cede
& Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
Certificate Number Number of
Preferred
Securities
CUSIP
NO.____________________
Certificate Evidencing Preferred Securities
of
SI Financing Trust I
Preferred Securities
(liquidation amount $25 per Preferred Security)
SI FINANCING TRUST I, a business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies
that (the "Holder") is the registered owner of preferred
securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the
% Trust Preferred Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the
Trust, in person or by a duly authorized agent, upon surrender of
this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences
A-16
<PAGE>
and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of 1996 among Salomon Inc, as
Sponsor, the trustees named therein and the holders from time to
time of individual beneficial interests in the assets of the
Trust, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Exhibit A to the
Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Preferred Securities Guarantee and the
Indenture to a Holder without charge upon written request to the
Trust as its principal place of business.
Upon receipt of this certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Subordinated Debt
Securities as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Subordinated
Debt Securities.
IN WITNESS WHEREOF, the Trust has executed this
certificate this day of _________ 1996.
[ ]
as Trustee
_____________________________
[ ]
as Trustee
_____________________________
----------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and
instructs the Trust to repay $ stated liquidation amount of the
within Preferred Security, pursuant to its terms, on the "Put
Option Exercise Date" first occurring after the date of receipt
of the within Preferred Security as specified below, together
with distributions thereon accrued to the date or repayment, to
the undersigned at:
(Please print or type Name and Address of the Undersigned)
A-17
<PAGE>
and to issue to the undersigned, pursuant to the terms of the
Declaration, a new Preferred Security or Preferred Securities
representing the remaining stated liquidation amount of this
Preferred Security.
For this Option to Elect Repayment to be effective, this
Preferred Security with the Option to Elect Repayment duly
completed must be received by the Trust at the office or agency
of the Property Trustee at 450 West 33rd Street, 15th Floor, New
York, New York 10001, Attention: Vice-President -- Corporate
Trustee Administration Department.
Dated: Signature:
________________________
Note: The signature to this Option to Elect Repayment must
correspond with the name as written upon the face of the within
Preferred Security in every particular without alteration or
enlargement or any change whatsoever.
----------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
_________________________________________________________________
_________________________________________________________________
Please Print or Type Name and Address Including Postal Zip
Code of Assignee
_________________________________________________________________
the within Preferred Securities and all rights thereunder, hereby
irrevocably constituting and appointing
_____________________________________________________ attorney to
transfer said Preferred Securities on the books of SI Financing
Trust I with full power of substitution in the premises.
Dated: _________________ ______________________________
Signature
------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Preferred Securities in every
particular, without alteration or
enlargement or any change whatsoever.
A-18
<PAGE>
ANNEX II
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
SI Financing Trust I
Common Securities
(liquidation amount $25 per Common Security)
SI FINANCING TRUST I, a business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies
that (the "Holder") is the registered owner of common securities
of the Trust representing undivided beneficial interests in the
assets of the Trust designated the
% Trust Common Securities (liquidation amount $25 per
Common Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the Trust, in person
or by a duly authorized agent, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued
and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as
of 1996 among Salomon Inc, as Sponsor, the trustees named therein
and the holders from time to time of individual beneficial
interests in the assets of the Trust, as the same may be amended
from time to time (the "Declaration"), including the designation
of the terms of the Common Securities as set forth in Exhibit A
to the Declaration. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Common Securities
Guarantee and the Indenture to a Holder without charge upon
written request to the Trust as its principal place of business.
Upon receipt of this certificate, the Holder is bound by
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Subordinated Debt
Securities as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Subordinated
Debt Securities.
A-19
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this
certificate this day of _________, 1996.
[ ]
as Trustee
----------------------------
[ ]
as Trustee
----------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
of Assignee
- -----------------------------------------------------------------
the within Common Securities and all rights thereunder, hereby
irrevocably constituting and appointing
_____________________________________________________ attorney to
transfer said Common Securities on the books of SI Financing
Trust I with full power of substitution in the premises.
Dated: _______________ _________________________________
Signature
---------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Common Securities in every
particular, without alteration or
enlargement or any change whatsoever.
A-20
<PAGE>
EXHIBIT B
SPECIMEN OF SUBORDINATED DEBT SECURITY
(FORM OF FACE OF SUBORDINATED DEBT SECURITY)
[IF THE SUBORDINATED DEBT SECURITY IS TO BE A GLOBAL
SECURITY, INSERT - This Subordinated Debt Security is a Global
Security within the meaning of the Indenture hereinafter referred
to and is registered in the name of the Depositary or the nominee
of the Depositary. This Subordinated Debt Security is
exchangeable for Subordinated Debt Securities registered in the
name of a Person other than the Depositary or its nominee only in
the limited circumstances described in the Indenture, and no
transfer of this Subordinated Debt Security (other than a
transfer of this Subordinated Debt Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Subordinated Debt Security is presented by an
authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the issuer or its agent for
registration of transfer, exchange or payment, and any
Subordinated Debt Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
- ----------------------------------------
No. $
[IF THE SUBORDINATED DEBT SECURITY IS TO BE A GLOBAL SECURITY,
INSERT- CUSIP No. ]
SALOMON INC
% SUBORDINATED DEBT SECURITY DUE , 2026
Salomon Inc, a Delaware corporation (the "Company,"
which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to
pay to or registered assigns, the principal sum of Dollars on ,
2026, and to pay interest on said principal sum from , 1996 or
from the most recent interest payment date (each such date, a
"Payment Date") to which interest has been paid or duly provided
for, quarterly in arrears on , , and of each year commencing ,
1996 at the rate of % per annum until
B-1
<PAGE>
the principal hereof shall have become due and payable, and on
any overdue principal and (without duplication and to the extent
that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the same rate per
annum, compounded quarterly. The amount of interest payable for
any period shall be computed on the basis of a 360-day year of
twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in
such a 30-day month. In the event that any date on which interest
is payable on this Subordinated Debt Security is not a Business
Day, then payment of interest payable on such date will be made
on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Payment
Date will, as provided in the Indenture, be paid to the Person in
whose name this Subordinated Debt Security (or one or more
Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the Regular Record Date
for such interest installment which shall be the close of
business on the fifteenth day immediately preceding such Payment
Date. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the
Registered Holders on such Regular Record Date, and may be paid
to the Person in whose name this Subordinated Debt Security (or
one or more Predecessor Securities) is registered at the close of
business on a Special Record Date to be fixed by the Trustee for
the payment of such Defaulted Interest, notice whereof shall be
given to the Registered Holders of the Subordinated Debt
Securities not less than ten days prior to such Special Record
Date, or may be paid at any time in any other lawful manner, all
as more fully provided in the Indenture. The principal of and the
interest (including Additional Interest, if any) on this
Subordinated Debt Security shall be payable at the Corporate
Trust Office in any coin or currency of the United States of
America which at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed
to the Registered Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the
Holder of this Subordinated Debt Security is the Property Trustee
or the Collateral Agent, the Company may act as its own Paying
Agent, and the payment of the principal of and interest
(including Additional Interest, if any) on this Subordinated Debt
Security will be made by wire transfer at such place and to such
account as may be designated in writing by the Property Trustee
or the Collateral Agent, as the case may be, prior to such
B-2
<PAGE>
payment.
The indebtedness evidenced by this Subordinated Debt
Security is, to the extent provided in the Indenture, subordinate
and junior in right of payment to the prior payment in full of
all Senior Indebtedness, and this Subordinated Debt Security is
issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Subordinated Debt Security, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all
such purposes. Each Holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon
said provisions.
This Subordinated Debt Security shall not be entitled
to any benefit under the Indenture hereinafter referred to, be
valid or become obligatory for any purpose until the Certificate
of Authentication hereon shall have been signed by or on behalf
of the Trustee.
The provisions of this Subordinated Debt Security are
continued on the reverse side hereof and such continued
provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this
instrument to be executed.
Dated_____________________
SALOMON INC
By______________________
Attest:
By______________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the
within-mentioned Indenture.
B-3
<PAGE>
BANKERS TRUST COMPANY,
as Trustee
[By _____________________
Authenticating Agent]
By______________________
Authorized Officer
B-4
<PAGE>
(FORM OF REVERSE OF SUBORDINATED DEBT SECURITY)
This Subordinated Debt Security is one of a duly
authorized series of subordinated debentures, notes, bonds or
other evidences of indebtedness of the Company (hereinafter
referred to as the "Debt Securities"), hereinafter specified, all
issued or to be issued in one or more series under and pursuant
to an Indenture dated as of December 1, 1988 duly executed and
delivered between the Company and Bankers Trust Company, a New
York banking corporation, as Trustee (hereinafter referred to as
the "Trustee"), as supplemented from time to time and as
supplemented by the Third Supplemental Indenture dated as of
, 1996 between the Company and the Trustee (as so
supplemented and as may be further supplemented from time to
time, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders
of the Debt Securities. By the terms of the Indenture, the Debt
Securities are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in
the Indenture provided. This series of Debt Securities is
designated the % Subordinated Debt Securities due , 2026 in an
aggregate principal amount as specified in said Third
Supplemental Indenture.
The Subordinated Debt Securities are not entitled to
the benefit of any sinking fund.
Because of the occurrence and continuation of a Tax
Event, in certain circumstances this Subordinated Debt Security
will become due and payable at a redemption price equal to 100%
of the principal amount plus any accrued but unpaid interest,
including Additional Interest, if any, to the date of such
redemption (the "Subordinated Debt Redemption Price"). Except as
provided in the preceding sentence, the Subordinated Debt
Securities may not be redeemed by the Company prior to
, 2001. The Company shall have the right to redeem this
Subordinated Debt Security at the option of the Company, without
premium or penalty, in whole (but not in part), on any Payment
Date on or after , 2001 (an "Optional Redemption"), at the
Subordinated Debt Redemption Price; provided, however, that after
the Purchase Date (or a related Delayed Purchase Date), such
right will be postponed or suspended until the fifth anniversary
of such date. Any redemption pursuant to this paragraph will be
made upon not less than 30 nor more than 60 days' notice.
The Holder of this Subordinated Debt Security,
including the Property Trustee and the Collateral Agent, shall
have the right to require the Company to repay all or a portion
(which portion must be $25 or any integral multiple thereof) of
B-5
<PAGE>
this Subordinated Debt Security (the "Subordinated Debt Put
Option") on the Initial Put Option Exercise Date at a repayment
price equal to 100% of the principal amount thereof plus any
accrued but unpaid interest, including Additional Interest, if
any, to the date of such repayment (the "Subordinated Debt
Repayment Price"). In addition, after the settlement of the
Purchase Contracts on an Early Purchase Date (or a related
Delayed Purchase Date), the Holder of this Subordinated Debt
Security, including the Property Trustee, shall have a
Subordinated Debt Put Option on the Fifth Anniversary Put Option
Exercise Date at the Subordinated Debt Repayment Price. In order
for the Subordinated Debt Securities to be repaid on the Put
Option Exercise Date, the Company must receive at the Corporate
Trust Office, either (i) not less than 10 nor more than 30 days
prior to the Initial Put Option Exercise Date or (ii) not less
than 25 nor more than 60 days prior to the Fifth Anniversary Put
Option Exercise Date, the Subordinated Debt Securities to be
repaid with the form entitled "Option to Elect Repayment" hereon
duly completed. Any such notice received by the Company shall be
irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Subordinated
Debt Securities for repayment shall be determined by the Company,
whose determination shall be final and binding. Notwithstanding
the foregoing, so long as the Holder is the Property Trustee or
the Collateral Agent, and assuming prior notice to the Trustee,
this Subordinated Debt Security may be received at the Corporate
Trust Office at any time prior to 11:00 a.m., New York City time,
on the Put Option Exercise Date in the form and manner as may be
designated by the Property Trustee or the Collateral Agent and
acceptable to the Trustee.
In the event of repayment of this Subordinated Debt
Security in part only, a new Subordinated Debt Security or
Subordinated Debt Securities of this series for the unredeemed
portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
In case an Event of Default, as defined in the
Indenture, shall have occurred and be continuing, the principal
of all of the Subordinated Debt Securities may be declared, and
upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in
the Indenture.
The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the Holders of not
less than a majority in aggregate principal amount of the
Subordinated Debt Securities at the time Outstanding, as defined
in the Indenture, to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights
B-6
<PAGE>
of the Holders of the Subordinated Debt Securities; provided,
however, that no such supplemental indenture shall, without the
consent of the Holders of each Subordinated Debt Security then
outstanding and so affected: (i) extend the Stated Maturity of
any Subordinated Debt Securities, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of
interest thereon, (ii) change the currency of payment in which
the principal of or interest on any Subordinated Debt Security is
denominated or payable, (iii) impair the right to institute suit
for the enforcement of any payment on or with respect to any
Subordinated Debt Security or (iv) reduce the aforesaid
percentage of Subordinated Debt Securities, the Holders of which
are required to consent to any such supplemental indenture. The
Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Subordinated Debt
Securities at the time outstanding affected thereby, on behalf of
all of the Holders of the Subordinated Debt Securities, to waive
any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the
Indenture with respect to the Subordinated Debt Securities, and
its consequences, except a default in the payment of the
principal of or interest on any of the Subordinated Debt
Securities. Any such consent or waiver by the Registered Holder
of this Subordinated Debt Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Subordinated Debt
Security and of any Subordinated Debt Security issued in exchange
herefor or in place hereof (whether by registration of transfer
or otherwise), irrespective of whether or not any notation of
such consent or waiver is made upon this Subordinated Debt
Security.
No reference herein to the Indenture and no provision
of this Subordinated Debt Security or of the Indenture shall
alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this
Subordinated Debt Security at the time and place and at the rate
and in the money herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this Subordinated Debt Security is
transferable by the Registered Holder hereof on the Security
Register of the Company, upon surrender of this Subordinated Debt
Security for registration of transfer at the Corporate Trust
Office or at any other office or agency of the Company maintained
for that purpose, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the Registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
new Subordinated Debt Securities of authorized denominations and
for the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
B-7
<PAGE>
made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer
of this Subordinated Debt Security, the Company, the Trustee, any
Paying Agent and any Security Registrar may deem and treat the
Registered Holder hereof as the absolute owner hereof (whether or
not this Subordinated Debt Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of
receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the
principal of or the interest on this Subordinated Debt Security,
or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
[IF THE SUBORDINATED DEBT SECURITY IS TO BE A
CERTIFICATED SECURITY, INSERT- The Subordinated Debt Securities
are issuable only in registered form without coupons in minimum
denominations of $25 and any integral multiple thereof.] [IF THE
SUBORDINATED DEBT SECURITY IS TO BE A GLOBAL SECURITY,
INSERT-This Global Security is exchangeable for Subordinated Debt
Securities in definitive form only under certain limited
circumstances set forth in the Indenture. Subordinated Debt
Securities so issued are issuable only in registered form without
coupons in minimum denominations of $25 and any integral multiple
thereof.] As provided in the Indenture and subject to certain
limitations herein and therein set forth, Subordinated Debt
Securities so issued are exchangeable for a like aggregate
principal amount of Subordinated Debt Securities of a different
authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Subordinated Debt Security
which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
THIS SUBORDINATED DEBT SECURITY SHALL FOR ALL PURPOSES
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS
B-8
<PAGE>
PRINCIPLES THEREOF.
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as
though they were written out in full according to applicable laws
or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - ______ Custodian ______
(Cust) (Minor)
Under Uniform Gifts to
Minors Act
______________________________
(State)
Additional abbreviations may also be used though not
in the above list.
----------------
B-9
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and
instructs the Company to repay $ principal amount of the within
Subordinated Debt Security, pursuant to its terms, on the "Put
Option Exercise Date" first occurring after the date of receipt
of the within Subordinated Debt Security as specified below,
together with interest thereon accrued to the date or repayment,
to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the
Indenture, a new Subordinated Debt Security or Subordinated Debt
Securities representing the remaining principal amount of this
Subordinated Debt Security.
For this Option to Elect Repayment to be effective, this
Subordinated Debt Security with the Option to Elect Repayment
duly completed must be received by the Company within the
relevant time period set forth above at its Corporate Trust
Office at _____________, Attention:_____________.
Dated: __________ Signature: __________________________
Note: The signature to this Option to Elect Repayment must
correspond with the name as written upon the face of the within
Subordinated Debt Security in every particular without alteration
or enlargement or any change whatsoever.
----------------
B-10
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip
Code of Assignee
- -----------------------------------------------------------------
the within certificates representing Subordinated Debt Securities
and all rights thereunder, hereby irrevocably constituting and
appointing
_______________________________________________________ attorney
to transfer said certificates representing Subordinated Debt
Securities on the books of Salomon Inc with full power of
substitution in the premises.
Dated: __________________ ______________________
Signature
----------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within certificates
representing Subordinated Debt
Securities in every particular,
without alteration or enlargement
or any change whatsoever.
B-11
<PAGE>
Exhibit 4(k)
- -----------------------------------------------------------------
PLEDGE AGREEMENT
among
SALOMON INC,
THE BANK OF NEW YORK,
as Collateral Agent
and
CHEMICAL BANK,
as Unit Agent
Dated as of June , 1996
- -----------------------------------------------------------------
<PAGE>
PLEDGE AGREEMENT dated as of June , 1996 (this
"Agreement") among Salomon Inc, a Delaware corporation (the
"Company"), The Bank of New York, a New York banking corporation,
as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent"), and
Chemical Bank, a New York banking corporation, as unit agent and
as attorney-in-fact of the Holders (as defined below) from time
to time (in such capacity, together with its successors in such
capacity, the "Unit Agent") under the Unit Agreement (as defined
below).
WHEREAS, the Company and the Unit Agent are parties to
the Unit Agreement dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Unit
Agreement"), pursuant to which there will be issued % Trust
Preferred StockSM (TRUPSSM) Units (the "Units");
WHEREAS, each Unit will consist of (i) a % Preferred
Security (a "Preferred Security") issued by SI Financing Trust I
(the "Trust"), having a stated liquidation amount equal to $25
(the "Stated Amount") and (ii) a related contract (a "Purchase
Contract") requiring the purchase on
, 2021 (or earlier) of one Depositary Share (a
"Depositary Share") representing a one-twentieth interest in a
share of % Cumulative Preferred Stock, Series F, liquidation
preference $500 per share, of the Company at a purchase price of
$25 per Depositary Share; and
WHEREAS, pursuant to the terms of the Unit Agreement
and the Purchase Contracts, the Holders from time to time have
irrevocably authorized the Unit Agent, as attorney-in-fact of
such Holders, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the
Preferred Securities constituting part of such Units and any
Eligible Collateral (as defined below) delivered in exchange
therefor as security for such Holders' obligations under the
related Purchase Contracts.
NOW, THEREFORE, the Company, the Collateral Agent and
the Unit Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural
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<PAGE>
as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to
them in the Unit Agreement: (i) Act, (ii) Board Resolution, (iii)
Cash Settlement, (iv) Certificate, (v) Collateral Settlement,
(vi) Delayed Purchase Date, (vii) Depositary Receipt, (viii)
Early Purchase Date, (ix) Opinion of Counsel, (x) Outstanding,
(xi) Purchase Date, (xii) Purchase Price, (xiii) Repayment Price,
(xiv) Stated Purchase Date, (xv) Subordinated Debt Securities,
(xvi) Termination Event and (xvii) Unitholder; and
(d) the following terms have the meanings assigned to
them in the Declaration: (i) Investment Company Event, (ii)
Liquidation Distribution, (iii) Optional Distribution, (iv)
Property Trustee and (v) Tax Event.
"Agreement" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Applicable Treasury Regulations" means Subpart O--Book-
Entry Procedure of Title 31 of the Code of Federal Regulations
(31 CFR ss. 306.115 et seq.) and any other regulations of the
United States Treasury Department from time to time applicable to
the transfer or pledge of book-entry U.S. Treasury Securities.
"Business Day" means any day that is not a Saturday, a
Sunday or a day on which the New York Stock Exchange or banking
institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to be closed.
"Cash" means (i) any coin or currency of the United
States as at the time shall be legal tender for payment of public
and private debts and (ii) immediately available federal funds
deposited in a trust account for the sole and exclusive benefit
of the Collateral Agent maintained with The Bank of New York (or
any successor Collateral Agent) in its commercial banking
capacity, which funds are on deposit at the Federal Reserve Bank
of New York.
"Code" has the meaning set forth in Section 6.01
hereof.
"Collateral" has the meaning specified in Section 2.01
hereof.
2
<PAGE>
"Collateral Agent" has the meaning specified in the
first paragraph of this instrument.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor shall
have become such, and thereafter "Company" shall mean such
successor.
"Declaration" means the Amended and Restated
Declaration of Trust of the Trust, dated as of the date hereof,
among the Company, as sponsor, the trustees named therein and the
holders from time to time of undivided beneficial interests in
the assets of the Trust.
"Depositary Share" has the meaning specified in the
recitals to this Agreement.
"Eligible Collateral" means (i) Cash and/or (ii) U.S.
Treasury Securities with a maturity at the time of determination
of 30 days or less.
"Extension Period" has the meaning specified in Section
6.02(c) hereof.
"Holder" means a Unitholder or registered holder of a
separated Purchase Contract.
"Intermediary" means an entity that in the ordinary
course of its business maintains securities accounts for others
and is acting in that capacity.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" has the meaning specified in Section 2.01
hereof.
"Pledged Eligible Collateral" has the meaning specified
in Section 2.01 hereof.
"Pledged Preferred Securities" has the meaning
specified in Section 2.01 hereof.
"Preferred Security" has the meaning specified in the
recitals to this Agreement.
"Purchase Contract" has the meaning specified in the
recitals to this Agreement.
"Put Default" has the meaning specified in Section
3
<PAGE>
6.02(c) hereof.
"Stated Amount" has the meaning specified in the
recitals to this Agreement.
"Transfer" means, with respect to the Collateral and
in accordance with the instructions of the Collateral Agent, the
Unit Agent or the Holder of a separated Purchase Contract, as
applicable:
(i) in the case of Cash, payment or delivery by wire
transfer into one or more bank accounts of the
relevant party;
(ii) in the case of Collateral which cannot be
delivered by book-entry or which the parties
agree is to be delivered in physical form,
delivery in appropriate physical form to the
recipient accompanied by any duly executed
instruments of transfer, assignments in blank,
transfer tax stamps and any other documents
necessary to constitute a legally valid transfer
to the recipient;
(iii) in the case of Collateral that is maintained
in the form of entries on the records of a
Federal Reserve Bank or that is held through
a clearing corporation (as defined in the
Code) or its nominee, by (A) causing such
Collateral to be credited to a book-entry
securities account of the recipient or an
Intermediary and (B) causing such
Intermediary, if any, (i) to send to the
recipient confirmation of the transfer of the
relevant interest in such Collateral to the
recipient and (ii) to identify by book-entry
or otherwise such Collateral as subject to
the relevant security interest in favor of
the recipient, or causing such Collateral to
be transferred to the recipient in such other
manner as the recipient may reasonably
request; and
(iv) in the case of other Collateral which can be
delivered by book entry, taking similar steps to
those specified in sub-paragraph (iii) above as
are appropriate to ensure transfer.
"Trust" has the meaning specified in the recitals to
this Agreement.
"Unit" has the meaning specified in the recitals to
4
<PAGE>
this Agreement.
"Unit Agent" has the meaning specified in the first
paragraph of this instrument.
"Unit Agreement" has the meaning specified in the
recitals to this Agreement.
"Value," with respect to any item of Collateral on any
date means, as to (i) a Preferred Security, the Stated Amount,
(ii) Cash, the face amount thereof and (iii) U.S. Treasury
Securities, the aggregate principal amount thereof at maturity.
ARTICLE II
PLEDGE
SECTION 2.01. The Pledge. The Holders from time to
time acting through the Unit Agent, as their attorney-in-fact,
hereby pledge and grant to the Collateral Agent, for the benefit
of the Company, as collateral security for the performance when
due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the
right, title and interest of such Holders in the Preferred
Securities constituting a part of the Units and all proceeds
thereof (including any proceeds from the redemption or repayment
of the Preferred Securities by the Trust) and any Eligible
Collateral delivered in exchange therefor, in each case that have
been Transferred to or received by the Collateral Agent and not
released by the Collateral Agent to such Holders under the
provisions of this Agreement (the "Collateral"). Prior to or
concurrently with the execution and delivery of this Agreement,
the Unit Agent, on behalf of the initial Unitholders, shall cause
the Preferred Securities to be delivered to the Collateral Agent
by book-entry transfer through the facilities of The Depository
Trust Company to the account of the Collateral Agent designated
by it for such purpose. In the event a Unitholder so elects, such
Unitholder may Transfer Eligible Collateral to the Collateral
Agent in exchange for the release by the Collateral Agent of a
Preferred Security to the Unit Agent on behalf of such
Unitholder. Eligible Collateral consisting of U.S. Treasury
Securities shall be Transferred to the Collateral Agent by
book-entry transfer to the account of the Collateral Agent or its
Intermediary with the Federal Reserve Bank of New York in
accordance with the Applicable Treasury Regulations. The
execution and delivery hereof by the Unit Agent and the
Collateral Agent shall constitute (i) the notification to the
Collateral Agent (as bailee or otherwise) of the Pledge and (ii)
an acknowledgment by the Collateral Agent (as third party in
possession or otherwise) (A) of the Pledge and (B) of its holding
of the Collateral subject to the Pledge, in each case, for
purposes of perfecting the Pledge under applicable law or
5
<PAGE>
Applicable Treasury Regulations, including, to the extent
applicable, the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction. The pledge provided in this
Section 2.01 is herein referred to as the "Pledge" and the
Preferred Securities or Eligible Collateral subject to the
Pledge, excluding any Preferred Securities or Eligible Collateral
released from the Pledge as provided in Article IV hereof, are
hereinafter referred to as the "Pledged Preferred Securities" or
the "Pledged Eligible Collateral," respectively. Subject to the
Pledge, the Holders from time to time shall have full beneficial
ownership of the Collateral.
ARTICLE III
DISTRIBUTIONS AND REINVESTMENT
SECTION 3.01. Distributions on Collateral and
Reinvestment of Eligible Collateral. (a) All payments of the
Stated Amount of, or cash distributions on, any Pledged Preferred
Securities and all payments of the principal of, or interest on,
any Pledged Eligible Collateral received by the Collateral Agent
shall be paid by the Collateral Agent by wire transfer in same
day funds:
(i) in the case of (A) cash distributions with respect
to Pledged Preferred Securities and (B) any payments of the
Stated Amount with respect to any Preferred Securities that
have been released from the Pledge pursuant to Article IV
hereof, to the Unit Agent, for the benefit of the relevant
Unitholders, to the account designated by the Unit Agent
for such purpose no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment
is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than
10:30 a.m., New York City time, on the next succeeding
Business Day);
(ii) in the case of (A) interest payments with respect
to Pledged Eligible Collateral and (B) any principal
payments with respect to any Eligible Collateral that has
been released from the Pledge pursuant to Article IV
hereof, to the Holders of the related separated Purchase
Contracts to the accounts designated by them in writing for
such purpose no later than 2:00 p.m., New York City time,
on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment
is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than
10:30 a.m., New York City time, on the next succeeding
Business Day); and
6
<PAGE>
(iii) in the case of payments of the Stated Amount of
any Pledged Preferred Securities or the principal of any
Pledged Eligible Collateral (other than as provided in
Section 3.01(b) hereof), to the Company on the relevant
Payment Date in accordance with the procedure set forth in
Section 6.02(a) or 6.02(b) hereof, in full satisfaction of
the respective obligations of the Holders under the related
Purchase Contracts.
All payments received by the Unit Agent as provided herein shall
be applied by the Unit Agent pursuant to the provisions of the
Unit Agreement. If, notwithstanding the foregoing, the Unit Agent
shall receive any payments of the Stated Amount on account of any
Preferred Security that, at the time of such payment, is a
Pledged Preferred Security or a Holder of a separated Purchase
Contract shall receive any payments of principal on account of
any Eligible Collateral that, at the time of such payment, is
Pledged Eligible Collateral, the Unit Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of
the Company (and promptly deliver over to the Company) for
application to the obligations of the Holders under the related
Purchase Contracts, and the Holders shall acquire no right, title
or interest in any such payments of Stated Amount or principal so
received.
(b) Notwithstanding anything to the contrary in
Section 3.01(a), until the settlement or termination of the
related Purchase Contracts or the reestablishment of Units
consisting of such Purchase Contracts and Preferred Securities,
the Collateral Agent shall reinvest the full amount of the
proceeds of any maturing Pledged Eligible Collateral in Eligible
Collateral maturing on or before the Purchase Date in accordance
with the specific instructions furnished in writing to the
Collateral Agent by the Holder of the related Purchase Contracts
at least one Business Day in advance. In the absence of any
instructions from a Holder, the Collateral Agent shall reinvest
the full amount of the proceeds, to the extent practicable, in
the same type or types of Eligible Collateral originally
deposited with the Collateral Agent by such Holder.
ARTICLE IV
SEPARATION OF PREFERRED SECURITIES, REESTABLISHMENT
OF UNITS AND RELEASE OF COLLATERAL
SECTION 4.01. Separation of Preferred Securities. On
or prior to the 32nd day immediately preceding the Purchase Date,
a Unitholder shall have the right to separate Preferred
Securities from the related Purchase Contracts in integral
multiples of 400 Units by (a) Transferring to the Collateral
Agent Eligible Collateral having a Value equal to the Stated
7
<PAGE>
Amount of the Preferred Securities and (b) delivering the related
Units to the Unit Agent, accompanied by a notice to the Unit
Agent stating that the Unitholder has Transferred Eligible
Collateral to the Collateral Agent pursuant to clause (a) above
and requesting that the Unit Agent instruct the Collateral Agent
to release the Preferred Securities related to such Units. The
Unit Agent shall instruct the Collateral Agent in the form
provided in Exhibit A. Upon receipt of the Eligible Collateral
from the Unitholder and the instruction from the Unit Agent, the
Collateral Agent shall release the Preferred Securities and shall
promptly Transfer such Preferred Securities, free and clear of
any lien, pledge or security interest created hereby, to the Unit
Agent.
SECTION 4.02. Reestablishment of Units. On or prior to
the 32nd day immediately preceding the Purchase Date, a Holder of
separated Purchase Contracts shall have the right to reestablish
transferable Units consisting of the Purchase Contracts and
Preferred Securities in integral multiples of 400 Units by (a)
Transferring Preferred Securities to the Collateral Agent with an
instruction that the Collateral Agent (i) release Eligible
Collateral having a Value equal to the product of the Stated
Amount and the number of related Purchase Contracts and (ii)
notify the Unit Agent of the receipt of the Preferred Securities
and (b) delivering the certificates evidencing the separated
Purchase Contracts to the Unit Agent. Upon receipt of the
Preferred Securities and the instruction from the Holder, the
Collateral Agent shall release the Eligible Collateral requested
by such Holder and shall promptly Transfer such Eligible
Collateral, free and clear of any lien, pledge or security
interest created hereby, to such Holder.
SECTION 4.03. Termination Event. Upon receipt by the
Collateral Agent of notice from the Company or the Unit Agent
that there has occurred a Termination Event, the Collateral Agent
shall release all Collateral from the Pledge and shall promptly
Transfer any Preferred Securities to the Unit Agent and any
Eligible Collateral to the Holders of the related separated
Purchase Contracts, free and clear of any lien, pledge or
security interest created hereby.
SECTION 4.04. Cash Settlement. Upon receipt by the
Collateral Agent of (a) notice from the Unit Agent prior to the
Purchase Date that a Unitholder elects to effect a Cash
Settlement with respect to some or all of such Unitholder's
Purchase Contracts in accordance with the terms of the Purchase
Contracts and the Unit Agreement and (b) payment by such
Unitholder prior to 9:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Date, of the
Purchase Price of such Purchase Contracts by certified check or
wire transfer in immediately available funds payable to or upon
the order of the Company, then the Collateral Agent shall, after
8
<PAGE>
payment of the Purchase Price to the Company on the Purchase
Date, release from the Pledge and promptly Transfer to the Unit
Agent Preferred Securities with a principal amount equal to the
product of the Stated Amount and the number of Purchase Contracts
as to which such Unitholder has elected to effect a Cash
Settlement. The Collateral Agent shall promptly invest any funds
received from a Unitholder in connection with a Cash Settlement
in overnight federal funds and pay such funds to the Company on
the Purchase Date. The Collateral Agent shall distribute any
funds received in respect of the interest earned from the
investment in overnight Federal funds to the Unit Agent on the
Purchase Date, for payment to the relevant Unitholders.
SECTION 4.05. Return of Eligible Collateral. If at any
time the Value of any Pledged Eligible Collateral exceeds the
product of the Stated Amount and the number of related Purchase
Contracts, the Collateral Agent shall, at the written request of
the Holder of such Purchase Contracts, release and promptly
Transfer such excess Eligible Collateral to such Holder, free and
clear of any lien, pledge or security interest created hereby.
ARTICLE V
VOTING RIGHTS
SECTION 5.01. Preferred Securities. The Unit Agent may
exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Preferred
Securities or any part thereof for any purpose not inconsistent
with the terms of this Agreement and in accordance with the terms
of Section 403 of the Unit Agreement; provided, that the Unit
Agent shall not exercise or, as the case may be, shall not
refrain from exercising such right if, in the judgment of the
Company or the Collateral Agent, such action would impair or
otherwise have a material adverse effect on the value of all or
any of the Pledged Preferred Securities; and provided, further,
that the Unit Agent shall give the Company and the Collateral
Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from
exercising, any such right. Upon receipt of any notices and other
communications in respect of any Pledged Preferred Securities,
including notice of any meeting at which holders of Preferred
Securities are entitled to vote or solicitation of consents,
waivers or proxies of holders of Preferred Securities, the
Collateral Agent shall use reasonable efforts to send promptly to
the Unit Agent such notice or communication, and as soon as
reasonably practicable after receipt of a written request
therefor from the Unit Agent, deliver to the Unit Agent such
proxies and other instruments in respect of such Pledged
Preferred Securities (in form and substance satisfactory to the
Collateral Agent) as shall be so requested.
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<PAGE>
ARTICLE VI
RIGHTS AND REMEDIES
SECTION 6.01. Rights and Remedies of Collateral Agent.
(a) The Collateral Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under
the Uniform Commercial Code as in effect in the State of New York
(the "Code") (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, in the event
the Collateral Agent is unable to make payments to the Company on
account of the principal of any Pledged Eligible Collateral as
provided in Section 3.01(a) hereof in satisfaction of the
obligations of the Holder under the related separated Purchase
Contracts, the Collateral Agent shall have and may exercise, with
reference to such Pledged Eligible Collateral and such
obligations of such Holder, any and all of the rights and
remedies available to a secured party under the Code after
default by a debtor, and as otherwise granted herein or under any
other law.
(c) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, the Collateral
Agent is hereby irrevocably authorized to receive and collect all
payments of (i) the Stated Amount of, or cash distributions on,
the Pledged Preferred Securities or (ii) the principal of, or
interest on, the Pledged Eligible Collateral, subject, in each
case, to the provisions of Section 3.01(a) hereof.
(d) The Unit Agent and each Unitholder, in the event
such Unitholder becomes the Holder of a separated Purchase
Contract, agrees that, from time to time, upon the written
request of the Collateral Agent, the Unit Agent or such Holder
shall execute and deliver such further documents and do such
other acts and things as the Collateral Agent may reasonably
request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Unit Agent shall have no liability to any
Holder for executing any documents or taking any such acts
requested by the Collateral Agent hereunder, except for liability
for its own negligent act, its own negligent failure to act or
its own willful misconduct.
SECTION 6.02. Collateral Settlement. (a) Upon
receipt by the Collateral Agent of an instruction from the Unit
Agent prior to the Purchase Date to effect a Collateral
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<PAGE>
Settlement with respect to some or all of a Unitholder's Purchase
Contracts in accordance with the terms of the Purchase Contracts
and the Unit Agreement, the Collateral Agent shall, by 10:00
a.m., New York City time, on the Business Day immediately
preceding the Purchase Date, present the related Preferred
Securities to the Property Trustee for repayment at the Repayment
Price and apply an amount equal to the product of the Stated
Amount and the number of related Purchase Contracts to the
settlement of such Purchase Contracts. The Collateral Agent shall
promptly invest any funds received in respect of the repayment of
the Pledged Preferred Securities in overnight federal funds and
pay such funds to the Company on the Purchase Date. The
Collateral Agent shall distribute any funds received (a) in
excess of the aggregate Purchase Price of the Purchase Contracts
being settled thereby or (b) in respect of the interest earned
from the investment in overnight federal funds to the Unit Agent
on the Purchase Date, for payment to the relevant Unitholders.
In the event the Collateral Agent does not receive any
instruction from the Unit Agent to effect a Collateral Settlement
with respect to any Purchase Contract, and a Unitholder has not
made an effective Cash Settlement of such Purchase Contract, the
Collateral Agent shall settle such Purchase Contract in the
manner provided in this Section 6.02(a).
(b) Without receiving any instruction from the Holder
of separated Purchase Contracts, the Collateral Agent shall
automatically apply the proceeds of the related Eligible
Collateral to the settlement of such Purchase Contracts on the
Purchase Date. During the 30 days immediately prior to the
Purchase Date, the Collateral Agent shall reinvest any maturing
Eligible Collateral in instruments maturing no later than the
Business Day immediately prior to the Purchase Date. On the
Business Day immediately prior to the Purchase Date, the
Collateral Agent shall invest the maturing Eligible Collateral in
overnight federal funds and pay such funds to the Company on the
Purchase Date.
In the event the sum of the proceeds from the related
Eligible Collateral and the interest earned from the investment
in overnight federal funds is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the
Collateral Agent shall distribute such excess to the Holder of
the related Purchase Contracts on the Purchase Date.
(c) If, when the Collateral Agent presents any
Preferred Securities for repayment in connection with the
settlement of the related Purchase Contracts, such Preferred
Securities are not repaid in accordance with their terms (a "Put
Default"), and such Put Default shall continue for more than two
Business Days (the "Extension Period"), (i) if the Purchase Date
11
<PAGE>
is an Early Purchase Date, the Collateral Agent shall (A)
promptly return any payments deposited by Unitholders to effect a
Cash Settlement to the Unit Agent and (B) reinvest any proceeds
received from Pledged Eligible Collateral in accordance with the
written instructions of the Holder of the related Purchase
Contracts or, in the absence of such instructions, to the extent
possible, in the same type or types of Eligible Collateral
originally deposited with the Collateral Agent and (ii) if the
Purchase Date is the Stated Purchase Date, a Termination Event
will be deemed to have occurred under the Unit Agreement and upon
receipt of notice from the Company or the Unit Agent of such
Termination Event, the Collateral Agent shall release any
Preferred Securities to the Unit Agent and any Eligible
Collateral to the Holder of the related separated Purchase
Contracts as provided in Section 4.03 hereof. During any
Extension Period and until settlement on the Delayed Purchase
Date, if any, the Collateral Agent shall invest any payments
deposited to effect a Cash Settlement and any proceeds received
from Pledged Eligible Collateral or any repaid Preferred
Securities in overnight federal funds.
SECTION 6.03. Tax Event, Investment Company Event,
etc. (a) In the event the Collateral Agent receives Subordinated
Debt Securities in respect of Pledged Preferred Securities upon
the occurrence of a Tax Event, Investment Company Event, Optional
Distribution or liquidation of the Trust, the Collateral Agent
shall hold the Subordinated Debt Securities to secure the
obligations to purchase Depositary Shares under the related
Purchase Contracts. Thereafter, the Collateral Agent shall have
such rights and obligations with respect to the Subordinated Debt
Securities that it had in respect of the Pledged Preferred
Securities as provided in Articles III, IV, V and VI hereof.
(b) In the event the Collateral Agent receives cash
distributions in respect of Pledged Preferred Securities upon the
redemption of the Subordinated Debt Securities at the option of
the Company, including as the result of a Tax Event, or receives
cash distributions or other property upon a Liquidation
Distribution in connection with a liquidation of the Trust in
accordance with the terms of the Declaration, a Termination Event
will be deemed to have occurred under the Unit Agreement and upon
receipt of notice from the Company or the Unit Agent of such
Termination Event, the Collateral Agent shall distribute such
cash distribution or other property to the Unit Agent and shall
release any Eligible Collateral to the Holders of the separated
Purchase Contracts as provided in Section 4.03 hereof.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS
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<PAGE>
SECTION 7.01. Representations and Warranties. The
Holders from time to time, acting through the Unit Agent as their
attorney-in-fact (it being understood that the Unit Agent shall
not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the
Collateral Agent, which representations and warranties shall be
deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral
delivered in physical form, is the sole holder of
such Collateral and is the sole beneficial owner
of, or has the right to Transfer, the Collateral
it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance,
calls, liabilities to pay money or other
restrictions other than the security interest and
lien granted under Section 2.01 hereof;
(c) upon the Transfer of the Collateral to the
Collateral Agent, the Collateral Agent will have a
valid and perfected first priority security
interest therein (assuming that any central
clearing operation or any Intermediary or other
entity not within the control of the Holder
involved in the Transfer of the Collateral gives
the notices and takes the action required of it
under applicable law for perfection of that
interest); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result
in the creation of any security interest, lien or
other encumbrance on the Collateral other than the
security interest and lien granted under Section
2.01 hereof or violate any provision of any
existing law or regulation applicable to it or of
any mortgage, charge, pledge, indenture, contract
or undertaking to which it is a party or which is
binding on it or any of its assets.
SECTION 7.02. Covenants. The Holders from time to
time, acting through the Unit Agent as their attorney-in-fact (it
being understood that the Unit Agent shall not be liable for any
covenant made by or on behalf of a Holder), hereby covenant to
the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:
(a) such Holders will not create or purport to create
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<PAGE>
or allow to subsist any mortgage, charge, lien,
pledge or any other security interest whatsoever
over the Collateral or any part of it; and
(b) such Holders will not sell or otherwise dispose
(or attempt to dispose) of the Collateral or any
part of it.
ARTICLE VIII
THE COLLATERAL AGENT
The Collateral Agent and the Company hereby agree
between themselves as follows (it being understood and agreed
that neither the Unit Agent nor any Holder shall have any rights
under this Article VIII):
SECTION 8.01. Appointment, Powers and Immunities. The
Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Collateral
Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against the
Collateral Agent, nor shall the Collateral Agent have any
fiduciary duty hereunder, nor shall the Collateral Agent be bound
by the provisions of any agreement by any party hereto beyond the
specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or
other document referred to or provided for in, or received by it
under, this Agreement, the Units or the Unit Agreement, or for
the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement (other than as against the
Collateral Agent), the Units or the Unit Agreement or any other
document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral
Agent) to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except pursuant to
directions furnished under Section 8.02 hereof); (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith or therewith,
except for its own negligence; and (e) shall not be required to
advise any party as to selling or retaining, or taking or
refraining from taking any action with respect to, any securities
or other property deposited hereunder. Subject to the foregoing,
during the term of this Agreement the Collateral Agent shall take
all reasonable action in connection with the safe keeping and
preservation of the Collateral hereunder.
14
<PAGE>
No provision of this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent be
liable for any amount in excess of the Value of the Collateral.
SECTION 8.02. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, to direct the
time, method and place of conducting any proceeding for any right
or remedy available to the Collateral Agent, or of exercising any
power conferred on the Collateral Agent, or to direct the taking
or refraining from taking of any action authorized by this
Agreement; provided, however, that (i) such direction shall not
conflict with the provisions of any law or of this Agreement and
(ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing in this Section 8.02 shall impair the
right of the Collateral Agent in its discretion to take any
action or omit to take any action which it deems proper and which
is not inconsistent with such direction.
SECTION 8.03. Reliance by Collateral Agent. The
Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other
communication (including, without limitation, any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected
by the Collateral Agent. As to any matters not expressly provided
for by this Agreement, the Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
SECTION 8.04. Rights in Other Capacities. The
Collateral Agent and its affiliates may (without having to
account therefor to the Company) accept deposits from, lend money
to, make investments in and generally engage in any kind of
banking, trust or other business with the Unit Agent and any
Holder (and any of their subsidiaries or affiliates) as if it
were not acting as the Collateral Agent, and the Collateral Agent
and its affiliates may accept fees and other consideration from
the Unit Agent and any Holder (and shall accept such fees from a
Holder in the case of its services as Collateral Agent in
connection with any Eligible Collateral) without having to
account for the same to the Company, provided that the Collateral
Agent covenants and agrees with the Company that the Collateral
Agent shall not accept, receive or permit there to be created in
its favor any security interest, lien or other encumbrance of any
kind in or upon the Collateral.
15
<PAGE>
SECTION 8.05. Non-Reliance on Collateral Agent. The
Collateral Agent shall not be required to keep itself informed as
to the performance or observance by the Unit Agent or any Holder
of this Agreement, the Unit Agreement, the Units or any other
document referred to or provided for herein or therein or to
inspect the properties or books of the Unit Agent or any Holder.
The Collateral Agent shall not have any duty or responsibility to
provide the Company with any credit or other information
concerning the affairs, financial condition or business of the
Unit Agent or any Holder (or any of their affiliates) that may
come into the possession of the Collateral Agent or any of its
affiliates.
SECTION 8.06. Compensation and Indemnity. The Company
agrees: (i) to pay the Collateral Agent from time to time such
compensation as shall be agreed in writing between the Company
and the Collateral Agent for all services rendered by it
hereunder and (ii) to indemnify the Collateral Agent for, and to
hold it harmless against, any and all loss, damage, claim,
liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of such powers and duties; provided, however, that the Company
shall not be responsible for any such fees or expenses of the
Collateral Agent for its services as Collateral Agent for any
Eligible Collateral.
SECTION 8.07. Failure to Act. In the event of any
ambiguity in the provisions of this Agreement or any dispute
between or conflicting claims by or among the undersigned and/or
any other person or entity with respect to any funds or property
deposited hereunder, the Collateral Agent shall be entitled, at
its sole option, to refuse to comply with any and all claims,
demands or instructions with respect to such property or funds so
long as such dispute or conflict shall continue, and the
Collateral Agent shall not be or become liable in any way to any
of the undersigned for its failure or refusal to comply with such
conflicting claims, demands or instructions. The Collateral Agent
shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by
agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or (ii) the
Collateral Agent shall have received security or an indemnity
satisfactory to the Collateral Agent sufficient to save the
Collateral Agent harmless from and against any and all loss,
liability, damage, claim or expense which the Collateral Agent
may incur by reason of its acting. The Collateral Agent may in
addition elect to commence an interpleader action or seek other
judicial relief or orders as the Collateral Agent may deem
16
<PAGE>
necessary. Notwithstanding anything contained herein to the
contrary, the Collateral Agent shall not be required to take any
action that is in its opinion contrary to law or to the terms of
this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
SECTION 8.08. Resignation of Collateral Agent. Subject
to the appointment and acceptance of a successor Collateral Agent
as provided below, (a) the Collateral Agent may resign at any
time by giving notice thereof to the Company, the Unit Agent and
any Holders of separated Purchase Contracts, (b) the Collateral
Agent may be removed at any time by the Company and (c) if the
Collateral Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than
20 days after receiving notice of such failure by the Unit Agent
and such failure shall be continuing, the Collateral Agent may be
removed by the Unit Agent at the direction of the Holders of not
less than a majority of the combined number of Outstanding Units
and separated Purchase Contracts voting together as one class, by
Act of said Holders delivered to the Unit Agent. The Unit Agent
shall promptly notify the Company of any removal of the
Collateral Agent pursuant to clause (c) of the immediately
preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral
Agent. If no successor Collateral Agent shall have been so
appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent
may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent. The Collateral Agent
shall be a bank which has an office in New York, New York with a
combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Collateral Agent hereunder by a
successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent,
and the retiring Collateral Agent shall, upon payment of all
amounts owed to it hereunder, take all appropriate action to
transfer any money and property held by it hereunder (including
the Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from
its duties and obligations as Collateral Agent hereunder. After
any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Article VIII shall
continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Collateral Agent.
Promptly following the removal or resignation of the
Collateral Agent the Company shall give written notice thereof to
Moody's Investors Services, Inc.
17
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SECTION 8.09. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or
advisors (including counsel of its selection) in connection with
any of its duties hereunder, and the Collateral Agent shall not
be liable for any action taken or omitted by, or in reliance upon
the advice of, such agents or advisors selected in good faith.
The appointment of agents pursuant to this Section 8.09 shall be
subject to the prior consent of the Company, which consent shall
not be unreasonably withheld.
The provisions of this Article VIII shall survive
termination of this Agreement and the resignation or removal of
the Collateral Agent.
ARTICLE IX
MODIFICATION
SECTION 9.01. Modification Without Consent of Holders.
Without the consent of any Holders, the Company, the Collateral
Agent and the Unit Agent, at any time and from time to time, may
modify this Agreement, in form satisfactory to the Company, the
Collateral Agent and the Unit Agent, for any of the following
purposes:
(a) to evidence the succession of another Person to
the Company, and the assumption by any such successor of the
covenants of the Company; or
(b) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(c) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent or Unit
Agent; or
(d) to cure any ambiguity, to correct or supplement
any provisions herein which may be inconsistent with any other
such provisions herein, or to make any other provisions with
respect to such matters or questions arising under this
Agreement, provided such action shall not adversely affect the
interests of the Holders.
SECTION 9.02. Modification With Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of the
combined number of the Units and separated Purchase Contracts at
the time Outstanding voting together as one class, by Act of said
Holders delivered to the Company, the Unit Agent and the
Collateral Agent, the Company, when authorized by a Board
Resolution, the Unit Agent and the Collateral Agent may modify in
any manner the terms of this Agreement or the rights of the
18
<PAGE>
Holders in respect of the Units; provided, however, that no such
modification shall, without the consent of the Holder of each
Outstanding Unit or separated Purchase Contract affected thereby:
(a) increase the amount or decrease the types of
Collateral required to be pledged to secure a Holder's
obligations under a Purchase Contract, impair the right of the
Holder of any Purchase Contract to receive distributions on the
related Collateral or otherwise adversely affect the Holder's
rights in or to such Collateral; or
(b) otherwise effect any action that would require the
consent of the Holder of each Outstanding Unit or separated
Purchase Contract affected thereby pursuant to the Unit Agreement
if such action were effected by an agreement supplemental
thereto; or
(c) reduce the percentage of Outstanding Units and
separated Purchase Contracts, the consent of whose Holders is
required for any such modification or amendment; or
(d) materially and adversely alter the rights of the
holders of Preferred Securities.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
amendment or modification, but it shall be sufficient if such Act
shall approve the substance thereof.
SECTION 9.03. Execution of Amendments. In executing
any amendment permitted by this Section, the Collateral Agent and
the Unit Agent shall be entitled to receive and (subject to
Section 8.03 hereof, with respect to the Collateral Agent, and
Section 703 of the Unit Agreement, with respect to the Unit
Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such
amendment have been satisfied. Each of the Unit Agent and the
Collateral Agent may refuse to sign any amendment that adversely
affects its rights or duties hereunder.
SECTION 9.04. Effect of Amendments. Upon the execution
of any amendment under this Section, this Agreement shall be
modified in accordance therewith, and such amendment shall form a
part of this Agreement for all purposes; and every Holder of
Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered under the Unit Agreement
shall be bound thereby.
SECTION 9.05. Reference to Amendments. Certificates
authenticated, executed on behalf of the Holders and delivered
19
<PAGE>
after the execution of any amendment pursuant to this Section
may, and shall if required by the Collateral Agent or the Unit
Agent, bear a notation in form approved by the Unit Agent and the
Collateral Agent as to any matter provided for in such amendment.
If the Company shall so determine, new Certificates so modified
as to conform, in the opinion of the Collateral Agent, the Unit
Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Unit Agent in accordance with
the Unit Agreement in exchange for Outstanding Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. No Waiver. No failure on the part of
the Collateral Agent or any of its agents to exercise, and no
course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies
herein are cumulative and are not exclusive of any remedies
provided by law.
SECTION 10.02. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF. The Company, the Collateral Agent and the
Holders from time to time, acting through the Unit Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction
of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from
time to time, acting through the Unit Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient
forum.
SECTION 10.03. Notices. All notices, requests,
consents and other communications provided for herein (including,
without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) and delivered to the
intended recipient, if to the Company, at Seven World Trade
Center, New York, New York 10048, Attention: ; if to the Unit
Agent, at 450 West 33rd Street, 15th Floor, New
20
<PAGE>
York, New York 10001, Attention: Corporate Trustee Administration
Department; if to the Collateral Agent at 101 Barclay Street,
Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration; and if to a Holder of separated
Purchase Contracts, at the address provided by such Holder in
writing to the Collateral Agent or the address set forth in the
register of separated Purchase Contracts maintained by the Unit
Agent; or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except
as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 10.04. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Collateral Agent, the
Unit Agent and any Holder of separated Purchase Contracts, and
the Holders from time to time, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions
hereof and to have ratified the agreements of, and the grant of
the Pledge hereunder by, the Unit Agent.
SECTION 10.05. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such
counterpart.
SECTION 10.06. Severability. If any provision hereof
is invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions
of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
SECTION 10.07. Expenses, etc. The Company agrees to
reimburse the Collateral Agent for: (a) all reasonable
out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and expenses
of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance
of this Agreement and (ii) any modification, supplement or waiver
of any of the terms of this Agreement; (b) all reasonable costs
and expenses of the Collateral Agent (including, without
limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or
incurred in connection with causing any Unitholder to satisfy its
obligations
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<PAGE>
under the Purchase Contracts forming a part of the Units and (ii)
the enforcement of this Section 10.07; and (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of
this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection
of any security interest contemplated hereby.
Holders of separated Purchase Contracts shall be
responsible for all fees and expenses payable to the Collateral
Agent for its services as Collateral Agent for the Eligible
Collateral.
SECTION 10.08. Security Interest Absolute. All rights
of the Collateral Agent and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Units or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment
of, or any other term of, or any increase in the amount of, all
or any of the obligations of Holders under the related Purchase
Contracts, or any other amendment or waiver of any term of, or
any consent to any departure from any requirement of, the Unit
Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or
(c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a borrower, a
guarantor or a pledgor.
SECTION 10.09. Limitation of Liability of Unit Agent.
For all purposes of this Agreement, in the performance of its
duties or obligations hereunder, the Unit Agent shall be subject
to, and entitled to the benefits of, the terms and provisions of
Article Seven of the Unit Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first
above written.
SALOMON INC
By:________________________________
Name:
Title:
CHEMICAL BANK,
as Unit Agent and as
attorney-in-fact of the Holders
from time to time
By:________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Collateral Agent
By:________________________________
Name:
Title:
23
<PAGE>
EXHIBIT A
INSTRUCTION TO COLLATERAL AGENT
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: % Trust Preferred StockSM (TRUPSSM) Units (the
"Units") consisting of % Preferred Securities (the
"Preferred Securities") of SI Financing Trust I
and Purchase Contracts (the "Purchase Contracts")
of Salomon Inc (the "Company")
Chemical Bank (the "Unit Agent") hereby notifies you
(the "Collateral Agent"), with reference to the Pledge Agreement
dated as of June , 1996 (the "Pledge Agreement"; any capitalized
term used herein and not defined shall have its respective
meaning set forth in the Pledge Agreement) among the Company, the
Collateral Agent and the Unit Agent, as unit agent and as
attorney-in-fact of the Holders from time to time, pursuant to
which the Unit Agent, on behalf of such Holders, has pledged the
Preferred Securities constituting part of the Units as security
for such Holders' obligations under the related Purchase
Contracts, that [Unitholder] (the "Unitholder") has elected to
separate Preferred Securities from the related Purchase Contracts
under the Pledge Agreement and has delivered
Units to the Unit Agent, together with a notice stating
that the Unitholder has Transferred Eligible Collateral to the
Collateral Agent. The Unit Agent hereby instructs the Collateral
Agent, upon receipt of such Eligible Collateral, to release the
Preferred Securities related to such Units to the Unitholder in
accordance with the Unitholder's instructions.
IN WITNESS WHEREOF, the undersigned, on behalf of the
Unit Agent, has executed and delivered this Instruction as of the
day of , .
CHEMICAL BANK
By:_________________________________
Name:
Title:
A-1
<PAGE>
Exhibit 4(l)
- -----------------------------------------------------------------
UNIT AGREEMENT
between
SALOMON INC
and
CHEMICAL BANK,
as Agent
Dated as of , 1996
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 101. Definitions
SECTION 102. Compliance Certificates and Opinions
SECTION 103. Form of Documents Delivered to Agent
SECTION 104. Acts of Holders
SECTION 105. Notices, Etc
SECTION 106. Notice to Holders; Waiver
SECTION 107. Effect of Headings and Table of Contents
SECTION 108. Successors and Assigns
SECTION 109. Separability Clause
SECTION 110. Benefits of Agreement
SECTION 111. Governing Law
SECTION 112. Legal Holidays
SECTION 113. Counterparts
SECTION 114. Inspection of Agreement
SECTION 115. Expenses
ARTICLE II CERTIFICATE FORMS
SECTION 201. Forms of Certificates Generally
SECTION 202. Form of Agent's Certificate of
Authentication
ARTICLE III THE UNITS AND SEPARATED PURCHASE CONTRACTS
SECTION 301. Title and Terms; Denominations
SECTION 302. Rights and Obligations Evidenced by
the Certificates
SECTION 303. Execution, Authentication, Delivery
and Dating
SECTION 304. Temporary Certificates
SECTION 305. Registration of Transfer and Exchange
SECTION 306. Book-Entry Interests
SECTION 307. Notices to Holders
SECTION 308. Appointment of Successor Clearing Agency
SECTION 309. Definitive Unit Certificates
SECTION 310. Mutilated, Destroyed, Lost and Stolen
Certificates
SECTION 311. Persons Deemed Owners
SECTION 312. Cancellation
SECTION 313. Separation of Unit
SECTION 314. Reestablishment of a Unit
ARTICLE IV THE PREFERRED SECURITIES
SECTION 401. Payment of Distribution; Rights to
Distributions Preserved
SECTION 402. Transfer of Preferred Securities upon
Occurrence of Termination Event;
<PAGE>
Payment of Redemption Price
or Liquidation Distribution
SECTION 403. Notice and Voting
SECTION 404. Distribution of Subordinated Debt
Securities
ARTICLE V THE PURCHASE CONTRACTS
SECTION 501. Purchase of Depositary Share;
Acceleration of Purchase Obligation
SECTION 502. Contract Fee
SECTION 503. Payment of Purchase Price
SECTION 504. Issuance of Shares and Depositary
Receipts
SECTION 505. Charges and Taxes
SECTION 506. Termination Event; Notice
ARTICLE VI REMEDIES
SECTION 601. Unconditional Right of Holder to
Receive Contract Fee and to
Purchase Depositary Share
SECTION 602. Restoration of Rights and Remedies
SECTION 603. Rights and Remedies Cumulative
SECTION 604. Delay or Omission Not Waiver
SECTION 605. Undertaking for Costs
SECTION 606. Waiver of Stay or Extension Laws
ARTICLE VII THE AGENT
SECTION 701. Certain Duties and Responsibilities
SECTION 702. Notice of Default
SECTION 703. Certain Rights of Agent
SECTION 704. Not Responsible for Recitals or
Issuance of Units or Separated
Purchase Contracts
SECTION 705. May Hold Units or Separated Purchase
Contracts
SECTION 706. Money Held in Trust
SECTION 707. Compensation and Reimbursement
SECTION 708. Corporate Agent Required; Eligibility
SECTION 709. Resignation and Removal; Appointment
of Successor
SECTION 710. Acceptance of Appointment by Successor
SECTION 711. Merger, Conversion, Consolidation or
Succession to Business
SECTION 712. Preservation of Information;
Communications to Holders
SECTION 713. No Obligations of Agent
SECTION 714. Tax Compliance
ARTICLE VIII SUPPLEMENTAL AGREEMENTS
SECTION 801. Supplemental Agreements without Consent
of Holders
SECTION 802. Supplemental Agreements with Consent of
Holders
SECTION 803. Execution of Supplemental Agreements
SECTION 804. Effect of Supplemental Agreements
SECTION 805. Reference to Supplemental Agreements
<PAGE>
ARTICLE IX CONSOLIDATION, MERGER, SALE, TRANSFER OR LEASE
SECTION 901. Covenant Not to Merge, Consolidate, Sell,
Transfer or Lease Property Except
under Certain Conditions
SECTION 902. Rights and Duties of Successor
Corporation
ARTICLE X COVENANTS
SECTION 1001. Performance under Purchase Contracts
SECTION 1002. Maintenance of Office or Agency
SECTION 1003. Company to Reserve Series F Preferred
Stock
SECTION 1004. Covenants as to Series F Preferred
Stock
SECTION 1005. Statements of Officers of the Company
as to Default
EXHIBIT A -- Form of Unit Certificate
EXHIBIT B -- Form of Separated Purchase Contract
Certificate
EXHIBIT C -- Instruction to Collateral Agent
<PAGE>
UNIT AGREEMENT, dated as of , 1996, between
Salomon Inc, a Delaware Corporation (the "Company"), and Chemical
Bank, a New York banking corporation, as Agent (the "Agent"),
acting as agent for the Unitholders and Holders of Separated
Purchase Contracts from time to time.
WHEREAS, the Company has duly authorized the execution
and delivery of this Agreement and the Unit Certificates
evidencing the Units; and
WHEREAS, all acts necessary to make the Purchase
Contracts, when the Unit Certificates are executed by the Company
and authenticated, executed on behalf of the Holders and
delivered by the Agent, as provided in this Agreement, the valid
obligations of the Company, and to constitute these presents a
valid agreement of the Company, in accordance with its terms,
have been done.
NOW THEREFORE, in consideration of the premises and the
purchase of the Units by the Holders thereof, it is mutually
agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as
well as the singular;
(b) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles in the United
States;
(c) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other
subdivision;
(d) the following terms have the meanings given to
them in the Declaration: (i) Indenture; (ii) Investment
Company Event; (iii) Liquidation Distribution; (iv) Optional
Distribution; and (v) Tax Event; and
(e) the following terms have the meanings given to
them in this Section 101(d):
<PAGE>
"Acceleration Notice" has the meaning specified in
Section 501(b).
"Act," with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control," with
respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent" means the Person named as the "Agent" in the
first paragraph of this instrument until a successor Agent shall
have become such pursuant to the applicable provisions of this
Agreement, and thereafter "Agent" shall mean such Person.
"Agreement" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Bankruptcy Event" means any of the following events
(whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body): (a) (i) a decree or order by a court having jurisdiction
in the premises shall have been entered adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect; (ii) a decree or order of a court having jurisdiction in
the premises for the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of the Company or
of its property, or for the winding up or liquidation of its
affairs, shall have been entered; or (iii) the Company shall
institute proceedings to be adjudicated a bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent seeking reorganization
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due.
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<PAGE>
"Board or Directors" means the board of directors of
the Company or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the
Board of Directors, a copy of which has been certified by the
Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of
such certification, and delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a
Global Unit Certificate, ownership and transfers of which shall
be maintained and made through book entries by a Clearing Agency
as described in Section 306.
"Business Day" means any day which is not a Saturday or
Sunday or a day on which the NYSE or banking institutions or
trust companies in The City of New York are authorized or
obligated by law or executive order to be closed.
"Cash Settlement" has the meaning set forth in Section
503(a)(i).
"Certificate" means a Unit Certificate or a Separated
Purchase Contract Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as a depositary for the Units and in whose name or
in the name of a nominee of that organization, shall be
registered a Global Unit Certificate and which shall undertake to
effect book entry transfers and pledges of the Units.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
"Collateral Agent" means The Bank of New York, as
collateral agent under the Pledge Agreement, or any successor
thereto.
"Collateral Settlement" has the meaning set forth in
Section 503(a)(ii).
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor
organization or company shall have become such, and thereafter
the "Company" shall mean such successor organization or company.
"Contract Fee" means the fee payable by the Company in
respect of each Purchase Contract, equal to % per annum of the
Stated Amount, computed on the basis of a 360-day year consisting
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<PAGE>
of 12 months of 30 days.
"Corporate Trust Office" means the principal office of
the Agent, at which at any particular time its corporate trust
business shall be administered, which office at the date hereof
is located at 450 West 33rd Street, Corporate Trust
Administration - 15th Floor, New York, New York 10001.
"Declaration" means the Amended and Restated
Declaration of Trust of the Trust, dated as of , 1996, among the
Company, as Sponsor, the trustees named therein and the holders
from time to time of individual beneficial interests in the
assets of the Trust.
"Delayed Purchase Date" has the meaning specified in
Section 503(b).
"Deposit Agreement" means the Deposit Agreement dated
as of 1996 by and among the Company, the Depositary and the
holders from time to time of the Depositary Receipts issued
thereunder.
"Depositary" means First Chicago Trust Company of New
York, as depositary under the Deposit Agreement, or any successor
thereto.
"Depositary Receipt" means any one of the receipts
evidencing an interest in the Depositary Shares issued under the
Deposit Agreement.
"Depositary Share" means any one of the Depositary
Shares, each evidencing a one-twentieth interest in a share of
% Cumulative Preferred Stock, Series F, liquidation
preference $500 per share (the "Series F Preferred Stock"), of
the Company, held by the Depositary under the Deposit Agreement
and evidenced by a Depositary Receipt.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Early Purchase Date" has the meaning specified in
Section 501(b).
"Eligible Collateral" means (i) cash and/or (ii) U.S.
Treasury Securities with a maturity at the time of determination
of 30 days or less.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, or any successor statute.
"Expiration Date" has the meaning specified in Section
104.
4
<PAGE>
"Extension Period" has the meaning specified in Section
503(b).
"Global Unit Certificate" means a Unit Certificate that
evidences all or part of the Units and is registered in the name
of a Clearing Agency or a nominee thereof.
"Holder" means a Unitholder or any Person in whose name
a Separated Purchase Contract is registered in the Separated
Purchase Contract Register.
"Indenture Trustee" means Bankers Trust Company, as
trustee under the Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written
order or request signed by the Chairman of the Board, any Vice
Chairman, the President or a Vice President of the Company and by
the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company and delivered to the Agent.
"NYSE" means the New York Stock Exchange, Inc.
"Officers' Certificate" means a certificate signed by
the Chairman of the Board, any Vice Chairman, the President or
any Vice President of the Company and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed
by legal counsel acceptable to the Agent, who may be an employee
of or counsel to the Company, that is delivered to the Agent.
"Outstanding," with respect to any Unit or Separated
Purchase Contract, means, as of the date of determination, all
Units or Separated Purchase Contracts evidenced by Unit
Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) If a Termination Event has occurred, (A) Separated
Purchase Contracts and (B) Units for which the Redemption
Price of the underlying Preferred Security or a Liquidation
Distribution in respect of such Preferred Security has been
theretofore deposited with the Agent in trust for the
Holders of such Units;
(ii) Units and Separated Purchase Contracts evidenced
by Certificates theretofore canceled by the Agent or
delivered to the Agent for cancellation or deemed canceled
pursuant to the provisions of this Agreement; and
(iii) Units and Separated Purchase Contracts
evidenced by Certificates in exchange for or in lieu of
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<PAGE>
which other Certificates have been authenticated, executed
on behalf of the Holder and delivered pursuant to this
Agreement, other than any such Certificate in respect of
which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona
fide purchaser in whose hands the Units or Separated
Purchase Contracts evidenced by such Certificate are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Units or Separated Purchase Contracts
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Units or Separated Purchase
Contracts owned by the Company or any Affiliate of the Company
shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Units or Separated Purchase
Contracts which a Responsible Officer of the Agent knows to be so
owned shall be so disregarded. Units or Separated Purchase
Contracts so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the
satisfaction of the Agent the pledgee's right so to act with
respect to such Units or Separated Purchase Contracts and that
the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each , , and , commencing , 1996.
"Person" means any individual, company, partnership,
joint venture, limited liability company, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" means the pledge under the Pledge Agreement of
the Preferred Securities constituting a part of the Units or the
Eligible Collateral.
"Pledge Agreement" means the pledge Agreement, dated as
of the date hereof, by and among the Company, the Collateral
Agent and the Agent, on its own behalf and as attorney-in-fact
for the Holders from time to time.
"Predecessor Certificate" means a Predecessor Unit
Certificate or a Predecessor Separated Purchase Contract
Certificate.
"Predecessor Separated Purchase Contract Certificate"
of any particular Separated Purchase Contract Certificate means
every previous Separated Purchase Contract Certificate evidencing
all or a portion of the rights and obligations of the Company and
the Holder under the Separated Purchase Contracts evidenced
6
<PAGE>
thereby; and, for the purposes of this definition, any Separated
Purchase Contract Certificate authenticated and delivered under
Section 310 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Separated Purchase Contract Certificate shall be
deemed to evidence the same rights and obligations of the Company
and the Holder as the mutilated, destroyed, lost or stolen
Separated Purchase Contract Certificate.
"Predecessor Unit Certificate" of any particular Unit
Certificate means every previous Unit Certificate evidencing all
or a portion of the rights and obligations of the Company and the
Holder under the Units evidenced thereby; and, for the purposes
of this definition, any Unit Certificate authenticated and
delivered under Section 310 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Unit Certificate shall be
deemed to evidence the same rights and obligations of the Company
and the Holder as the mutilated, destroyed, lost or stolen Unit
Certificate.
"Preferred Securities" means the % Preferred Securities
of the Trust, each having a stated liquidation amount of $25 (the
"Stated Amount"), representing preferred undivided beneficial
interests in the assets of the Trust.
"Property Trustee" means Chemical Bank, as property
trustee under the Declaration, or any successor thereto that is a
financial institution unaffiliated with the Company.
"Purchase Contract" means, when used with respect to
any Unit or Separated Purchase Contract, the contract obligating
the Company to sell and the Holder of such Unit or Separated
Purchase Contract to purchase a Depositary Share on the terms and
subject to the conditions set forth in Article Five hereof.
"Purchase Date" has the meaning specified in Section
501(b).
"Purchase Price" has the meaning specified in Section
501(a).
"Put Default" has the meaning specified in Section
503(b).
"Record Date" means the fifteenth day immediately
preceding a Payment Date, whether or not a Business Day.
"Redemption Price" means, with respect to a Preferred
Security, the Stated Amount thereof plus any accrued and unpaid
distributions thereon to the date of redemption (subject to the
rights of holders of record on the relevant record date to
receive distributions due on a Payment Date).
7
<PAGE>
"Repayment Price" means, with respect to a Preferred
Security, the Stated Amount plus any accrued and unpaid
distributions thereon to the date of repayment (subject to the
rights of holders of record on the relevant record date to
receive distributions due on a Payment Date).
"Register" means the Unit Register and the Separated
Purchase Contract Register.
"Registrar" means the Unit Registrar and the Separated
Purchase Contract Registrar.
"Responsible Officer," when used with respect to the
Agent, means any officer assigned by the Agent to administer this
Agreement.
"Separated Purchase Contract" means the collective
rights and obligations of a Holder of a Separated Purchase
Contract Certificate in respect of a Purchase Contract.
"Separated Purchase Contract Certificate" means a
certificate evidencing the rights and obligations of a Holder in
respect of the number of Separated Purchase Contracts specified
on such certificate.
"Separated Purchase Contract Register" and "Separated
Purchase Contract Registrar" have the respective meanings
specified in Section 305.
"Series F Preferred Stock" has the meaning set forth in
the definition of "Depositary Share" set forth in this Article.
"Stated Amount" has the meaning set forth in the
definition of "Preferred Securities" set forth in this Article.
"Stated Purchase Date" means , 2021.
"Subordinated Debt Securities" means the series of
subordinated debt securities of the Company designated the %
Subordinated Debt Securities due , 2026 to be issued under the
Indenture as of the date hereof.
"Termination Date" means date, if any, on which a
Termination Event occurs.
"Termination Event" means any of the following events:
(i) the occurrence of a Bankruptcy Event at any time on or prior
to the Stated Purchase Date, (ii) the occurrence of a Put Default
that continues for more than two Business Days in connection with
the settlement of the Purchase Contracts at the Stated Purchase
Date, (iii) a default in the payment of any Contract Fee, when it
8
<PAGE>
becomes due and payable, that continues for more than 30 days,
(iv) the redemption of the Subordinated Debt Securities pursuant
to the terms of the Indenture at any time on or prior to the
Stated Purchase Date or (v) the occurrence of a Liquidation
Distribution at any time on or prior to the Stated Purchase Date.
"TIA" means the Trust Indenture Act of 1939, as
amended, or any successor statute.
"Trust" means SI Financing Trust I, a Delaware
statutory business trust.
"Underwriting Agreement" means the underwriting
agreement dated , 1996 between the Company and the Trust, on the
one hand, and Salomon Brothers Inc, as representative of the
underwriters named therein, on the other hand.
"Unit" means the collective rights and obligations of a
Holder of a Unit Certificate in respect of a Preferred Security,
subject to the Pledge thereof, and a Purchase Contract.
"Unit Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such
Book Entry Interest, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant
or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Unit Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of
Units specified on such certificate.
"Unit Register" and "Unit Registrar" have the
respective meanings specified in Section 305.
"Unit Separation" has the meaning specified in Section
313.
"Unitholder" means any Person in whose name a Unit is
registered in the Unit Register.
"United States" means the United States of America
(including the District of Columbia) and its possessions.
"Vice President" means any vice president, whether or
not designated by a number or a word or words added before or
after the title "vice president."
SECTION 102. Compliance Certificates and Opinions.
9
<PAGE>
Except as otherwise expressly provided by this
Agreement, upon any application or request by the Company to the
Agent to take any action under any provision of this Agreement,
the Company shall furnish to the Agent an Officers' Certificate
stating that all conditions precedent, if any, provided for in
this Agreement relating to the proposed action have been complied
with and an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or
request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating
to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Agreement shall
include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation
as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
SECTION 103. Form of Documents Delivered to Agent.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
10
<PAGE>
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company
unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Agreement,
they may, but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Agreement to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed
in writing; and, except as herein otherwise provided, such action
shall become effective when such instrument or instruments are
delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to
Section 701) conclusive in favor of the Agent and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner which
the Agent deems sufficient.
(c) The ownership of Units shall be proved by the Unit
Register.
(d) The ownership of Separated Purchase Contracts shall
be proved by the Separated Purchase Contract Register.
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any
Certificate shall bind every future Holder of the same
Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to
11
<PAGE>
be done by the Agent or the Company in reliance thereon, whether
or not notation of such action is made upon such Certificate.
(f) The Company may set any day as a record date for
the purpose of determining the Holders of Outstanding Units
and/or Separated Purchase Contracts entitled to give, make or
take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this
Agreement to be given, made or taken by Holders of Units and/or
Separated Purchase Contracts. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Units and/or
Separated Purchase Contracts on such record date, and no other
Holders, shall be entitled to take the relevant action, whether
or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of
the requisite number of Outstanding Units and/or Separated
Purchase Contracts on such record date. Nothing in this paragraph
shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any
Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding Units
and/or Separated Purchase Contracts on the date such action is
taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of
such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Agent in writing
and to each Holder of Units and/or Separated Purchase Contracts
in the manner set forth in Section 106.
(g) With respect to any record date set pursuant to
this Section, the Company may designate any date as the
"Expiration Date" and from time to time may change the Expiration
Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of
Units and/or Separated Purchase Contracts in the manner set forth
in Section 106, on or prior to the existing Expiration Date. If
an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the Company shall be deemed to
have initially designated the 180th day after such record date as
the Expiration Date with respect thereto, subject to its right to
change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later
than the 180th day after the applicable record date.
SECTION 105. Notices, Etc.
Any request, demand, authorization, direction, notice,
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<PAGE>
consent, waiver or Act of Holders or other document provided or
permitted by this Agreement to be made upon, given or furnished
to, or filed with,
(1) the Agent by any Holder or the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Agent at 450
West 33rd Street, 15th Floor, New York, New York 10001,
Attention: Vice-President - Corporate Trustee
Administration Department, or at any other address
previously furnished in writing by the Agent to the Holders
and the Company; or
(2) the Company by the Agent or any Holder shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Company at
Seven World Trade Center, New York, New York 10048,
Attention:
, or at any other address previously furnished in
writing by the Company to the Agent and the Holders.
(3) the Collateral Agent by the Agent, the Company or
any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed
to the Collateral Agent at 101 Barclay Street, Floor 21
West, New York, New York 10286, Attention: Corporate Trust
Trustee Administration, or at any other address previously
furnished in writing by the Collateral Agent to the Agent,
Company and the Holders; or
(4) the Property Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Property
Trustee at 450 West 33rd Street, 15th Floor, New York, New
York 10001, Attention: Vice-President - Corporate
Trustee Administration Department, or at any other address
previously furnished in writing by the Property Trustee to
the Company; or
(5) the Indenture Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Indenture
Trustee at
, Attention: , or at any other
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<PAGE>
address previously furnished in writing by the Indenture
Trustee to the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of
any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such
event, at his address as it appears in the applicable Register
not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for
notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice by mail, then such notification as shall be
made with the approval of the Agent shall constitute a sufficient
notification for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Agreement by the
Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Agreement or in the Units
or the Separated Purchase Contracts shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions hereof and thereof shall not in any way be
affected or impaired thereby.
SECTION 110. Benefits of Agreement.
Nothing in this Agreement or in the Units or in the
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Separated Purchase Contracts, express or implied, shall give to
any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefits or any legal or equitable
right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the
Units or the Separated Purchase Contracts evidenced by the Unit
Certificates or the Separated Purchase Contract Certificates,
respectively, by their acceptance of delivery of such
Certificates.
SECTION 111. Governing Law.
This Agreement, the Units, the Purchase Contracts and
the Separated Purchase Contracts shall be governed by and
construed in accordance with the laws of the State of New York
without regard to the conflicts of laws principles thereof.
SECTION 112. Legal Holidays.
In any case where any Payment Date shall not be a
Business Day, then (notwithstanding any other provision of this
Agreement, the Units or the Separated Purchase Contracts) payment
of the Contract Fee shall not be made on such date, but such
payments shall be made on the next succeeding Business Day with
the same force and effect as if made on such Payment Date
provided that no interest shall accrue or be payable by the
Company or any Holder for the period from and after any such
Payment Date, except that, if such next succeeding Business Day
is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day with the same
force and effect as if made on such Payment Date.
In any case where any Purchase Date shall not be a
Business Day, then (notwithstanding any other provision of this
Agreement, the Units or the Separated Purchase Contracts), the
Purchase Contracts shall not be performed on such date, but the
Purchase Contracts shall be performed on the next preceding
Business Day with the same force and effect as if performed on
such Purchase Date.
SECTION 113. Counterparts.
This Agreement may be executed in any number of
counterparts by the parties thereto on separate counterparts,
each of which, when so executed and delivered, shall be deemed an
original, but all such counterparts shall together constitute one
and the same instrument.
SECTION 114. Inspection of Agreement.
A copy of this Agreement shall be available at all
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reasonable times during normal business hours at the Corporate
Trust Office for inspection by any Holder.
SECTION 115. Expenses.
The Company agrees to reimburse the Agent for all
reasonable costs and expenses of the Agent (including, without
limitation, reasonable fees and expenses of counsel) incurred in
connection with the enforcement of the rights of the Holders in
accordance with any provision of this Agreement, except any such
cost or expenses as may be attributable to its negligence or bad
faith.
ARTICLE TWO
CERTIFICATE FORMS
SECTION 201. Forms of Certificates Generally.
The Unit Certificates (including the form of Purchase
Contract forming part of the Units evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such
letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any
securities exchange on which the Units are listed or depositary
therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Unit Certificates, as
evidenced by their execution of the Unit Certificates.
The definitive Unit Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers
of the Company executing the Units evidenced by such Unit
Certificates, consistent with the provisions of this Agreement,
as evidenced by their execution thereof.
The Separated Purchase Contract Certificates shall be
issued in definitive form only and shall be in substantially the
form set forth in Exhibit B hereto, with such letters, numbers or
other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be
determined by the officers of the Company executing such
Separated Purchase Contract Certificates, as evidenced by their
execution of the Separated Purchase Contract Certificates.
Every Global Unit Certificate authenticated, executed
on behalf of the Unitholders and delivered hereunder shall bear a
legend in substantially the following form:
THIS SECURITY CERTIFICATE IS A GLOBAL UNIT CERTIFICATE
WITHIN THE MEANING OF THE UNIT AGREEMENT HEREINAFTER REFERRED TO
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AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS SECURITY CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A SECURITY CERTIFICATE REGISTERED, AND NO TRANSFER
OF THIS SECURITY CERTIFICATE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY
OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE UNIT AGREEMENT.
SECTION 202. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication
of the Units shall be in substantially the form set forth on the
form of the Unit Certificates.
The form of the Agent's certificate of authentication
of the Separated Purchase Contracts shall be in substantially the
form set forth on the form of the Separated Purchase Contract
Certificates.
ARTICLE THREE
THE UNITS AND SEPARATED PURCHASE CONTRACTS
SECTION 301. Title and Terms; Denominations.
The aggregate number of Units and Separated Purchase
Contracts evidenced by Certificates authenticated, executed on
behalf of the Holders and delivered hereunder is limited to
(subject to increase up to a maximum of
to the extent the over-allotment option of the underwriters
under the Underwriting Agreement is exercised), except for
Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of
(including as a result of the separation or reestablishment of a
Unit), other Certificates pursuant to Section 304, 305, 310, 313,
314 or 805.
The Certificates shall be issuable only in registered
form and only in denominations of a single Unit or Separated
Purchase Contract and any integral multiple thereof.
SECTION 302. Rights and Obligations Evidenced by the
Certificates.
Each Unit Certificate shall evidence the number of
Units specified therein, with each such Unit representing the
ownership by the Unitholder thereof of a Preferred Security,
subject to the Pledge of such Preferred Security by such
Unitholder pursuant to the Pledge Agreement, and the rights and
obligations of the Unitholder under one Purchase Contract. Prior
to the purchase, if any, of Depositary Shares under the Purchase
Contracts, the Units shall not entitle the Unitholders to any of
the rights of a holder of Depositary Shares or Series F Preferred
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Stock, including, without limitation, the right to vote or
receive any dividends or other payments or to consent or to
receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or
for any other matter, or any other rights whatsoever as
stockholders of the Company, except to the extent otherwise
expressly provided in this Agreement.
Each Separated Purchase Contract Certificate shall
evidence the number of Purchase Contracts specified therein, with
each such Purchase Contract representing the rights and
obligations of the Holder thereof under one Purchase Contract.
Prior to the purchase, if any, of Depositary Shares under the
Purchase Contracts, such Purchase Contracts shall not entitle the
Holders to any of the rights of a holder of Depositary Shares or
Series F Preferred Stock, including, without limitation, the
right to vote or receive any dividends or other payments or to
consent or to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors of the
Company or for any other matter, or any other rights whatsoever
as stockholders of the Company, except to the extent otherwise
expressly provided in this Agreement.
SECTION 303. Execution, Authentication, Delivery and Dating.
Upon the execution and delivery of this Agreement, and
at any time and from time to time thereafter, the Company may
deliver Certificates executed by the Company to the Agent for
authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order
shall authenticate, execute on behalf of the Holder and deliver
such Certificates.
The Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Vice Chairman of the
Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these
officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall
be valid until such Certificate has been executed on behalf of
the Holder by the manual signature of an authorized officer of
the Agent, as such Holder's attorney-in-fact. Such signature by
an authorized officer of the Agent shall be conclusive evidence
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that the Holder of such Certificate has entered into the Purchase
Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its
authentication.
No Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless
there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by an
authorized officer of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 304. Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with, in the
case of Unit Certificates, such letters, numbers or other marks
of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Units are
listed or depositary therefor, or as may, consistently herewith,
be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company shall
cause definitive Certificates to be prepared without unreasonable
delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without
charge to the Holder. Upon surrender for cancellation of any one
or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute
on behalf of the Holder, and deliver in exchange therefor
definitive Certificates of like tenor of authorized denominations
and evidencing a like number of Units or Separated Purchase
Contracts, as the case may be, as the temporary Certificate or
Certificates so surrendered. Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and
the same obligations with respect to the Units or Separated
Purchase Contracts, as the case may be, evidenced thereby as
definitive Certificates.
SECTION 305. Registration of Transfer and Exchange.
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The Agent shall keep at the Corporate Trust Office a
register (the "Unit Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall
provide for the registration of Unit Certificates and of
transfers of Unit Certificates (the Agent, in such capacity, the
"Unit Registrar") and a register (the "Separated Purchase
Contract Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of the Separated Purchase Contracts Certificates and
transfers of Separated Purchase Contract Certificates (the Agent,
in such capacity, the "Separated Purchase Contract Registrar").
Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated
transferee or transferees, as appropriate, one or more
Certificates of any authorized denominations, of like tenor, and
evidencing a like number of Units or Separated Purchase
Contracts, as the case may be.
At the option of the Holder of a Certificate,
Certificates may be exchanged for other Certificates, of any
authorized denominations and evidencing a like number of Units or
Separated Purchase Contracts, as the case may be, upon surrender
of the Certificates to be exchanged at the Corporate Trust
Office. Whenever any Certificates are so surrendered for
exchange, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate and execute on behalf of the Holder,
as appropriate, and deliver the Certificates which the Holder
making the exchange is entitled to receive.
All Certificates issued upon any registration of
transfer or exchange of a Certificate shall evidence ownership of
the same number of Units or Separated Purchase Contracts, as the
case may be, and be entitled to the same benefits and subject to
the same obligations under this Agreement as the Units or
Separated Purchase Contracts, as the case may be, evidenced by
the Certificate surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for
registration of transfer or for exchange shall (if so required by
the Agent) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Agent, duly executed by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any registration of
transfer or for exchange of a Certificate, but the Company and
the Agent may require payment from the Holder of a sum sufficient
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to cover any tax or other governmental charge or tax that may be
imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to
Section 310 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder and deliver any Certificate presented or surrendered for
registration of transfer or for exchange on or after the Purchase
Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent
shall (i) if the Purchase Date has occurred, deliver the
Depositary Shares issuable in respect of the Purchase Contracts
evidenced by such Certificate, or (ii) in the case of a Unit
Certificate, if a Termination Event shall have occurred prior to
the Purchase Date, transfer the Preferred Securities evidenced
thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
SECTION 306. Book-Entry Interests.
The Unit Certificates, on original issuance will be
issued in the form of one or more, fully registered Global Unit
Certificates, to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Company. Such Global Unit
Certificate shall initially be registered on the books and
records of the Company in the name of Cede & Co., the nominee of
DTC, and no Unit Beneficial Owner will receive a definitive Unit
Certificate representing such Unit Beneficial Owner's interest in
such Global Unit Certificate, except as provided in Section 309.
Unless and until definitive, fully registered Unit Certificates
have been issued to Unit Beneficial Owners pursuant to Section
309:
(a) the provisions of this Section 306 shall be in
full force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the
payment of Contract Fees and receiving approvals, votes or
consents hereunder) as the Holder of the Units and the sole
holder of the Global Unit Certificate(s) and shall have no
obligation to the Unit Beneficial Owners;
(c) to the extent that the provisions of this Section
306 conflict with any other provisions of this Agreement, the
provisions of this Section 306 shall control; and
(d) the rights of the Unit Beneficial Owners shall be
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exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such Unit
Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and
transmit payments of Contract Fees to such Clearing Agency
Participants.
SECTION 307. Notices to Holders.
Whenever a notice or other communication to the Holders
is required to be given under this Agreement, the Company or the
Company's agent shall give such notices and communications to the
Holders and, with respect to any Units registered in the name of
a Clearing Agency or the nominee of a Clearing Agency, the
Company or the Company's agent shall, except as set forth herein,
have no obligations to the Unit Beneficial Owners.
SECTION 308. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its
services as securities depository with respect to the Units, the
Company may, in its sole discretion, appoint a successor Clearing
Agency with respect to the Units.
SECTION 309. Definitive Unit Certificates.
If (i) a Clearing Agency elects to discontinue its
services as securities depository with respect to the Units and a
successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 307, (ii) the Company
elects to terminate the book entry system through the Clearing
Agency with respect to the Units, or (iii) there shall have
occurred and be continuing a default by the Company in respect of
its obligations under one or more Purchase Contracts, then upon
surrender of the Global Unit Certificates representing the Book
Entry Interests with respect to the Units by the Clearing Agency,
accompanied by registration instructions, the Company shall cause
definitive Unit Certificates to be delivered to Unit Beneficial
Owners in accordance with the instructions of the Clearing
Agency. The Company shall not be liable for any delay in delivery
of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions.
SECTION 310. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the
Agent, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor a new Certificate of like tenor,
evidencing the same number of Units or Separated Purchase
Contracts, as the case may be, and bearing a number not
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contemporaneously outstanding.
If there shall be delivered to the Company and the
Agent (i) evidence to their satisfaction of the destruction, loss
or theft of any Certificate and (ii) such security or indemnity
as may be required by them to hold each of them and any agent of
any of them harmless, then, in the absence of notice to the
Company or the Agent that such Certificate has been acquired by a
bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the
Holder and deliver to the Holder, in lieu of any such destroyed,
lost or stolen Certificate, a new Certificate of like tenor,
evidencing the same number of Units or Separated Purchase
Contracts, as the case may be, and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder and deliver to the Holder, a Certificate on or after the
Purchase Date or the Termination Date. In lieu of delivery of a
new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent
shall (i) if the Purchase Date has occurred, deliver the
Depositary Shares issuable in respect of the Purchase Contracts
evidenced by such Certificate, or (ii) in the case of a Unit
Certificate, if a Termination Event shall have occurred prior to
the Purchase Date, transfer the Preferred Securities evidenced
thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this
Section, the Company and the Agent may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section
in lieu of any destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the
Company and of the Holder (in respect of the Purchase Contracts
evidenced thereby), whether or not the destroyed, lost or stolen
Certificate (and the Purchase Contracts evidenced thereby) shall
be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately
with any and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
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destroyed, lost or stolen Certificates.
SECTION 311. Persons Deemed Owners.
Prior to due presentment of a Certificate for
registration of transfer, the Company and the Agent, and any
agent of the Company or the Agent, may treat the Person in whose
name such Certificate is registered as the owner of the Units or
the Separated Purchase Contracts evidenced thereby, for the
purpose of receiving distributions on the Preferred Securities,
receiving payments of the Contract Fees, performance of the
Purchase Contracts and for all other purposes whatsoever, whether
or not any distributions on the Preferred Securities or the
Contract Fee payable in respect of the Purchase Contracts
evidenced by the Units or the Separated Purchase Contracts, as
the case may be, shall be overdue and notwithstanding any notice
to the contrary, and neither the Company nor the Agent, nor any
agent of the Company or the Agent shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any
Global Unit Certificate, nothing herein shall prevent the
Company, the Agent or any agent of the Company or the Agent, from
giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency, as a Unitholder,
with respect to such Global Unit Certificate or impair, as
between such Clearing Agency and owners of beneficial interests
in such Global Unit Certificate, the operation of customary
practices governing the exercise of rights of such Clearing
Agency as a Unitholder of such Global Unit Certificate.
SECTION 312. Cancellation.
All Certificates surrendered for delivery of Depositary
Shares on or after the Purchase Date, transfer of Preferred
Securities after the occurrence of a Termination Event or for
registration of transfer, exchange or separation or
reestablishment of a Unit, shall, if surrendered to any Person
other than the Agent, be delivered to the Agent and, if not
already canceled, shall be promptly canceled by it. The Company
may at any time deliver to the Agent for cancellation any
Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer
Order, be promptly canceled by the Agent. No Certificates shall
be authenticated, executed on behalf of the Holder and delivered
in lieu of or in exchange for any Certificates canceled as
provided in this Section, except as expressly permitted by this
Agreement. All canceled Certificates held by the Agent shall be
destroyed by the Agent unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall
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acquire any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such
Certificate is delivered to the Agent canceled or for
cancellation.
SECTION 313. Separation of Unit.
A Unitholder may separate Preferred Securities from the
related Purchase Contracts (a "Unit Separation") at any time on
or prior to the 32nd day immediately preceding the Purchase Date
by (a) depositing with the Collateral Agent Eligible Collateral
having an aggregate principal amount equal to the aggregate
Stated Amount of the Preferred Securities and (b) transferring
the related Units to the Agent accompanied by a notice to the
Agent stating that the Unitholder has transferred the relevant
amount of Eligible Collateral to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to
release the Preferred Securities underlying such Units, whereupon
the Agent shall promptly give such instruction to the Collateral
Agent. Upon receipt of the deposit described in clause (a) above
and the instruction described in clause (b) above, in accordance
with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Preferred Securities having a
corresponding aggregate Stated Amount from the Pledge of the
Pledge Agreement to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent
shall promptly:
(i) cancel the related Units;
(ii) transfer the Preferred Securities to the former
Unitholder; and
(iii) authenticate, execute on behalf of the former
Unitholder and deliver a Separated Purchase Contract
Certificate executed by the Company in accordance with
Section 303 evidencing the same number of Purchase
Contracts evidenced by the canceled Units.
Purchase Contracts secured by Eligible Collateral shall
be nontransferable without the prior written consent of the
Company, and the Separated Purchase Contract Certificates
evidencing such Purchase Contracts shall be in definitive form
only and bear a legend in substantially the following form:
THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF
THE PURCHASE CONTRACTS EVIDENCED BY THIS CERTIFICATE, OR ANY
INTEREST IN SUCH PURCHASE CONTRACTS, IS RESTRICTED BY THE TERMS
OF THE UNIT AGREEMENT DATED , 1996, A COPY OF WHICH IS ON FILE AT
THE CORPORATE TRUST OFFICE OF THE AGENT. NO SUCH SALE,
ASSIGNMENT, TRANSFER OR OTHER DISPOSITION SHALL BE EFFECTIVE
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY.
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Unitholders who elect to separate the Preferred
Security from the related Purchase Contract shall be responsible
for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent for the Eligible Collateral, and the
Company shall not be responsible for any such fees or expenses.
Unitholders may make Unit Separations only in integral
multiples of 400 Units.
In the event a Unitholder making a Unit Separation
fails to effect a book-entry transfer of the Units or deliver a
definitive Unit Certificate(s) to the Agent after depositing
Eligible Collateral with the Collateral Agent, the Preferred
Security evidenced by such Unit, and any distributions on such
Preferred Security, shall be held in the name of the Agent in
trust for the benefit of such Unitholder, until such Unit is
transferred or Unit Certificate is delivered, as the case may be,
or, with respect to a Unit Certificate, such Unitholder provides
satisfactory evidence that such Unit Certificate has been
destroyed, lost or stolen, together with any indemnity that may
be required by the Agent and the Company.
Except as described in this Section 313, for so long as
the Purchase Contract underlying a Unit remains in effect such
Unit shall not be separable into its constituent parts, and the
rights and obligations of the Unitholder in respect of the
Preferred Security and Purchase Contract constituting such Unit
may be acquired, and may be transferred and exchanged, only as a
Unit. Other than a Unit Certificate evidencing a Unit, no
Unitholder, or any transferee thereof, shall be entitled to
receive a certificate evidencing the ownership of a Preferred
Security or the rights and obligations of the Unitholder and the
Company under a Purchase Contract for so long as the Purchase
Contract underlying the Unit remains in effect.
SECTION 314. Reestablishment of a Unit.
A Holder of Separated Purchase Contracts may at any
time on or prior to the 32nd day immediately preceding the
Purchase Date reestablish Units by (a) transferring Preferred
Securities to the Collateral Agent with an instruction that the
Collateral Agent (i) release Eligible Collateral having a
corresponding aggregate principal amount and (ii) notify the
Agent of the receipt of the Preferred Securities and (b)
delivering the related Separated Purchase Contract Certificate(s)
to the Agent for cancellation. Upon such transfer as described in
clause (a) above, the Collateral Agent will release the relevant
amount of Eligible Collateral from the Pledge of the Pledge
Agreement free and clear of the Company's security interest
therein and, upon the receipt of notice from the Collateral Agent
as provided in clause (a) above, the Agent shall promptly effect
the reestablishment of a number of Units equal to
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the number of Purchase Contracts evidenced by the canceled
Separated Purchase Contracts by depositing such Units into DTC
for the credit of such Holder (or its designee), or, in case of
Unit Certificates in definitive form, by authenticating and
executing on behalf of such Holder and delivering a definitive
Unit Certificate executed by the Company in accordance with
Section 303 evidencing such Units.
Reestablished Units shall be freely transferable
without the consent of the Company.
Holders of Separated Purchase Contracts may reestablish
Units only in integral multiples of 400 Units.
ARTICLE FOUR
THE PREFERRED SECURITIES
SECTION 401. Payment of Distribution; Rights to Distributions
Preserved.
A distribution on any Preferred Security which is paid
on any Payment Date shall, subject to receipt thereof by the
Agent from the Collateral Agent as provided by the terms of the
Pledge Agreement, be paid to the Person in whose name the Unit
Certificate (or one or more Predecessor Unit Certificates) of
which such Preferred Security is a part is registered at the
close of business on the Record Date for such Payment Date.
Each Unit Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of
or in exchange for or in lieu of any other Unit Certificate shall
carry the rights to distributions accrued and unpaid, and to
accrue, which were carried by the Preferred Securities underlying
such other Unit Certificate.
In the case of any Unit with respect to which Cash
Settlement of the underlying Purchase Contract is effected on a
Purchase Date after any Record Date and on or prior to the next
succeeding Payment Date, distributions on the Preferred
Securities underlying such Unit otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such
Cash Settlement, and such distributions shall, subject to receipt
thereof by the Agent, be paid to the Person in whose name the
Unit Certificate (or one or more Predecessor Unit Certificates)
is registered at the close of business on the Record Date. Except
as otherwise expressly provided in the immediately preceding
sentence, in the case of any Unit with respect to which Cash
Settlement of the underlying Purchase Contract is effected on a
Purchase Date, distributions on the related Preferred Securities
that would otherwise be payable after the Purchase Date shall not
be payable hereunder to the Holder of such Unit.
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SECTION 402. Transfer of Preferred Securities upon Occurrence of
Termination Event; Payment of Redemption Price or Liquidation
Distribution.
Upon the occurrence of a Termination Event and the
transfer to the Agent of the Preferred Securities underlying the
Units pursuant to the terms of the Pledge Agreement, the Agent
shall request transfer instructions with respect to such
Preferred Securities from each Unitholder by written request
mailed to such Unitholder at his address as it appears in the
Unit Register. Upon book-entry transfer of the Units or delivery
of a definitive Unit Certificate to the Agent with such transfer
instructions, the Agent shall transfer the Preferred Securities
to such Unitholder by book-entry transfer, or other appropriate
procedures, in accordance with such instructions. In the event a
Holder of Units fails to effect such transfer or delivery, the
Preferred Securities evidenced by such Units, and any
distributions thereon, shall be held in the name of the Agent in
trust for the benefit of such Unitholder, until such Units are
transferred or the Unit Certificate is surrendered or such
Unitholder provides satisfactory evidence that such Unit
Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company.
Upon the occurrence of a Termination Event and the
transfer to the Agent of the Redemption Price or Liquidation
Distribution in respect of the Preferred Securities underlying
the Units pursuant to the terms of the Pledge Agreement, the
Agent shall transfer by wire to the Clearing Agency funds
sufficient to pay the applicable Redemption Price or Liquidation
Distribution with respect to the Preferred Securities forming a
part of the Units upon book-entry transfer of the Units, or, if
the Units are issued in definitive form, the Agent will pay the
applicable Redemption Price or Liquidation Distribution with
respect to the Preferred Securities forming a part of the Units
to the Holders of such Units upon delivery of the definitive Unit
Certificates evidencing such Units to the Agent. In the event a
Holder of Units fails to effect such transfer or delivery, the
applicable Redemption Price or Liquidation Price with respect to
the Preferred Securities evidenced by such Units shall be held in
the name of the Agent in trust for the benefit of such
Unitholder, until such Units are transferred or the Unit
Certificate is surrendered or such Unitholder provides
satisfactory evidence that such Unit Certificate has been
destroyed, lost or stolen, together with any indemnity that may
be required by the Agent and the Company.
SECTION 403. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will
be entitled to exercise the voting and any other consensual
rights pertaining to the Preferred Securities pledged with the
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Collateral Agent. Upon receipt of notice of any meeting at which
holders of Preferred Securities are entitled to vote or
solicitation of consents, waivers or proxies of holders of
Preferred Securities, the Agent shall, as soon as practicable
thereafter, mail to the Unitholders a notice (a) containing such
information as is contained in the notice or solicitation, (b)
stating that each Unitholder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date
as the record date for determining the holders of Preferred
Securities entitled to vote) shall be entitled to instruct the
Agent as to the exercise of the voting rights pertaining to the
Preferred Securities evidenced by their Units and (c) stating the
manner in which such instructions may be given. Upon the written
request of the Unitholders on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular
voting instructions are received. In the absence of specific
instructions from the Holder of a Unit, the Agent shall abstain
from voting the Preferred Security evidenced by such Unit. The
Company hereby agrees, if applicable, to take all action which
may be deemed necessary by the Agent in order to enable the Agent
to vote such Preferred Securities or cause such Preferred
Securities to be voted, and the Trust shall covenant in the
Declaration to take all action which may be deemed necessary by
the Agent in order to enable the Agent to vote such Preferred
Securities or to cause such Preferred Securities to be voted.
SECTION 404. Distribution of Subordinated Debt Securities.
In the event Subordinated Debt Securities are received
by the Collateral Agent in respect of Preferred Securities
subject to the Pledge thereof upon the occurrence of a Tax Event,
Investment Company Event, Optional Distribution or liquidation of
the Trust, the Subordinated Debt Securities will be held by the
Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligations of each Unitholder to
purchase Depositary Shares under the Purchase Contracts evidenced
by such Units. Thereafter the Holders and the Collateral Agent
shall have such rights and obligations with respect to the
Subordinated Debt Securities that the Holders and the Collateral
Agent had in respect of the Preferred Securities subject to the
Pledge thereof as provided in Articles III, IV, V and VI hereof,
and any reference herein to the Preferred Securities shall be
deemed to be a reference to the Subordinated Debt Securities. The
Company may cause to be made in the Certificates thereafter to be
issued such change in phraseology and form (but not in substance)
as may be appropriate.
ARTICLE FIVE
THE PURCHASE CONTRACTS
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SECTION 501. Purchase of Depositary Share; Acceleration of
Purchase Obligation.
(a) Each Purchase Contract shall obligate the Holder of
the related Unit or the Separated Purchase Contract to purchase,
and the Company to sell, on the Stated Purchase Date, one
Depositary Share, at a price of $25 per Depositary Share (the
"Purchase Price"), unless a Termination Event shall have
occurred.
(b) Subject to paragraph (c) of this Section, the
Company or the Company's agent may, at the Company's sole option
and in its sole discretion, on not less than 45 nor more than 60
days' notice (an "Acceleration Notice") to the Agent, the
Collateral Agent, the Property Trustee, the Indenture Trustee and
the Holders, at their addresses as they appear in the Register,
accelerate the obligation of the Holders under the Purchase
Contracts, in whole (but not in part), to purchase, and the
Company to sell, on the next succeeding Payment Date (such
Payment Date, an "Early Purchase Date" and, together with the
Stated Purchase Date, a "Purchase Date"), one Depositary Share
per Purchase Contract; provided that the Company shall have the
right, in its sole discretion, to rescind any Acceleration Notice
in connection with an Early Purchase Date (whereupon all rights
and obligations of the Company and the Holders that would have
arisen with respect to such Payment Date shall be of no force and
effect) upon delivery of written notice of such cancellation to
the Agent, the Collateral Agent, the Property Trustee, the
Indenture Trustee and the Holders on or before the 20th day
immediately prior to the applicable Early Purchase Date, without
prejudice to the rights of the Company, including without
limitation its rights to provide an Acceleration Notice in the
future.
(c) Except as expressly provided herein, no Unitholder
shall have the right or obligation to purchase Depositary Shares
prior to the Stated Purchase Date or from and after the date on
which a Termination Event has occurred.
(d) Each Holder of a Unit or Separated Purchase
Contract, by his acceptance thereof, irrevocably authorizes the
Agent to enter into and perform the Purchase Contract on his
behalf as his attorney-in-fact, agrees to be bound by the terms
and provisions thereof, covenants and agrees to perform its
obligations under such Purchase Contracts, and consents to the
provisions hereof, irrevocably authorizes the Agent as his
attorney-in-fact to enter into and perform the Pledge Agreement
on his behalf as his attorney-in-fact, and consents to and agrees
to be bound by the Pledge of the Preferred Security or Eligible
Collateral pursuant to the Pledge Agreement. Each Holder of a
Unit or Separated Purchase Contract, by his acceptance thereof,
further covenants and agrees, that, to the extent and in the
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manner provided in Section 503 and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the Stated
Amount of the Preferred Security or the proceeds of the Eligible
Collateral on the Purchase Date shall be paid by the Collateral
Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
(e) Upon registration of transfer of a Certificate
evidencing Purchase Contracts, the transferee shall be bound
(without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase
Contracts evidenced by such Certificate and the Pledge Agreement
and the transferor shall be released from the obligations under
the Purchase Contracts evidenced by the Certificate so
transferred. The Company covenants and agrees, and each Holder of
a Certificate, by his acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
SECTION 502. Contract Fee.
The Company shall pay, on each Payment Date, the
Contract Fee payable in respect of each Purchase Contract to the
Person in whose name the Certificate (or one or more Predecessor
Certificates) evidencing such Purchase Contract is registered at
the close of business on the Record Date for such Payment Date.
The Contract Fee with respect to any Purchase Contract shall
cease to be payable in respect of any period after the Purchase
Date (or in the case of a Put Default, the Delayed Purchase Date)
or, if earlier, in respect of any period after termination of the
Purchase Contract. The Contract Fee will be payable at the office
of the Agent in The City of New York maintained for that purpose
or, at the option of the Company, by check mailed to the address
of the Person entitled thereto at such Person's address as it
appears on the Register.
Upon the occurrence of a Termination Event, Contract
Fees shall cease to accrue in respect of any period from and
after the date of such Termination Event (unless the Company
defaults in the payment of accrued Contract Fees). The Company's
obligations to pay any accrued Contract Fees shall be deemed
fulfilled if the Company deposits with the Agent funds necessary
to pay accrued Contract Fees, in trust with irrevocable
instructions and authorization that such funds shall be delivered
to the Holders.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of
(including as a result of the separation or reestablishment of a
Unit) any other Certificate shall carry the rights to fees
accrued and unpaid, and to accrue, which were carried by the
Purchase Contract evidenced by such other Certificate.
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SECTION 503. Payment of Purchase Price.
(a) Subject to paragraph (b) of this Section, the
Purchase Price for the Depositary Share purchased pursuant to a
Purchase Contract shall be payable at the office of the
Collateral Agent in The City of New York maintained for such
purpose as follows:
(i) A Unitholder may effect a "Cash Settlement" of a
Purchase Contract by (A) providing the Agent with notice of
its election to effect a Cash Settlement not less than 10
nor more than 30 days prior to the Purchase Date and (B)
making a payment of the Purchase Price to the Collateral
Agent prior to 9:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Date in
lawful money of the United States by certified check or
wire transfer in immediately available funds payable to or
upon the order of the Company. Upon receipt of notice from
a Unitholder electing a Cash Settlement, the Agent promptly
shall notify the Collateral Agent of such Unitholder's
election. The funds received by the Collateral Agent will
be invested promptly by the Collateral Agent in overnight
federal funds and paid to the Company on the Purchase Date
in settlement of the Purchase Contract in accordance with
the terms of the Pledge Agreement;
(ii) A Unitholder may effect a "Collateral Settlement"
of a Purchase Contract by directing the Unit Agent not less
than 10 nor more than 30 days prior to the Purchase Date to
instruct the Collateral Agent to present the related
Preferred Security evidenced by the Unit to the Trust for
repayment prior to 10:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Date at the
Repayment Price and to apply $25 of the proceeds therefrom
to settlement of the Purchase Contract held by the Holder.
The Unit Agent shall so instruct the Collateral Agent in
the form provided in Exhibit C. Upon receipt of the
Preferred Security, the Property Trustee will transfer to
the Collateral Agent no later than 1:00 p.m., New York City
time, on such Business Day funds in an amount equal to the
Repayment Price of the Preferred Security, which funds will
be invested by the Collateral Agent promptly in overnight
federal funds and paid to the Company on the Purchase Date
in settlement of the Purchase Contract in accordance with
the terms of the Pledge Agreement. Any funds received by
the Collateral Agent (A) in excess of the Purchase Price of
the Purchase Contract being settled thereby or (B) in
respect of the interest earned from the investment in
overnight federal funds will be distributed to the Agent
for payment to the Holder at the office of the Agent in The
City of New York maintained for that purpose. In addition,
if the rate of interest per annum paid on such investment
is less
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than %, the Company shall make a distribution to the
Holders of an amount equal to one day's interest on the
Stated Amount at the rate of % per annum less the amount of
interest actually earned from such investment. Such
distribution shall be payable at the office of the Agent in
The City of New York maintained for that purpose or, at the
option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears
on the Unit Register;
(iii) A Unitholder who does not make an effective Cash
Settlement or direct the Agent to deliver an instruction
for a Collateral Settlement shall be deemed to have elected
a Collateral Settlement, and the Unitholder's Purchase
Contract automatically shall be settled accordingly, as
provided in subparagraph (a)(ii); and
(iv) A Holder of a Separated Purchase Contract shall
pay for the Depositary Share to be issued under the
Purchase Contract from the proceeds of the related Eligible
Collateral held by the Collateral Agent, which will be
applied automatically by the Collateral Agent to pay the
Purchase Price for the Purchase Contract to the Company on
the Purchase Date without receiving any instruction from
the Holder. During the 30 days immediately prior to the
Purchase Date, the Collateral Agent will reinvest any
maturing Eligible Collateral in instruments maturing no
later than the Business Day immediately prior to the
Purchase Date in accordance with the terms of the Pledge
Agreement. In the event the sum of the proceeds from the
related Eligible Collateral and the interest earned from
the investment in overnight federal funds is in excess of
the aggregate Purchase Price of the Purchase Contracts
being settled thereby, the Collateral Agent will distribute
such excess to the Holder of the related Separated Purchase
Contracts on the Purchase Date.
(b) If any of the Preferred Securities are presented by
the Collateral Agent for repayment by the Trust, as provided in
subparagraph (a)(ii) in connection with settlement of the related
Purchase Contracts on an Early Purchase Date but are not repaid
in accordance with their terms (a "Put Default") and such Put
Default shall continue for more than two Business Days (the
"Extension Period"), (a) the Company shall not be entitled to
accelerate the obligations of the Holders to any Early Purchase
Date, (b) any Acceleration Notice shall be rescinded and annulled
automatically, (c) any payments deposited with the Collateral
Agent to effect a Cash Settlement shall be returned to the
Holders and (d) any proceeds received by the Collateral Agent
from the Eligible Collateral shall be reinvested in Eligible
Collateral in accordance with the terms of the Pledge Agreement.
If a Put Default shall occur and continue for more than two
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Business Days in connection with a settlement of the related
Purchase Contracts on the Stated Purchase Date, a Termination
Event shall occur having the effect described in Section 506.
However, if the Preferred Securities in respect of which a Put
Default has occurred are repaid at the Repayment Price on any day
during the Extension Period, the Company and the Holders shall be
obligated to settle the Purchase Contracts on their original
terms on the immediately following Business Day (a "Delayed
Purchase Date"). During the Extension Period and until settlement
of the Purchase Contracts on the Delayed Purchase Date, if any,
any payments deposited with the Collateral Agent to effect a Cash
Settlement and any proceeds received by the Collateral Agent from
the Eligible Collateral or any repaid Preferred Securities will
be invested in overnight federal funds in accordance with the
terms of the Pledge Agreement. Any funds received by the
Collateral Agent in respect of the interest earned from the
investment in overnight federal funds will be distributed to the
Agent for payment to the Holder at the office of the Agent in The
City of New York maintained for that purpose.
(c) The Company shall not be obligated to issue any
shares of Series F Preferred Stock in respect of a Purchase
Contract or deliver any certificate therefor to the Depositary
unless it shall have received payment in full of the Purchase
Price for the Depositary Share to be purchased thereunder in the
manner herein set forth.
(d) Upon Cash Settlement of any Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the
Collateral Agreement cause the Preferred Security evidenced by
such Unit to be released from the Pledge by the Collateral Agent
free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Unitholder thereof
or its designee as soon as practicable and (ii) subject to the
receipt thereof from the Collateral Agent, the Agent shall, by
book-entry transfer, or other appropriate procedures, in
accordance with instructions provided by the Unitholder thereof,
transfer the Preferred Security (or, if no such instructions are
given to the Agent by the Unitholder, the Agent shall hold the
Preferred Security, and any distributions thereon, in the name of
the Agent in trust for the benefit of such Unitholder).
(e) The Agent shall request registration instructions
from each Holder, by written request mailed to such Holder at his
address as it appears in the Register, in respect of the
Depositary Receipts to be delivered in respect of the Depositary
Shares no later than the fifteenth day immediately preceding the
Purchase Date. Upon receipt by the Agent of such registration
instructions, the Agent shall deliver such instructions to the
Company, for delivery to the Depositary pursuant to the Deposit
Agreement. If no registration instructions with respect to a Unit
or Separated Purchase Contract are received by the Agent by
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the second Business Day preceding the Purchase Date, the Agent
shall cause the Depositary Receipts deliverable in respect of the
Purchase Contracts evidenced thereby to be registered in the name
of the Agent, as custodian for the Holder of such Unit or
Separated Purchase Contract.
SECTION 504. Issuance of Shares and Depositary Receipts.
Unless a Termination Event shall have occurred on or
prior to the Purchase Date, on the Purchase Date, upon its
receipt of payment in full of the Purchase Price for the
Depositary Shares purchased by the Holders pursuant to the
foregoing provisions of this Article, and subject to the
provisions of Section 901, the Company shall then cause to be
delivered to the Depositary a certificate for the validly issued,
fully paid and nonassessable shares of Series F Preferred Stock
to be evidenced by the Depositary Shares so purchased, registered
in the name of the Depositary in accordance with the Deposit
Agreement, together with instructions to the Depositary to
register the Depositary Receipts issuable by the Depositary in
the names of the Holders or such Holders' designees provided by
the Holders to the Agent and delivered to the Company by the
Agent pursuant to Section 503 (or, if no such instructions are
given to the Agent by a Holder, to register the related
Depositary Receipts in the name of the Agent, as custodian for
such Holder). Upon the issuance of the Depositary Receipts
evidencing such Depositary Shares, registered as requested, the
Agent shall then cause to be delivered such Depositary Receipt to
such Holder or its designee, upon delivery to the Agent of the
related Certificate or, in the case of a Global Unit Certificate,
book-entry transfer to the Agent of the related Units. The
certificate evidencing such shares of Series F Preferred Stock
shall be deemed to have been issued and the Depositary shall be
deemed to have become a holder of record of such shares as of the
close of business on the day on which payment in full under the
Purchase Contracts shall have been tendered to the Company by the
Collateral Agent.
Upon delivery to the office of the Agent in The City of
New York maintained for that purpose of a Certificate in respect
of which Depositary Receipts have been registered in the name of
the Agent, as custodian for the benefit of such Holder, the Agent
shall deliver such Depositary Receipts to the Depositary,
together with such instruments of transfer as may be required to
effect the registration of such Depositary Receipts in the name
of such Holder.
SECTION 505. Charges and Taxes.
The Company will pay all taxes attributable to the
initial issuance and delivery of the shares of Series F Preferred
Stock, the Depositary Shares and the Depositary Receipts;
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provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any exchange
of or substitution for a Certificate evidencing a Purchase
Contract or any issuance of a Depositary Receipt in a name other
than that of the registered Holder of a Certificate surrendered
upon the purchase of Depositary Shares issuable in respect of the
Purchase Contracts evidenced thereby, other than in the name of
the Agent, as custodian for such Holder, and the Company shall
not be required to issue or deliver such share certificates,
Certificates or such Purchase Contracts unless or until the
Person or Persons requesting the transfer or issuance thereof
shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax
has been paid. The Agent shall have no obligation to pay any such
tax.
SECTION 506. Termination Event; Notice.
The Purchase Contracts and the obligations and rights
of the Company and the Holders thereunder shall immediately and
automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Date, a Termination Event shall have occurred.
Any such termination shall be without liability to the Holders or
the Company. Upon the occurrence of a Termination Event, the
Company shall give notice to the Agent, the Collateral Agent and
to the Holders, at their addresses as they appear in the
Register. Upon and after the occurrence of a Termination Event,
the Units shall thereafter represent the right to receive the
Preferred Securities forming a part of such Units in accordance
with the provisions of Section 402 and the Pledge Agreement.
ARTICLE SIX
REMEDIES
SECTION 601. Unconditional Right of Holder to Receive Contract Fee
and to Purchase Depositary Share.
Notwithstanding any other provision in this Agreement,
the Holder of any Unit or Separated Purchase Contract shall have
the right, which is absolute and unconditional, to receive
payment of each installment of the Contract Fee with respect to
the Purchase Contract evidenced by such Unit or Separated
Purchase Contract on the respective Payment Date for such Unit or
Separated Purchase Contract and to purchase a Depositary Share
pursuant to such Purchase Contract and, in each such case, to
institute suit for the enforcement of any such payment and right
to purchase a Depositary Share, and such rights shall not be
impaired without the consent of such Holder; provided that all
such rights shall terminate upon the occurrence of a Termination
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Event.
SECTION 602. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce
any right or remedy under this Agreement and such proceeding has
been discontinued or abandoned for any reason, or has been
determined adversely to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company and
such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies
of such Holder shall continue as though no such proceeding had
been instituted.
SECTION 603. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Certificates in the last paragraph of Section 310, no right or
remedy herein conferred upon or reserved to the Holders is
intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 604. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any
right or remedy upon any Default shall impair any such right or
remedy or constitute a waiver of any such right. Every right and
remedy given by this Article or by law to the Holders may be
exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 605. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of
any Unit or Separated Purchase Contract by his acceptance of the
Unit or Separated Purchase Contract shall be deemed to have
agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Agreement,
or in any suit against the Agent for any action taken, suffered
or omitted by it as Agent, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit
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instituted by the Company, to any suit instituted by the Agent,
to any suit instituted by any Holder of Units, Separated Purchase
Contracts, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Units and Separated Purchase
Contracts, or to any suit instituted by any Holder for the
enforcement of the payment of the distributions on any Preferred
Securities or the Contract Fee on any Purchase Contract on or
after the respective Payment Date therefor evidenced by the Units
or Separated Purchase Contracts held by such Holder, or for
enforcement of the right to purchase Depositary Shares under the
Purchase Contracts evidenced by the Units or Separated Purchase
Contracts held by such Holder.
SECTION 606. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or
the performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE SEVEN
THE AGENT
SECTION 701. Certain Duties and Responsibilities.
(a) The Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement,
and no implied covenants or obligations shall be read into this
Agreement against the Agent.
(b) In the absence of bad faith or negligence on its
part, the Agent may, with respect to the Units and Separated
Purchase Contracts, conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the case
of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Agent, the Agent
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Agreement.
(c) No provision of this Agreement shall be construed
to relieve the Agent from liability for its own negligent action,
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its own negligent failure to act, or its own willful misconduct,
except that:
(1) this Subsection shall not be construed to
limit the effect of Subsections (a) and (b) of this Section;
(2) the Agent shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Agent was grossly
negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require
the Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Agent shall be
subject to the provision of this Section.
(e) The Agent is authorized and directed to execute and
deliver the Pledge Agreement in its capacity as Agent. The Agent
shall have no responsibility or liability (other than as provided
in section (c) above) for the validity of the pledge or security
interest granted under the Pledge Agreement other than to ensure
that any Preferred Securities delivered to the Unit Agent are
transferred to the Collateral Agent.
SECTION 702. Notice of Default.
Within 90 days after the occurrence of any default by
the Company hereunder, of which a Responsible Officer of the
Agent has actual knowledge, the Agent shall transmit by mail to
the Company and the Holders, as their names and addresses appear
in the Register, notice of such default hereunder unless such
default shall have been cured or waived.
SECTION 703. Certain Rights of Agent.
Subject to the provisions of Section 701:
(a) the Agent may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
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(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by an Officers'
Certificate, Issuer Order or Issuer Request, and any resolution
of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement
the Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Agent may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as
it may see fit, and, if the Agent shall determine to make such
further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by
agent or attorney; and
(f) the Agent may execute any of the powers hereunder
or perform any duties hereunder either directly or by or through
agents or attorneys and the Agent shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 704. Not Responsible for Recitals or Issuance of Units
or Separated Purchase Contracts.
The recitals contained herein and in the Certificates
shall be taken as the statements of the Company and the Agent
assumes no responsibility for their correctness. The Agent makes
no representations as to the validity or sufficiency of this
Agreement or of the Units or Separated Purchase Contracts. The
Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 705. May Hold Units or Separated Purchase Contracts.
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Any Registrar or any other agent of the Company, or the
Agent, in its individual of any other capacity, may become the
owner or pledgee of Units or Separated Purchase Contracts and may
otherwise deal with the Company with the same rights it would
have if it were not Registrar or such other agent, or the Agent.
SECTION 706. Money Held in Trust.
Money held by the Agent in trust hereunder need not be
segregated from the other funds except to the extent required by
law. The Agent shall be under no obligation to in-vest or pay
interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 707. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(b) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith;
and
(c) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers
or duties hereunder.
SECTION 708. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which
shall be a corporation organized and doing business under the
laws of the United States of America, any State thereof or the
District of Columbia, having, together with its parent, a
combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and
having its Corporate Trust Office in The City of New York, if
there be such a corporation in The City of New York, qualified
and eligible under this Article and willing to act on reasonable
terms. If such corporation, or its parent, publishes reports of
condition at least annually, pursuant to law or to the
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requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Agent shall cease to be eligible in
accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 709. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no
appointment of a successor Agent pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Agent in accordance with the applicable requirements of
Section 710.
(b) The Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date
of such resignation. If the instrument of acceptance by a
successor Agent required by Section 710 shall not have been
delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor
Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Units and
Separated Purchase Contracts delivered to the Agent and the
Company.
(d) If at any time:
(1) the Agent fails to comply with Section 310(b) of
the TIA, as if the Agent were an indenture trustee under an
indenture qualified under the TIA, after written request
therefor by the Company or by any Holder who has been a
bona fide Holder for at least six months, or
(2) the Agent shall cease to be eligible under Section
708 and shall fail to resign after written request therefor
by the Company or by any Holder, or
(3) the Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the
Agent or of its property shall be appointed or any public
officer shall take charge or control of the Agent or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by an Officers'
Certificate may remove the Agent, or (ii) any Holder who has been
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a bona fide Holder for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Agent and the
appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Agent and shall comply with the
applicable requirements of Section 710. If no successor Agent
shall have been so appointed by the Company and accepted
appointment in the manner required by Section 710, any Holder who
has been a bona fide Holder for at least six months may, on
behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a
successor Agent.
(f) The Company shall give, or shall cause such
successor Agent to give, notice of each resignation and each
removal of the Agent and each appointment of a successor Agent by
mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in
the applicable Register. Each notice shall include the name of
the successor Agent and the address of its Corporate Trust
Office.
SECTION 710. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Agent
an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
agencies end duties of the retiring Agent; but, on the request of
the Company or the successor Agent, such retiring Agent shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights and powers of
the retiring Agent and shall duly assign, transfer and deliver to
such successor Agent all property and money held by such retiring
Agent hereunder.
(b) Upon request of any such successor Agent, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Agent all
such rights, powers and agencies referred to in paragraph (a) of
this Section.
(c) No successor Agent shall accept its appointment
unless at the time of such acceptance such successor Agent shall
be qualified and eligible under this Article.
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SECTION 711. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
Corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the agency
business of the Agent, shall be the successor of the Agent
hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided
such corporation shall be otherwise qualified and eligible under
this Article. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not
delivered, by the Agent then in office, any successor by merger,
conversion or consolidation to such Agent may adopt such
authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Units
or Separated Purchase Contracts, as the case may be.
SECTION 712. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the
Agent reasonable proof that each such applicant has owned a Unit
and/or Separated Purchase Contract for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to communicate with
other Holders with respect to their rights under this Agreement
or under the Units or Separated Purchase Contracts and is
accompanied by a copy of the form of proxy or other communication
which such applicants propose to transmit, then the Agent shall
within five Business Days after the receipt of such application,
afford such applicants access to the information preserved at the
time by the Agent in accordance with Section 712(a).
(c) Every Holder agrees with the Company and the Agent
that none of the Company, the Agent nor any agent of any of them
shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in
accordance with Section 712(b), regardless of the source from
which such information was derived.
SECTION 713. No Obligations of Agent.
Except to the extent otherwise provided in this
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Agreement, the Agent assumes no obligations and shall not be
subject to any liability under this Agreement or any Purchase
Contract in respect of the obligations of the Holder thereunder.
The Company agrees, and each Holder of a Certificate, by his
acceptance thereof, shall be deemed to have agreed, that the
Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders,
and that the Agent shall have no obligation to perform such
Purchase Contracts on behalf of the Holders, except to the extent
provided in Article Five hereof.
SECTION 714. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification,
information reporting and withholding (including "back-up"
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any
payments made with respect to the Units or the Separated Purchase
Contracts or (ii) the issuance, delivery, holding, transfer,
redemption or exercise of rights under the Units or Separated
Purchase Contracts. Such compliance shall include, without
limitation, the preparation and timely filing of required returns
and the timely payment of all amounts required to be withheld to
the appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the application of such
requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement
rely on any such direction in accordance with the provisions of
Section 701(b).
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make
such records available on written request, to the Company or its
authorized representatives within a reasonable period of time
after receipt of such request.
ARTICLE EIGHT
SUPPLEMENTAL AGREEMENTS
SECTION 801. Supplemental Agreements without Consent of Holders.
Without the consent of any Holders, the Company and the
Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
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covenants of the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other
provisions herein, or to make any other provisions with
respect to matters or questions arising under this
Agreement, provided such action shall not adversely affect
the interests of the Holders.
SECTION 802. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than 66-
2/3% of the Outstanding Units and Separated Purchase Contracts
voting together as one class, by Act of said Holders delivered to
the Company and the Agent, the Company when authorized by a Board
Resolution or Officers' Certificate, and the Agent may enter into
an agreement or agreements supplemental hereto for the purpose of
modifying in any manner the terms of the Purchase Contracts, or
the provisions of this Agreement or the rights of the Holders in
respect of the Purchase Contracts; provided, however, that no
such supplemental agreement shall, without the consent of the
Holder of each Outstanding Unit or Separated Purchase Contract
affected thereby,
(1) change any Payment Date;
(2) increase the amount or decrease the types of
Collateral required to be pledged to secure a Holder's
obligations under the Purchase Contracts, impair the right
of the Holder of any Purchase Contract to receive
distributions on the related Collateral or otherwise
adversely affect the Holder's rights in or to such
Collateral, or otherwise materially and adversely alter the
rights of the holders of Preferred Securities;
(3) reduce any Contract Fee or change any place where,
or the coin or currency in which, any Contract Fee is
payable;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of Depositary Shares to be
purchased pursuant to any Purchase Contract, increase the
price to purchase Depositary Shares upon settlement of any
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Purchase Contracts, change the Stated Purchase Date or
otherwise adversely affect the Holder's rights under any
Purchase Contract;
(6) reduce the percentage of the outstanding Units and
Separated Purchase Contracts the consent of whose Holders
is required for any such supplemental agreement; or
(7) cause the Trust for United States federal income
tax purposes to be classified as other than a grantor
trust.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act
shall approve the substance thereof.
SECTION 803. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies or
duties created by, any supplemental agreement permitted by this
Article or the modifications thereby of the agencies or duties
created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 801) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this
Agreement and that any conditions precedent to the execution of
such supplemental agreement to the extent set forth in this
Agreement have been satisfied. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which
affects the Agent's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 804. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under
this Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of
this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed and delivered
hereunder shall be bound thereby.
SECTION 805. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental
agreement pursuant to this Article may, and shall if required by
the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the
Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and
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delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, TRANSFER OR LEASE
SECTION 901. Covenant Not to Merge, Consolidate, Sell, Transfer
or Lease Property Except under Certain Conditions.
The Company covenants that it will not merge or
consolidate with any other Person or sell, transfer or lease all
or substantially all of its assets to any Person, except that the
Company may merge or consolidate with, or sell, transfer or lease
all or substantially all of its assets to, any other Person
provided that (i) the Company shall be the continuing
corporation, or the successor (if other than the Company) shall
be a corporation organized and existing under the laws of the
United States of America or a State thereof and such corporation
shall expressly assume the obligations of the Company under the
Purchase Contracts, this Agreement and the Pledge Agreement by
one or more supplemental agreements in form satisfactory to the
Agent and the Collateral Agent, executed and delivered to the
Agent and the Collateral Agent by such corporation, (ii) the
Company or such successor corporation, as the case may be, shall
not immediately after such merger, consolidation, sale, transfer
or lease, be in default in the performance of any of its
obligations under this Agreement or the Pledge Agreement and
(iii) such merger, consolidation, sale, transfer or lease shall
not cause the Trust for United States federal income tax purposes
to be classified as other than a grantor trust.
In addition, the Company covenants that it will not
merge or consolidate with any other Person or sell, transfer or
lease all or substantially all of its assets to any Person unless
in connection with any such merger, consolidation, sale, transfer
or lease (other than a merger, consolidation, sale, transfer or
lease which would not result in any change in the terms of the
Series F Preferred Stock, if the Series F Preferred Stock were
then outstanding), the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the
case may be, executes and delivers to the Agent an amendment of
this Agreement providing that the Holder of each Certificate then
Outstanding shall have the right and obligation to purchase on
the Purchase Date, either directly or indirectly through the
purchase of depositary shares, the same number of shares of
preferred stock of the surviving Person, having substantially the
same preferences, rights and powers as the Series F Preferred
Stock evidenced by the Depositary Shares, as such Holder would
have purchased if a Purchase Date with respect to such Purchase
Contracts had occurred immediately prior to such consolidation,
merger, sale, transfer or lease. If, however, the surviving
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Person does not have publicly held equity securities outstanding
but is a direct or indirect subsidiary of a Person that does,
then, at the election of the surviving Person, the preferred
stock may be preferred stock of any such publicly held parent.
SECTION 902. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale,
transfer or lease and upon any such assumption by the successor
corporation, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had
been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own
name or in the name of the Salomon Inc, any or all of the
Certificates issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Agent; and, upon
the order of such successor corporation, instead of the Company
and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on
behalf of the Holders and deliver any Certificates which
previously shall have been signed and delivered by the officers
of the Company to the Agent for authentication and execution, and
any Certificate which such successor Company thereafter shall
cause to be signed and delivered to the Agent for that purpose.
All the Units or Separated Purchase Contracts, as the case may
be, so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Units or Separated Purchase
Contracts, as the case may be, theretofore or thereafter issued
in accordance with the terms of this Agreement as though all of
such Units or Separated Purchase Contracts, as the case may be,
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale,
transfer or lease, such change in phraseology and form (but not
in substance) may be made in the Certificates evidencing Units
and Separated Purchase Contracts, thereafter to be issued as may
be appropriate.
ARTICLE TEN
COVENANTS
SECTION 1001. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Units and the Separated Purchase
Contracts that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the
terms of the Purchase Contracts and this Agreement.
SECTION 1002. Maintenance of Office or Agency.
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The Company will maintain in The City of New York an
office or agency where Certificates may be presented or
surrendered for acquisition of Depositary Shares upon settlement
of the Purchase Contracts and for transfer of Preferred
Securities or payment of the Redemption Price or Liquidation
Distribution in respect of Preferred Securities upon occurrence
of a Termination Event, where Certificates may be surrendered for
registration of transfer, exchange or the separation or
reestablishment of a Unit and where notices and demands to or
upon the Company in respect of the Units or Separated Purchase
Contracts and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any
change in the location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Agent with the address
thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office, and the Company
hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or
more other offices or agencies where Certificates may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligations to maintain an office or
agency in The City of New York for such purposes. The Company
will give prompt written notice to the Agent of any such
designation or rescission and of any change in the location of
any such other office or agency. The Company hereby designates as
the place of payment for the Units and Separated Purchase
Contracts the Corporate Trust Office and appoints the Agent at
its Corporate Trust Office as paying agent in such city.
SECTION 1003. Company to Reserve Series F Preferred Stock.
The Company shall at all times prior to the Purchase
Date reserve and keep available, free from preemptive rights, out
of its authorized but unissued % Cumulative Preferred Stock,
Series F, the full number of shares of Series F Preferred Stock
issuable against tender of payment for the Depositary Shares
evidencing such shares of Series F Preferred Stock in respect of
all Purchase Contracts constituting a part of the Outstanding
Units and Separated Purchase Contracts.
SECTION 1004. Covenants as to Series F Preferred Stock.
The Company covenants that all shares of Series F
Preferred Stock which may be issued against tender of payment for
the Depositary Shares evidencing such shares of Preferred Stock
in respect of any outstanding Purchase Contract will, upon
issuance, be duly authorized, validly issued, fully paid and
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nonassessable. The Company further covenants and agrees not to
take any action which will cause any Series F Preferred Stock to
be issued prior to the Purchase Date or to file any amendment to
the Certificate of Designations designating the Series F
Preferred Stock, or to take any other action which would change
the terms of the Series F Preferred Stock or the Depositary
Shares evidencing such Series F Preferred Stock, except as
permitted by this Agreement.
SECTION 1005. Statements of Officers of the Company as to
Default.
The Company will deliver to the Agent, within 120 days
after the end of each fiscal year of the Company ending after the
date hereof, an Officers' Certificate stating whether or not to
the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in
default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
SALOMON INC
By:______________________________
Attested by:___________________________
CHEMICAL BANK, as Agent
By:______________________________
Attested by:___________________________
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EXHIBIT A
This Security Certificate is a Global Unit Certificate
within the meaning of the Unit Agreement hereinafter referred to
and is registered in the name of the Clearing Agency or a nominee
thereof. This Security Certificate may not be exchanged in whole
or in part for a Security Certificate registered, and no transfer
of this Security Certificate in whole or in part may be
registered, in the name of any person other than such Clearing
Agency or a nominee thereof, except in the limited circumstances
described in the Unit Agreement.
Unless this Security Certificate is presented by an
authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the Company or its agent for
registration of transfer, exchange or payment, and any Security
Certificate issued is registered in the name of Cede & Co., or
such other name as requested by an authorized representative of
The Depository Trust Company, and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No.-------- Cusip No. -------
Form of Face of Unit Certificate
% Trust Preferred StockSM (TRUPSSM) Units
------- Units
This Unit Certificate certifies that is the registered
Holder of the number of Units set forth above. Each Unit
represents ownership by the Holder of one % Preferred Security
(the "Preferred Security") of SI Financing Trust I, a Delaware
statutory business trust, having a stated liquidation amount of
$25, subject to the Pledge of such Preferred Security by such
Holder pursuant to the Pledge Agreement, and the rights and
obligations of the Holder under one Purchase Contract with
Salomon Inc, a Delaware corporation (the "Company").
Pursuant to the Pledge Agreement, the Preferred
Security constituting part of each Unit evidenced hereby has been
pledged to the Collateral Agent to secure the obligations of the
Holder under the Purchase Contract constituting part of such
Unit.
The Pledge Agreement provides that all payments of the
Stated Amount of, or cash distributions on, any Pledged Preferred
Securities (as defined in the Pledge Agreement) constituting part
of the Units received by the Collateral Agent shall be paid by
the Collateral Agent by wire transfer in same day funds (i) in
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the case of (A) cash distributions with respect to Pledged
Preferred Securities and (B) any payments of the Stated Amount
with respect to any Preferred Securities that have been released
from the Pledge pursuant to the Pledge Agreement, to the Agent to
the account designated by the Agent for such purpose, no later
than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day
that is not a Business Day or on or after 12:30 p.m., New York
City time, on a Business Day, then such payment shall be made no
later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the Stated
Amount of any Pledged Preferred Securities, to the Company on the
relevant Payment Date (as defined below) in accordance with the
terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the Units of which such
Preferred Securities are a part under the Purchase Contracts
forming a part of such Units. Distributions on any Preferred
Security forming part of a Unit evidenced hereby paid on
, , or , commencing
, 1996 (each, a "Payment Date"), shall, subject to
receipt thereof by the Agent from the Collateral Agent, be paid
to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of
business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the
Holder of this Unit Certificate to purchase, and the Company to
sell, on , 2021 (the "Stated Purchase Date"), or, at the election
of the Company, subject to the terms of the Unit Agreement, on
any earlier Payment Date on or after , 1996 (such Payment Date,
an "Early Purchase Date" and together with the Stated Purchase
Date, a "Purchase Date"), one Depositary Share (a "Depositary
Share") representing a one-twentieth interest in a share of %
Cumulative Preferred Stock, Series F, Liquidation Preference $500
per share (the "Series F Preferred Stock"), of the Company at a
price equal to $25 per Depositary Share, unless a Termination
Event shall have occurred, all as provided in the Unit Agreement
and more fully described on the reverse hereof. A Holder may
cause the Preferred Security pledged to secure the obligations
under the Purchase Contract of the Holder of the Unit of which
such Purchase Contract is a part to be repaid and the proceeds
therefrom to be used to pay the purchase price of the Depositary
Share under such Purchase Contract.
The Company shall pay, on each Payment Date, in
respect of each Purchase Contract forming part of a Unit
evidenced hereby a fee (the "Contract Fee") equal to % per annum
of the Stated Amount, from , 1996, computed on the basis of a
360-day year of twelve 30-day months. Such Contract Fee shall be
payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of
A-2
<PAGE>
business on the Record Date for such Payment Date.
Distributions on the Preferred Securities and Contract
Fees will be payable at the office of the Agent in The City of
New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on
the Unit Register.
Reference is hereby made to the further provisions set
forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has
been executed by the Agent by manual signature, this Unit
Certificate shall not be entitled to any benefit under the Pledge
Agreement or the Unit Agreement or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
Dated:
SALOMON INC
By:---------------------------
Name:
Title:
Attest:
Name:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder
under the Purchase Contracts
evidenced hereby)
By: CHEMICAL BANK, as
Attorney-in-Fact of such
Holder
By:---------------------------
Name:
Title:
---------------------------------------------
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Units referred to in the
within-mentioned Unit Agreement.
CHEMICAL BANK,
as Agent
A-3
<PAGE>
By:--------------------------
Authorized Officer
<PAGE>
Form of Reverse of Unit Certificate
Each Purchase Contract evidenced hereby is governed by
a Unit Agreement, dated as of , 1996 (as supplemented from time
to time, the "Unit Agreement"), between the Company and Chemical
Bank, as Unit Agent (including its successors thereunder, herein
called the "Agent"), to which Unit Agreement and supplemental
agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Company and the
Holders of Units and of the terms upon which the Unit
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the
Holder of this Unit Certificate to purchase, and the Company to
sell, on the Purchase Date at a purchase price of $25, one
Depositary Share, unless, on or prior to the Purchase Date, a
Termination Event shall have occurred. The Purchase Contract
evidenced hereby shall not entitle the Holder to purchase a
Depositary Share prior to the Purchase Date or from and after the
date a Termination Event has occurred.
In accordance with the terms of the Unit Agreement,
the Holder of this Unit Certificate shall pay the purchase price
for the Depositary Share purchased pursuant to each Purchase
Contract evidenced hereby by effecting either a Cash Settlement
or a Collateral Settlement of each such Purchase Contract. A
Holder of a Unit who fails to make an effective Cash Settlement
or fails to deliver an instruction for a Collateral Settlement in
respect of a Purchase Contract will be deemed to have elected a
Collateral Settlement of such Purchase Contract, and such
Purchase Contract automatically will be settled accordingly.
Each Purchase Contract evidenced hereby and the
obligations and rights of the Company and the Holder thereunder
shall terminate if a Termination Event shall have occurred. Upon
the occurrence of a Termination Event, the Company shall give
written notice to the Agent and to the Holders, at their
addresses as they appear in the Unit Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Preferred Security (as defined in the Pledge
Agreement) forming a part of each Unit, or the Redemption Price
or Liquidation Distribution received in respect of such Pledged
A-4
<PAGE>
Preferred Security, from the Pledge. A Unit shall thereafter
represent the right to receive the Preferred Security forming a
part of such Unit, or the Redemption Price or Liquidation
Distribution received in respect of such Preferred Security, and
any accrued Contract Fees on the Purchase Contract forming a part
of such Unit in accordance with the terms of the Unit Agreement
and the Pledge Agreement. Contract Fees shall cease to accrue in
respect of any period from and after the date of a Termination
Event.
Under the terms of the Pledge Agreement, the Agent
will be entitled to exercise the voting and any other consensual
rights pertaining to the Pledged Preferred Securities. Upon
receipt of notice of any meeting at which holders of Preferred
Securities are entitled to vote or solicitation of consents,
waivers or proxies of holders of Preferred Securities, the Agent
shall, as soon as practicable thereafter, mail to the Unitholders
a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Unitholder on the
record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Preferred Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the
voting rights pertaining to the Preferred Securities evidenced by
their Units and (c) stating the manner in which such instructions
may be given. Upon the written request of the Unitholders on such
record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Preferred
Securities as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder
of a Unit, the Agent shall abstain from voting the Preferred
Security evidenced by such Unit. The Trust shall covenant in the
Declaration to take all action which may be deemed necessary by
the Agent in order to enable the Agent to vote such Preferred
Securities or to cause such Preferred Securities to be voted.
In the event Subordinated Debt Securities are received
by the Collateral Agent in respect of Pledged Preferred
Securities upon the occurrence of a Tax Event, Investment Company
Event, Optional Distribution or liquidation of the Trust, the
Subordinated Debt Securities shall be held by the Collateral
Agent to secure the obligations of each Holder of Units to
purchase Depositary Shares under the Purchase Contracts evidenced
by such Units. Thereafter, the Holders and the Collateral Agent
shall have such rights and obligations with respect to the
Subordinated Debt Securities that the Holders and the Collateral
Agent had in respect of the Pledged Preferred Securities, and any
reference in the Unit Agreement or Pledge Agreement to the
Preferred Securities shall be deemed to be a reference to the
Subordinated Debt Securities.
A-5
<PAGE>
The Unit Certificates are issuable only in registered
form and only in denominations of a single Unit and any integral
multiple thereof. The transfer of any Unit Certificate will be
registered and Unit Certificates may be exchanged as provided in
the Unit Agreement. The Unit Registrar may require a Holder,
among other things, to furnish appropriate endorsements and
transfer documents permitted by the Unit Agreement. No service
charge shall be required for any such registration of transfer or
exchange, but the Company and the Agent may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Except as provided in the Unit
Agreement, for so long as the Purchase Contract underlying a Unit
remains in effect, such Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder
of such Unit in respect of the Preferred Security and Purchase
Contract constituting such Unit may be transferred and exchanged
only as a Unit. A Purchase Contract separated from the related
Preferred Security and secured by Eligible Collateral in
accordance with the terms of the Unit Agreement and the Pledge
Agreement will be non-transferable without the prior written
consent of the Company and will bear a restrictive legend to such
effect.
A Holder of Separated Purchase Contracts may
reestablish Units by delivering Preferred Securities to the
Collateral Agent in exchange for the release of Eligible
Collateral having a corresponding aggregate principal amount in
accordance with the terms of the Unit Agreement and the Pledge
Agreement.
Upon registration of transfer of this Unit
Certificate, the transferee shall be bound (without the necessity
of any other action on the part of such transferee, except as may
be required by the Agent pursuant to the Unit Agreement), under
the terms of the Unit Agreement and the Purchase Contracts
evidenced hereby and the transferor shall be released from the
obligations under the Purchase Contracts evidenced by this Unit
Certificate. The Company covenants and agrees, and the Holder, by
his acceptance hereof, likewise covenants and agrees, to be bound
by the provisions of this paragraph.
The Holder of this Unit Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the
related Purchase Contracts forming part of the Units evidenced
hereby on his behalf as his attorney-in-fact, agrees to be bound
by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents
to the provisions of the Unit Agreement, authorizes the Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Preferred
Securities underlying this Unit Certificate pursuant to the
Pledge Agreement.
A-6
<PAGE>
Subject to certain exceptions, the provisions of the
Unit Agreement may be amended with the consent of the Holders of
not less than 66 2/3% of the Outstanding Units and Separated
Purchase Contracts.
All terms used herein which are defined in the Unit
Agreement have the meanings set forth therein.
The Unit Agreement, the Units and the Purchase
Contracts shall for all purposes be governed by and construed in
accordance with the laws of the State of New York without regard
to the conflicts of laws principles thereof.
The Company, the Agent and any agent of the Company or
the Agent may treat the Person in whose name this Unit
Certificate is registered as the owner of the Units evidenced
hereby for the purpose of receiving payments of distributions on
the Preferred Securities, receiving payments of Contract Fees,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be
overdue and not withstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the
settlement thereof, entitle the Holder to any of the rights of a
holder of Depositary Shares, Series F Preferred Stock or any
other shares of capital stock of the Company.
A copy of the Unit Agreement is available for
inspection at the offices of the Agent.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as
though they were written out in full according to applicable laws
or regulations:
<PAGE>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ---- Custodian ------
TEN ENT - as tenants by the (Cust) (Minor)
A-7
<PAGE>
entireties Under Uniform Gifts
JT TEN - as joint tenants with to Minors Act
right of survivorship
and not as tenants in ---------------------
common (State)
<PAGE>
Additional abbreviations may also be used though not in the above
list.
---------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
- -----------------------------------
|
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
- ----------------------------------------------------------------
of Assignee the within Unit Certificates and all rights
- ----------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- ------------------------------------------------- attorney to
transfer said Unit Certificates on the books of Salomon Inc with
full power of substitution in the premises.
Dated: -------------------- -----------------------------
Signature
-----------------------------
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Unit Certificates in every
particular, without
alteration or enlargement or
any change whatsoever.
A-8
<PAGE>
EXHIBIT B
No. ------------
Form of Face of Separated Purchase Contract Certificate
---------- Purchase Contracts
THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF
THE PURCHASE CONTRACTS EVIDENCED BY THIS CERTIFICATE, OR ANY
INTEREST IN SUCH PURCHASE CONTRACTS, IS RESTRICTED BY THE TERMS
OF THE UNIT AGREEMENT DATED , 1996, A COPY OF WHICH IS ON FILE AT
THE CORPORATE TRUST OFFICE OF CHEMICAL BANK, AS UNIT AGENT. NO
SUCH SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION SHALL BE
EFFECTIVE WITHOUT THE PRIOR WRITTEN CONSENT OF SALOMON INC.
This Separated Purchase Contract Certificate certifies
that is the registered Holder of the number of Purchase Contracts
set forth above. Each Purchase Contract evidenced hereby
obligates the Holder of this Separated Purchase Contract
Certificate to purchase, and Salomon Inc, a Delaware corporation
(the "Company"), to sell, on , 2021 (the "Stated Purchase Date"),
or, at the election of the Company, subject to the terms of the
Unit Agreement, on any earlier Payment Date (as defined below) on
or after , 1996 (such Payment Date, an "Early Purchase Date" and
together with the Stated Purchase Date, a "Purchase Date"), one
Depositary Share (a "Depositary Share") representing a
one-twentieth interest in a share of % Cumulative Preferred
Stock, Series F, Liquidation Preference $500 per share (the
"Series F Preferred Stock"), of the Company at a price equal to
$25 per Depositary Share, unless a Termination Event shall have
occurred, all as provided in the Unit Agreement and more fully
described on the reverse hereof. The purchase price for the
Depositary Share purchased pursuant to each Purchase Contract
evidenced hereby will be paid by application of the proceeds from
the Eligible Collateral pledged to secure the obligations under
such Purchase Contract in accordance with the terms of the Pledge
Agreement.
The Company shall pay on each , , or , commencing ,
1996 (each, a "Payment Date"), in respect of each Purchase
Contract
evidenced hereby a fee (the "Contract Fee") equal to % per annum of
the Stated Amount, from , 1996, computed on the basis of a
360-day year of twelve 30-day months. Such Contract Fee shall be
payable to the Person in whose name this Separated Purchase
Contract Certificate (or a Predecessor Separated Purchase
Contract Certificate) is registered at the close of business on
the Record Date for such Payment Date.
B-1
<PAGE>
Contract Fees will be payable at the office of the
Agent in The City of New York or, at the option of the Company,
by check mailed to the address of the Person entitled thereto as
such address appears on the Separated Purchase Contract Register.
Reference is hereby made to the further provisions set
forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has
been executed by the Agent by manual signature, this Separated
Purchase Contract Certificate shall not be entitled to any
benefit under the Pledge Agreement or the Unit Agreement or be
valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
Dated:
SALOMON INC
By:___________________________
Name:
Title:
Attest:
Name:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder
under the Purchase Contracts
evidenced hereby)
By: CHEMICAL BANK, as
Attorney-in-Fact of such
Holder
By:____________________________
Name:
Title:
---------------------------
B-2
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Separated Purchase Contracts
referred to in the within-mentioned Unit Agreement.
CHEMICAL BANK,
as Agent
By:_________________________
Authorized Officer
<PAGE>
Form of Reverse of Separated Purchase Contract Certificate
Each Purchase Contract evidenced hereby is governed by
a Unit Agreement, dated as of , 1996 (as supplemented from time
to time, the "Unit Agreement") between the Company and Chemical
Bank, as Unit Agent (including its successors thereunder, herein
called the "Agent"), to which Unit Agreement and supplemental
agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Company and the
Holders of Separated Purchase Contracts and of the terms upon
which the Separated Purchase Contract Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the
Holder of this Separated Purchase Contract Certificate to
purchase, and the Company to sell, on the Purchase Date at a
purchase price of $25, one Depositary Share, unless, on or prior
to the Purchase Date, a Termination Event shall have occurred.
The Purchase Contract evidenced hereby shall not entitle the
Holder to purchase a Depositary Share prior to the Purchase Date
or from and after the date a Termination Event has occurred.
The purchase price for the Depositary Share purchased
pursuant to each Purchase Contract evidenced hereby will be paid
by application of payments received by the Company on the
Purchase Date from the Collateral Agent pursuant to the Pledge
Agreement dated as of , 1996 (as supplemented from time to time,
the "Pledge Agreement") by and among the Company, The Bank of New
York, as Collateral Agent, and the Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time in respect
of the proceeds of the related Eligible Collateral held by the
Collateral Agent to secure each such Purchase Contract without
the Collateral Agent receiving any instruction from the Holder of
B-3
<PAGE>
this Separated Purchase Contract Certificate.
Each Purchase Contract and the obligations and rights
of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall give written notice to the
Agent and to the Holders, at their addresses as they appear in
the Unit Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the related Eligible
Collateral to the Holder from the Pledge in accordance with the
terms of the Pledge Agreement. A Separated Purchase Contract
shall thereafter represent the right to receive any accrued
Contract Fees on the Purchase Contract represented by such
Separated Purchase Contract in accordance with the terms of the
Unit Agreement. Contract Fees shall cease to accrue in respect of
any period from and after the date of a Termination Event.
The Separated Purchase Contract Certificates are
issuable only in registered form and only in denominations of a
single Unit and any integral multiple thereof. The transfer of
any Separated Purchase Contract Certificate will be registered
and Separated Purchase Contract Certificates may be exchanged as
provided in the Unit Agreement. The Separated Purchase Contract
Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the
Unit Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the
Agent may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
A Holder of Separated Purchase Contracts may
reestablish Units by delivering Preferred Securities to the
Collateral Agent in exchange for the release of Eligible
Collateral having a corresponding aggregate principal amount in
accordance with the terms of the Unit Agreement and the Pledge
Agreement.
Upon registration of the transfer of this Separated
Purchase Contract Certificate to which the Company has given its
prior written consent, the transferee shall be bound (without the
necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant to the Unit
Agreement) under the terms of the Unit Agreement and the Purchase
Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by
this Separated Purchase Contract Certificate. The Company
covenants and agrees, and the Holder, by his acceptance hereof,
likewise covenants and agrees, to be bound by the provisions of
this paragraph.
The Holder of this Separated Purchase Contract
Certificate, by his acceptance hereof, authorizes the Agent to
B-4
<PAGE>
enter into and perform the Purchase Contracts evidenced hereby on
his behalf as his attorney-in-fact, agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform his
obligations under such Purchase Contracts, consents to the
provisions of the Unit Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Eligible
Collateral securing the Purchase Contracts evidenced by this
Separated Purchase Contract Certificate pursuant to the Pledge
Agreement.
Subject to certain exceptions, the provisions of the
Unit Agreement may be amended with the consent of the Holders of
not less than 66 2/3% of the Outstanding Units and Separated
Purchase Contracts.
All terms used herein which are defined in the Unit
Agreement have the meanings set forth therein.
The Unit Agreement, the Separated Purchase Contracts
and the Purchase Contracts shall for all purposes be governed by
and construed in accordance with the laws of the State of New
York without regard to the conflicts of laws principles thereof.
The Company, the Agent and any agent of the Company or
the Agent may treat the Person in whose name this Separated
Purchase Contract Certificate is registered as the owner of the
Separated Purchase Contracts evidenced hereby for the purpose of
receiving payments of Contract Fees, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not
any payments in respect thereof be overdue and not withstanding
any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the
settlement thereof, entitle the Holder to any of the rights of a
holder of Depositary Shares, Series F Preferred Stock or any
other shares of capital stock of the Company.
A copy of the Unit Agreement is available for
inspection at the offices of the Agent.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as
though they were written out in full according to applicable laws
B-5
<PAGE>
or regulations:
<PAGE>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ---- Custodian ------
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
JT TEN - as joint tenants with to Minors Act
right of survivorship
and not as tenants in ---------------------
common (State)
<PAGE>
Additional abbreviations may also be used though not in the above
list.
---------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee
- -----------------------------------
|
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
- ----------------------------------------------------------------
of Assignee the within Unit Certificates and all rights
- ----------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- ------------------------------------------------- attorney to
transfer said Unit Certificates on the books of Salomon Inc with
full power of substitution in the premises.
Dated: -------------------- -----------------------------
Signature
B-6
<PAGE>
-----------------------------
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Unit Certificates in every
particular, without
alteration or enlargement or
any change whatsoever.
B-7
<PAGE>
EXHIBIT C
INSTRUCTION TO COLLATERAL AGENT
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: % Trust Preferred StockSM(TRUPSSM) Units (the
"Units") consisting of % Preferred Securities
(the "Preferred Securities") of SI Financing
Trust I (the "Trust") and Purchase Contracts (the
"Purchase Contracts") of Salomon Inc (the "Company")
----------------------------------------------------
Chemical Bank (the "Agent") hereby notifies you (the
"Collateral Agent"), with reference to the Unit Agreement dated
as of June , 1996 (the "Unit Agreement"; any capitalized term
used herein and not defined shall have its respective meaning as
set forth in the Unit Agreement) among the Company and the Agent,
as agent for the Unitholders and Holders of Separated Purchase
Contracts from time to time, pursuant to which the Units were
issued, that [Unitholder] (the "Unitholder") has elected to
effect a Collateral Settlement of Purchase Contracts. The Agent
hereby instructs the Collateral Agent to present the Preferred
Securities related to such Purchase Contracts to the Trust for
repayment prior to 10:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Date at the
Repayment Price and to apply the product of the Stated Amount and
the number of such Purchase Contracts to the settlement of the
Unitholder's Purchase Contracts.
IN WITNESS WHEREOF, the undersigned, on behalf of the
Agent, has executed and delivered this Instruction as of the
day of , .
CHEMICAL BANK
By:__________________________
Name:
Title:
C-1
<PAGE>
Exhibit 4(m)
- ----------------------------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
SALOMON INC
Dated as of , 1996
- ----------------------------------------------------------------
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (the
"Preferred Securities Guarantee"), dated as of , 1996, is
executed and delivered by Salomon Inc, a Delaware corporation
(the "Guarantor"), and Chemical Bank, a New York banking
corporation, as trustee (the "Preferred Guarantee Trustee"), for
the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of SI Financing
Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Declaration"), dated as of , 1996,
among the trustees of the Issuer named therein, the Guarantor, as
Sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof $ aggregate stated liquidation amount
of Preferred Securities designated the % Trust Preferred
Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions
set forth herein; and
WHEREAS, the Guarantor is also executing and
delivering a common securities guarantee agreement (the "Common
Securities Guarantee") in substantially identical terms to this
Preferred Securities Guarantee for the benefit of the holders of
the Common Securities (as defined herein) except that if an Event
of Default (as defined in the Indenture (as defined herein)), has
occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by
each Holder of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes
and delivers this Preferred Securities Guarantee for the benefit
of the Holders.
1
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the
context otherwise requires:
(a) Capitalized terms used in this Preferred
Securities Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred
Securities Guarantee has the same meaning throughout;
(c) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee" are to this
Preferred Securities Guarantee as modified, supplemented or
amended from time to time;
(d) all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles and Sections
of this Preferred Securities Guarantee unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee
unless otherwise defined in this Preferred Securities Guarantee
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Authorized Officer" of a Person means any Person that
is authorized to bind such Person.
"Common Securities" means the securities representing
common undivided beneficial interests in the assets of the
Issuer.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"Direction" by a Person means a written direction
signed:
(a) if the Person is a natural person, by that Person;
2
<PAGE>
or
(b) in any other case, in the name of such Person by
one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Preferred
Securities Guarantee for more than 30 days.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by the Issuer:
(i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such
Preferred Securities to the extent the Issuer shall have funds
available therefore;
(ii) the amount payable upon redemption to the extent
the Issuer has funds available therefor, with respect to any
Preferred Securities called for redemption by the Issuer;
(iii) the amount payable with respect to any Preferred
Securities presented for repayment by the Holders to the extent
the Issuer has funds available therefor; and
(iv) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection
with the distribution of Subordinated Debt Securities to the
Holders in exchange for Preferred Securities as provided in the
Declaration or the redemption or repayment of all the Preferred
Securities), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has
occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities
Preferred Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities;
provided, however, that, in determining whether the holders of
the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee
Trustee, any Affiliate of the Preferred Guarantee Trustee, or any
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officers, directors, shareholders, members, partners, employees,
representatives or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of December
1, 1988, as supplemented from time to time and as supplemented by
the Third Supplemental Indenture dated as of , 1996, between the
Guarantor and Bankers Trust Company, as trustee.
"Issuer" has the meaning specified in the recitals to
this Preferred Securities Guarantee.
"Majority in liquidation amount of the Preferred
Securities" means, except as provided in the terms of the
Preferred Securities or by the Trust Indenture Act, a vote by
Holder(s) of Preferred Securities, voting separately as a class,
of more than 50% of the liquidation amount (including the stated
amount that would be paid on redemption, repayment, liquidation
or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all
Preferred Securities then outstanding.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by two Authorized Officers of such
Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Preferred Guarantee Trustee" means Chemical Bank, a
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New York banking corporation, until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred
Guarantee Trustee.
"Responsible Officer" means, with respect to the
Preferred Guarantee Trustee, any officer of the Preferred
Guarantee Trustee with responsibility for the administration of
this Preferred Securities Guarantee and also means, with respect
to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"66-2/3 in liquidation amount of the Preferred
Securities" means, except as provided in the terms of the
Preferred Securities or by the Trust Indenture Act, a vote by
Holder(s) of Preferred Securities, voting separately as a class,
of more than 66-2/3% of the liquidation amount (including the
stated amount that would be paid on redemption, repayment,
liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of
all Preferred Securities then outstanding.
"Subordinated Debt Securities" means the series of
subordinated debt securities of the Guarantor designated the %
Subordinated Debt Securities due , 2026 held by the Property
Trustee of the Issuer.
"Successor Preferred Guarantee Trustee" means a
successor Preferred Guarantee Trustee possessing the
qualifications to act as Preferred Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
"25% in liquidation amount of the Preferred
Securities" means, except as provided in the terms of the
Preferred Securities or by the Trust Indenture Act, a vote by
Holder(s) of Preferred Securities, voting separately as a class,
of more than 25% of the liquidation amount (including the stated
amount that would be paid on redemption, repayment, liquidation
or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all
Preferred Securities then outstanding.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
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(a) This Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be
part of this Preferred Securities Guarantee, which are
incorporated by reference herein, and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts
with the duties imposed by Section 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred
Guarantee Trustee with a list, in such form as the Preferred
Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within 14 days after January 1 and
June 30 of each year, and (ii) at any other time within 30 days
of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 14 days before such List of
Holders is given to the Preferred Guarantee Trustee, provided
that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of
a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with
its obligations under Section 311(a), 311(b) and Section 312(b)
of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the
Preferred Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee
Trustee such documents, reports and information as required by
Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture
Act.
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SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee
Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Preferred Securities
Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1)
may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of
all of the Preferred Securities, waive any past Event of Default
and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90
days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the
Preferred Securities, notices of all Events of Default known to
the Preferred Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided that the
Preferred Guarantee Trustee shall be protected in withholding
such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good
faith determines that the withholding of such notice is in the
interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the
Preferred Guarantee Trustee shall have received written notice,
or a Responsible Officer charged with the administration of the
Declaration shall have obtained written notice, of such Event of
Default.
SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III
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POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held
by the Preferred Guarantee Trustee for the benefit of the Holders
of the Preferred Securities, and the Preferred Guarantee Trustee
shall not transfer this Preferred Securities Guarantee to any
Person except a Holder of Preferred Securities exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred
Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor
Preferred Guarantee Trustee. The right, title and interest of the
Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is
continuing, the Preferred Guarantee Trustee shall, subject to the
provisions of Section 3.1(c), enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred
Securities.
(c) The Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all
Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section
2.6), the Preferred Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities
Guarantee shall be construed to relieve the Preferred Guarantee
Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the
Preferred Guarantee Trustee shall be determined solely by the
express provisions of this Preferred Securities Guarantee, and
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the Preferred Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee,
and no implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part
of the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required
to be furnished to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a
Responsible Officer of the Preferred Guarantee Trustee, unless it
shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the Holders
of not less than a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities
Guarantee shall require the Preferred Guarantee Trustee to expend
or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Preferred Securities
Guarantee or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
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(i) the Preferred Guarantee Trustee may rely and
shall be fully protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by a Direction or an Officers'
Certificate;
(iii) whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Guarantee Trustee
shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the
Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the
Guarantor;
(iv) the Preferred Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or registration
thereof);
(v) the Preferred Guarantee Trustee may consult
with counsel, and the written advice or opinion of such counsel
with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include
any of the Guarantor's employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee from
any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers
vested in it by this Preferred Securities Guarantee at the
request or direction of any Holder, unless such Holder shall have
provided to the Preferred Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in
the position of the Preferred Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may
be requested by the Preferred Guarantee Trustee; provided that
nothing contained in this Section 3.2(a)(vi) shall be taken to
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relieve the Preferred Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Preferred Securities Guarantee;
(vii) the Preferred Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document, but the Preferred Guarantee Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Preferred Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders of the
Preferred Securities, and the signature of the Preferred
Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of
the terms and provisions of this Preferred Securities Guarantee,
both of which shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such action; and
(x) whenever in the administration of this
Preferred Securities Guarantee the Preferred Guarantee Trustee
shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action
hereunder, the Preferred Guarantee Trustee (i) may request
instructions from the Holders of the Preferred Securities, (ii)
may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii)
shall be protected in acting in accordance with such
instructions.
(b) No provision of this Preferred Securities
Guarantee shall be deemed to impose any duty or obligation on the
Preferred Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal,
or in which the Preferred Guarantee Trustee shall be unqualified
or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the
Preferred Guarantee Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee.
The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and
the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency
of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision
or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the
Preferred Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Preferred Guarantee
Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees.
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(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
(b) The Preferred Guarantee Trustee shall not be
removed in accordance with Section 4.2(b) until a Successor
Preferred Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor
Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to
office shall hold office until a Successor Preferred Guarantee
Trustee shall have been appointed or until its removal or
resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee
and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by instrument in
writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall
have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Preferred Guarantee
Trustee may petition any court of competent jurisdiction for
appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders
or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of
this Preferred Securities Guarantee and of any liability to which
it applies or may apply, presentment, demand for payment, any
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right to require a proceeding first against the Issuer or any
other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption
and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of
the Guarantor under this Preferred Securities Guarantee shall in
no way be affected or impaired by reason of the happening from
time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Preferred Securities to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions, the amount
payable upon redemption or repayment, Liquidation Distribution or
any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with,
the Preferred Securities;
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the Preferred Securities, or any action
on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of
the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
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There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time,
method and place of conducting of any proceeding for any remedy
available to the Preferred Guarantee Trustee in respect of this
Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to
enforce this Preferred Securities Guarantee, any Holder of
Preferred Securities may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or
any other Person. Notwithstanding the foregoing, if the Guarantor
has failed to make a Guarantee Payment, a Holder of Preferred
Securities may directly institute a proceeding against the
Guarantor for enforcement of the Preferred Securities Guarantee
for such payment. The Guarantor waives any right or remedy to
require that any action be brought first against the Issuer or
any other Person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a
guarantee of payment and not of collection.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any)
rights of the Holders of Preferred Securities against the Issuer
in respect of any amounts paid to such Holders by the Guarantor
under this Preferred Securities Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise
any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Preferred Securities Guarantee, if,
at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations.
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The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain
outstanding, if (i) the Guarantor shall be in default with
respect to its Guarantee Payments or other obligations hereunder
or (ii) there shall have occurred and be continuing an event of
default or an event that, with the giving of notice or the lapse
of time or both, would constitute an event of default under the
Indenture, then (a) the Guarantor shall not declare or pay any
dividend on, or make any distributions with respect to, or
redeem, purchase or make a liquidation payment with respect to,
any of its capital stock, except for dividends or distributions
in shares of its capital stock of the same class on which such
dividend or distribution is being paid and conversions or
exchanges or common stock of one class into common stock of
another class, and (b) the Guarantor shall not make any payment
of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Subordinated Debt
Securities (except by conversion into or exchange for shares of
its capital stock and except for a redemption, purchase or other
acquisition of shares of its capital stock made for the purpose
of any employee incentive plan or benefit plan of the Guarantor
or any of its subsidiaries).
SECTION 6.2 Ranking.
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other
liabilities of the Guarantor except any liabilities that may be
made pari passu expressly by their terms, (ii) pari passu with
the most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Preferred Securities Guarantee shall terminate as
to each Holder upon (i) full payment of the amount payable upon
redemption or repayment of such Holder's Preferred Securities or
(ii) upon the distribution of the Subordinated Debt Securities to
the Holders of all of the Preferred Securities, and will
terminate completely upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Preferred Securities
Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the
Preferred Securities or under this Preferred Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Preferred Securities
Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on
such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Preferred Securities might properly
be paid.
17
<PAGE>
SECTION 8.2 Indemnification and Compensation.
(a) To the fullest extent permitted by applicable law,
the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a
manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by
this in accordance with this Preferred Securities Guarantee,
except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by
such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Guarantor prior to the
final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled
to be indemnified as authorized in Section 8.2(a).
(c) The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of the Preferred
Securities Guarantee.
(d) The Guarantor agrees to pay the Preferred
Guarantee Trustee from time to time such compensation for all
services rendered by the Preferred Guarantee Trustee hereunder as
may be mutually agreed upon in writing by the Guarantor and the
Preferred Guarantee Trustee and, except as otherwise expressly
provided herein, to reimburse the Preferred Guarantee Trustee
upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Preferred Guarantee Trustee in
accordance with any provision of this Preferred Securities
Guarantee, except such expense, disbursement or advance as may be
attributable to its negligence or bad faith.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this
Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Preferred
18
<PAGE>
Securities then outstanding. Except in connection with any
permitted merger or consolidation of the Guarantor with or into
another entity or any permitted sale, transfer or lease of the
Guarantor's assets to another entity under the Indenture, the
Guarantor may not assign its rights or delegate its obligations
under the Preferred Securities Guarantee without the prior
approval of the Holders of at least 66-2/3% in liquidation amount
of the Preferred Securities.
SECTION 9.2 Amendments.
Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case
no consent of Holders will be required), this Preferred
Securities Guarantee may only be amended by a writing signed by
both the Guarantor and the Preferred Guarantee Trustee and with
the prior approval of the Holders of at least 66-2/3% in
liquidation amount of the Preferred Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices.
All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving
such notice, and shall be delivered, telecopied or mailed by
registered or certified mail, as follows:
(a) if given to the Preferred Guarantee Trustee, at
the mailing address set forth below (or such other address as the
Preferred Guarantee Trustee may give notice of to the Holders and
the Guarantor):
Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Vice President- Corporate Trustee
Administration Department
(b) if given to the Guarantor, at the mailing address
set forth below (or such other address as the Guarantor may give
notice of to the Holders and the Preferred Guarantee Trustee):
Salomon Inc
Seven World Trade Center
New York, New York 10048
Attention:
(c) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All such notices shall be deemed to have been given
19
<PAGE>
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Preferred Securities Guarantee is solely for the
benefit of the Holders of the Preferred Securities and, subject
to Section 3.1(a), is not separately transferable from the
Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
SALOMON INC
By:_________________________
Name:
Title:
CHEMICAL BANK,
as Preferred Guarantee Trustee
By:_________________________
Name:
Title:
20
<PAGE>
CERTIFICATE OF DESIGNATIONS
[ ]% CUMULATIVE PREFERRED STOCK, SERIES F
OF
SALOMON INC
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Salomon Inc, a corporation organized and existing
under the General Corporation Law of the State of Delaware
(the "Company"), hereby certifies that the Board of
Directors of the Company (the "Board of Directors") and the
Preferred Stock Issuance Committee of the Board of
Directors, pursuant to authority conferred upon the Board of
Directors by the provisions of the Certificate of
Incorporation, as amended, of the Company and by Section 151
of the General Corporation Law of the State of Delaware, and
pursuant to authority conferred upon the Preferred Stock
Issuance Committee of the Board of Directors by Section
141(c) of the General Corporation law of the State of
Delaware, by Article IV, Section 4 of the By-Laws of the
Company and by the resolutions of the Board of Directors set
forth herein, have adopted the following resolutions
creating a series of preferred stock, without par value, of
the Company, designated as [ ]% Cumulative Preferred Stock,
Series F:
1. The Board of Directors on March 7, 1990,
adopted the following resolutions authorizing the issuance
and sale of up to 1,800,000 shares of preferred stock,
without par value, of the Company (defined therein as the
"Preferred Shares"), designating a Preferred Stock Issuance
Committee of the Board of Directors and authorizing such
committee to act on behalf of the Board of Directors in
connection with the issuance and sale of such preferred
stock:
"NOW, THEREFORE, BE IT RESOLVED, that the Company
is hereby authorized to obtain equity financing, which may
be domestic or foreign financing or a combination thereof,
through the issuance and sale of Preferred Shares; that . .
. [the Preferred Stock Issuance] Committee shall have all
the powers and authority of the Board of Directors in
<PAGE>
connection with the issuance of Preferred Shares except as
otherwise required by law . . .
FURTHER RESOLVED, that the Committee be and it
hereby is authorized to negotiate and determine . . . the
terms and provisions of each series of Preferred Shares to
be issued and sold (including, but not limited to, the
aggregate purchase price for Preferred Shares of such
series, regardless of amounts due and payable upon
redemption or liquidation of the Company, the designation of
such series of Preferred Shares, the number of shares
constituting such series, the dividend rate, whether
dividends are cumulative, the currency or currency unit in
which such series of Preferred Shares will be denominated or
payable, the redemption provisions, including limitations on
prepayment and prepayment penalties, the provisions for a
sinking fund, the liquidation provisions, convertibility
into shares of common stock, par value $1, of the Company
("Common Shares"), exchangeability for other equity or debt
securities, and priority in relation to all other equity
securities of the Company) . . ."
2. The Board of Directors on May 14, 1991, adopted
the following resolution:
"NOW, THEREFORE, BE IT RESOLVED, that in addition
to any voting rights provided in the Company's Certificate
of Incorporation, as it may be amended or restated from time
to time (the "Certificate of Incorporation"), for all series
of the Company's preferred stock, and any voting rights
provided by law, the holders of shares of each series of
preferred stock of the Company created by the Preferred
Stock Issuance Committee of the Board of Directors pursuant
to the authority granted to such committee in the
resolutions adopted by the Board of Directors on March 7,
1990 (each such series, the "Applicable Series") shall,
unless otherwise determined by resolution of the Board of
Directors, have the following voting rights:
(a) So long as any shares of the Applicable
Series shall be outstanding and unless the consent or
approval of a greater number of shares shall then be
required by law, without first obtaining the consent
or approval of the holders of at least two-thirds of the
number of then-outstanding shares of the Applicable
Series, and all other series of the Company's
preferred stock, without par value (collectively with the
Applicable Series, the "Preferred Stock"), voting as a
<PAGE>
single class, given in person or by proxy at a meeting
at which the holders of such shares shall be entitled
to vote separately as a class, the Company shall not:
(i) authorize shares of any class or series of stock
having any preference or priority as to dividends or
upon liquidation ("Senior Stock") over the Preferred
Stock; (ii) reclassify any shares of stock of the
Company into shares of Senior Stock; (iii) authorize
any security exchangeable for, convertible into, or
evidencing the right to purchase any shares of Senior
Stock; (iv) amend, alter or repeal the Certificate of
Incorporation to alter or change the preferences,
rights or powers of the Preferred Stock so as to affect
the Preferred Stock adversely; provided, however, that
if any such amendment, alteration or repeal would alter
or change the preferences, rights or powers of one or
more, but not all, of the series of the Preferred Stock
at the time outstanding, the consent or approval of the
holders of at least twothirds of the number of the
outstanding shares of each such series so affected,
similarly given, shall be required in lieu of (or if
such consent is required by law, in addition to) the
consent or approval of the holders of at least
two-thirds of the number of outstanding shares of
Preferred Stock as a class; or (v) effect the voluntary
liquidation, dissolution or winding up of the Company,
or the sale, lease or exchange of all or substantially
all of the assets, property or business of the Company,
or the merger or consolidation of the Company with or
into any other corporation (except a wholly owned
subsidiary of the Company); provided, however, that no
separate vote of the holders of the Preferred Stock as
a class shall be required in the case of a merger or
consolidation or a sale, exchange or conveyance of all
or substantially all of the assets, property or
business of the Company (such transactions being
hereinafter in this proviso referred to as a
"reorganization") if (A) the resulting, surviving or
acquiring corporation will have after such
reorganization no stock either authorized or
outstanding (except such stock of the Company as may
have been authorized or outstanding immediately
preceding such reorganization, or such stock of the
resulting, surviving or acquiring corporation as may be
issued in exchange therefor) ranking prior to, or on a
parity with, the Preferred Stock or the stock of the
resulting, surviving or acquiring corporation issued in
exchange therefor and (B) each holder of shares of
<PAGE>
Preferred Stock immediately preceding such
reorganization will receive in exchange therefor the
same number of shares of stock, with substantially the
same preferences, rights and powers, of the resulting,
surviving, or acquiring corporation.
So long as any shares of Preferred Stock shall be
outstanding and unless the consent or approval of a
greater number of shares shall then be required by
law, without first obtaining the consent or approval of
the holders of a majority of the number of such shares at
the time outstanding, given in person or by proxy at a
meeting at which the holders of such shares shall be
entitled to vote separately as a class, the Company
shall not amend the provisions of its Certificate of
Incorporation so as to increase the amount of the
authorized Preferred Stock or so as to authorize any
other stock ranking on a parity with the Preferred
Stock either as to payment of dividends or upon
liquidation.
(b) If on any date a total of six quarterly
dividends on the Applicable Series have fully accrued
but have not been paid in full, the holders of shares
of the Applicable Series, together with the holders of
all other then-outstanding shares of any series of the
Preferred Stock (or any other series or class of the
Company's preferred stock) as to which series or class
a total of six quarterly dividends have fully accrued
but have not been paid in full and which such series or
class shall be entitled to the rights described in this
paragraph (b) (collectively, "Defaulted Preferred
Stock"), shall have the right, voting together as a
single class, to elect two directors. Such right of the
holders of Defaulted Preferred Stock to vote for the
election of such two directors may be exercised at any
annual meeting or at any special meeting called for
such purpose as hereinafter provided or at any
adjournment thereof, or by the written consent,
delivered to the Secretary of the Company, of the
holders of a majority of all outstanding shares of
Defaulted Preferred Stock, until dividends in default
on the outstanding shares of Defaulted Preferred Stock
shall have been paid in full (or such dividends shall
have been declared and funds sufficient therefor set
apart for payment), at which time the term of office of
the two directors so elected shall terminate
automatically. So long as such right to vote continues
<PAGE>
(and unless such right has been exercised by written
consent of the holders of a majority of the outstanding
shares of Defaulted Preferred Stock as hereinabove
authorized), the Secretary of the Company may call, and
upon the written request of the holders of record of a
majority of the outstanding shares of Defaulted
Preferred Stock addressed to him at the principal
office of the Company shall call, a special meeting of
the holders of such shares for the election of such two
directors as provided herein. Such meeting shall be
held within 30 days after delivery of such request to
the Secretary, at the place and upon the notice
provided by law and in the By-laws for the holding of
meetings of stockholders. No such special meeting or
adjournment thereof shall be held on a date less than
30 days before an annual meeting of stockholders or any
special meeting in lieu thereof. If at any such annual
or special meeting or any adjournment thereof the
holders of a majority of the then outstanding shares of
Defaulted Preferred Stock entitled to vote in such
election shall be present or represented by proxy, or
if the holders of a majority of the outstanding shares
of Defaulted Preferred Stock shall have acted by
written consent in lieu of a meeting with respect
thereto, then the authorized number of directors shall
be increased by two, and the holders of the Defaulted
Preferred Stock shall be entitled to elect the two
additional directors. Directors so elected shall serve
until the next annual meeting or until their successors
shall be elected and shall qualify, unless the term of
office of the persons so elected as directors shall
have terminated under the circumstances set forth in
the second sentence of this paragraph (b). In case of
any vacancy occurring among the directors elected by
the holders of the Defaulted Preferred Stock as a
class, the remaining director who shall have been so
elected may appoint a successor to hold office for the
unexpired term of the directors whose places shall be
vacant. If both directors so elected by the holders of
Defaulted Preferred Stock as a class shall cease to
serve as directors before their terms shall expire, the
holders of the Defaulted Preferred Stock then
outstanding and entitled to vote for such directors
may, by written consent as hereinabove provided, or at
a special meeting of such holders called as provided
above, elect successors to hold office for the
unexpired terms of the directors whose places shall be
vacant.
<PAGE>
(c) Except as provided herein or in the
Certificate of Incorporation, or as required by law,
the holders of shares of the Applicable Series shall
have no voting rights and their consent shall not be
required for the taking of any corporate action."
3. The Board of Directors on April 22, 1996,
adopted the following resolution:
"NOW, THEREFORE, BE IT RESOLVED, that the Company
is hereby authorized to obtain financing ... through the
public or private offering, issuance and sale of units (the
"Units") consisting of (i) Preferred Securities (the "Trust-
Issued Preferred Securities") of a Delaware business trust
(the "Trust") and (ii) Purchase Contracts (the "Purchase
Contracts") requiring the purchase of Depositary Shares (the
"Depositary Shares") each representing a fractional interest
in a share of a series of Cumulative Preferred Stock (the
"Company Preferred Stock") of the Company, and ...
that . . . the Preferred Stock Issuance Committee
be and hereby is authorized to negotiate and determine the
form, terms and provisions of the Company Preferred Stock,
including, without limitation, the aggregate purchase price
for shares of the Company Preferred Stock, regardless of
amounts due and payable upon redemption or liquidation of
the Company, the designation of the Company Preferred Stock,
the number of shares constituting such series, the dividend
rate, whether dividends are cumulative, the currency or
currency unit in which the Company Preferred Stock will be
denominated or payable, the redemption provisions, including
limitations on prepayment and prepayment penalties, the
provisions for a sinking fund, the liquidation provisions,
convertibility into shares of Common Stock of the Company,
exchangeability for other equity or debt securities and
priority in relation to all other equity securities of the
Company . . ."
4. The Preferred Stock Issuance Committee of the
Board of Directors on [ ], 1996, adopted the following
resolution:
"RESOLVED, that a series of the class of
authorized Preferred Stock, without par value, of the
Company be hereby created, and that the designation and
amount thereof and the preferences and relative,
participating, optional and other special rights of the
<PAGE>
shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
SECTION 1. Designation and Amount. The shares of
such series shall be designated as the "[ ]% Cumulative
Preferred Stock, Series F" (the "Series F Preferred Stock")
and the number of shares constituting such series shall be
[ ], which number may be increased or decreased by the
Board of Directors or a committee so authorized by the Board
of Directors without a vote of stockholders; provided,
however, that such number may not be decreased below the
number of then currently outstanding shares of Series F
Preferred Stock.
SECTION 2. Dividend and Distributions. (a) The
holders of shares of Series F Preferred Stock, before any
dividends may be declared or paid to the holders of shares
of the Common Stock ot of any other capital stock of the
Company ranking junior to the Series F Preferred Stock as to
the payment of dividends, shall be entitled to receive, when
and as declared by the Board of Directors out of net profits
or net assets of the Company legally available for the
payment of dividends, cumulative cash dividends at the
annual rate of [ ]% of the liquidation preference per share
of Series F Preferred Stock (equivalent to $ per annum per
shares of Series F Preferred Stock), and no more, in equal
quarterly payments (rounded down to the nearest cent) on
[ ], [ ], [ ] and [ ] in each year (each a "Payment Date"),
commencing on the first Payment Date following the date of
issuance of the Series F Preferred Stock.
(b) Dividends payable pursuant to paragraph (a) of
this Section 2 shall begin to accrue and be cumulative from
the date of original issue of the Series F Preferred Stock.
The amount of dividends so payable for any period shorter
than a full quarterly dividend period shall be determined on
the basis of twelve 30-day months and a 360-day year.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series F Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The record date for the
determination of holders of shares of Series F Preferred
Stock entitled to receive payment of a dividend declared
thereon shall be the close of business on the fifteenth day
(whether or not a business day) immediately
<PAGE>
preceding the Payment Date or such other date, no more than
60 days prior to the date fixed for the payment thereof, as
may be determined by the Board of Directors or a duly
authorized committee thereof.
SECTION 3. Certain Restrictions. (a) Whenever
quarterly dividends payable on shares of Series F Preferred
Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends,
whether or not declared, on the outstanding shares of Series
F Preferred Stock shall have been paid in full or declared
and set apart for payment, the Company shall not: (i)
declare or pay dividends, or make any other distributions,
on any shares of Common Stock or other capital stock ranking
junior (either as to payment of dividends or distribution of
assets upon liquidation, dissolution or winding up) to the
Series F Preferred Stock ("Junior Stock"), other than
dividends or distributions payable in Junior Stock; (ii)
declare or pay dividends, or make any other distributions,
on any shares of capital stock ranking on a parity (either
as to payment of dividends or distribution of assets upon
liquidation, dissolution or winding up) with the Series F
Preferred Stock ("Parity Stock"), other than dividends or
distributions payable in Junior Stock, except dividends paid
ratably on the Series F Preferred Stock and all Parity Stock
on which dividends are payable or in arrears, in proportion
to the total amounts to which the holders of all such shares
are then entitled; (iii) redeem or purchase or otherwise
acquire for consideration any shares of Junior Stock;
provided, that the Company may at any time redeem, purchase
or otherwise acquire any shares of Junior Stock in exchange
for shares of Junior Stock; or (iv) redeem or purchase or
otherwise acquire for consideration any shares of Series F
Preferred Stock or Parity Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(b) The Company shall not permit any Subsidiary of
the Company to purchase or otherwise acquire for
consideration any shares of capital stock of the Company
unless the Company could, pursuant to paragraph (a) of this
<PAGE>
Section 3, purchase or otherwise acquire such shares at
such time and in such manner.
SECTION 4. Redemption. (a) The shares of Series F
Preferred Stock shall not be redeemed by the Company prior
to the later of [ ], 2001, and the date of issue of
the Series F Preferred Stock. The Company at its option, may
redeem its shares of Series F Preferred Stock, as a whole or
in part, at any time or from time to time on or after the
later of [ ], 2001, and the date of issue of the Series F
Preferred Stock at a price of $500 per share, plus an amount
per share equal to all accrued but unpaid dividends thereon,
whether or not declared, to the date fixed for redemption.
The Company's election to redeem shares of Series F
Preferred Stock shall be expressed by resolution of the
Board of Directors. Any such redemption shall be made upon
not less than 30 nor more than 60 days' notice prior to the
redemption date fixed by the Board of Directors and
specified therein to holders of record of the shares of
Series F Preferred Stock to be redeemed and given as
hereinafter provided.
(b) If less than all shares of Series F Preferred
Stock at the time outstanding are to be redeemed, the shares
to be redeemed shall be selected pro rata or by lot, in such
manner as may be prescribed by resolution of the Board of
Directors.
(c) Notice of any redemption of shares of Series F
Preferred Stock shall be given by publication in a newspaper
of general circulation in the Borough of Manhattan, The City
of New York. A similar notice shall be mailed by the
Company, or its agent, postage prepaid, not less than 30 nor
more than 60 days prior to such redemption date, addressed
to the respective holders of record of shares of Series F
Preferred Stock to be redeemed at their respective addresses
as the same shall appear on the stock transfer records of
the Company, but the mailing of such notice shall not be a
condition of such redemption. In order to facilitate the
redemption of shares of Series F Preferred Stock, the Board
of Directors may fix a record date for the determination of
shares of Series F Preferred Stock to be redeemed, not more
than 60 days nor less than 30 days prior to the date fixed
for such redemption.
(d) Notice having been given pursuant to paragraph
(c) of this Section 4, the Company shall provide the moneys
for the payment of the redemption price by
<PAGE>
depositing the amount thereof with a bank or trust company
doing business in the Borough of Manhattan, The City of New
York, and having a capital and surplus of at least
$10,000,000, provided that the notice of redemption shall
state the intention of the Company to deposit such amount on
a date prior to the date of redemption so specified in such
notice, all rights of the holders thereof as stockholders of
the Company, except the right to receive the redemption
price (but without interest), shall cease, and provided
further that all dividends on the Series F Preferred Stock
thereby called for redemption shall cease to accrue from and
after the date of redemption specified, unless the Company
shall fail to make such deposit as aforesaid. Any interest
allowed on moneys so deposited shall be paid to the Company.
Any moneys so deposited which shall remain unclaimed by the
holders of such Series F Preferred Stock at the end of six
years after the redemption date shall become the property
of, and be paid by such bank or trust company to, the
Company.
SECTION 5. Reacquired Shares. Any shares of
Series F Preferred Stock redeemed, purchased or otherwise
acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock,
without par value, of the Company and may be reissued as
part of another series of Preferred Stock, without par
value, of the Company, subject to the conditions or
restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
SECTION 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation, dissolution or winding up of the
Company, no distribution shall be made (i) to the holders of
shares of Junior Stock, unless, prior thereto, the holders
of shares of Series F Preferred Stock shall have received
$500 per share, plus an amount per share equal to all
accrued but unpaid dividends thereon, whether or not
declared, to the date of such payment or (ii) to the holders
of shares of Parity Stock, except distributions made ratably
on the Series F Preferred Stock and all such Parity Stock in
proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution
or winding up. After payment of the full amount of the
liquidating
<PAGE>
distribution to which holders of the Series F Preferred Stock
are entitled, such holders shall have no right or claim to
any of the remaining assets of the Company.
(b) Neither the consolidation, merger or other
business combination of the Company with or into any other
Person or Persons, nor the sale, lease, exchange or
conveyance of all or any part of the property, assets or
business of the Company, shall be deemed to be a
liquidation, dissolution or winding up of the Company for
purposes of this Section 6.
SECTION 7. Voting Rights. The holders of shares of
Series F Preferred Stock shall have the voting rights
provided for in the resolution adopted by the Board of
Directors on May 14, 1991.
SECTION 8. Definitions. For the purposes of the
Certificate of Designations of the Series F Preferred Stock
which embodies this resolution:
"Persons" shall mean any individual, firm,
corporation or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Subsidiary" of any Person means any corporation
or other entity of which a majority of the voting power of
the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.
SECTION 9. Rank. The Series F Preferred Stock
shall rank, with respect to the payment of dividends and the
distribution of assets, equally with all shares of the
Series A Cumulative Convertible Preferred Stock of the
Company, the 9.50% Cumulative Preferred Stock, Series C of
the Company, the 8.08% Cumulative Preferred Stock Series D
of the Company and the 8.40% Cumulative Preferred Stock
Series E of the Company and prior to all shares of the
Series B Junior Participating Preferred Stock of the
Company."
IN WITNESS WHEREOF, the Company has caused this
Certificate of Designations of [ ]% Cumulative Preferred
Stock, Series F to be duly executed by its Senior Vice
<PAGE>
President and attested to by its Secretary and has caused
its corporate seal to be affixed hereto, this day
of , 1996.
SALOMON INC
by
--------------------------
[Seal]
Attest:
- -----------------------
Secretary
<PAGE>
SALOMON INC
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
NUMBER SHARES
F_____ ________
% Cumulative % Cumulative
Preferred Stock, Preferred Stock,
Series F Series F
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP ________
THIS CERTIFIES THAT _________________________ IS THE OWNER OF _______________
FULLY-PAID AND NON-ASSESSABLE SHARES OF % CUMULATIVE PREFERRED STOCK, SERIES
F, OF NO PAR VALUE PER SHARE OF SALOMON INC transferable on the books of the
Corporation by the holder hereof in person, or by duly authorized attorney, upon
surrender of this certificate properly endorsed. This certificate and the shares
represented thereby are issued and shall be subject to all of the provisions of
the Certificate of Incorporation of the Corporation as now or hereafter amended
to all of which the holder hereof by acceptance hereby assents. This certificate
is not valid unless countersigned by the Transfer Agent and registered by the
Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated
/s/ Robert E. Denham
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
/s/ Arnold S. Olshin
SECRETARY
[SEAL]
COUNTERSIGNED AND REGISTERED:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
TRANSFER AGENT AND REGISTRAR
BY ____________________________________
AUTHORIZED OFFICER
<PAGE>
SALOMON INC
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS, THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE
CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT -- ______________ Custodian _______________ under Uniform
(Cust) (Minor)
Gifts to Minors Act _____________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, _____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER _______________________________________________________
TAXPAYER IDENTIFYING (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
NUMBER OF ASSIGNEE ZIP CODE, OF ASSIGNEE
____________________ _______________________________________________________
_____________ shares of the capital stock represented by the within Certificate,
and do hereby irrevocably constitute and appoint _____________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated _________________
______________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE
IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
[Draft--June 12, 1996]
DEPOSIT AGREEMENT dated as of , 1996,
among SALOMON INC, a corporation duly organized and existing
under the laws of the State of Delaware, FIRST CHICAGO TRUST
COMPANY OF NEW YORK, a trust company existing under the laws
of the State of New York and the holders from time to time
of the Depositary Receipts described herein.
WHEREAS it is desired to provide, as hereinafter
set forth in this Deposit Agreement, for the deposit of
shares of % Cumulative Preferred Stock, Series F, without
par value, of SALOMON INC with the Depositary for the
purposes set forth in this Deposit Agreement and for the
issuance hereunder of Depositary Receipts (as hereinafter
defined) evidencing Depositary Shares in respect of the
Stock (as hereinafter defined) so deposited;
NOW, THEREFORE, in consideration of the premises,
the parties hereto agree as follows:
ARTICLE I
Definitions
The following definitions shall for all purposes,
unless otherwise indicated, apply to the respective terms
used in this Deposit Agreement and the Depositary Receipts:
"Certificate of Designations" shall mean the
Certificate of Designations filed with the Secretary of
State of Delaware establishing the Stock as a series of
preferred stock of the Company.
"Certificate of Incorporation" shall mean the
Certificate of Incorporation, as amended from time to time,
of the Company.
"Company" shall mean Salomon Inc, a Delaware
corporation having its principal office at Seven World Trade
Center, New York, New York 10048, and its successors.
"Deposit Agreement" shall mean this Deposit
Agreement, as amended or supplemented from time to time.
"Depositary" shall mean FIRST CHICAGO TRUST
COMPANY OF NEW YORK, a trust company existing under the laws
of the State of New York, and any successor as Depositary
hereunder.
<PAGE>
"Depositary Receipt" shall mean one of the
depositary receipts issued hereunder, whether in definitive
or temporary form.
"Depositary Shares" shall mean Depositary Shares,
each representing a one-twentieth interest in a share of
Stock and evidenced by a Depositary Receipt.
"Depositary's Agent" shall mean an agent appointed
by the Depositary pursuant to Section 7.06.
"Depositary's Office" shall mean the principal
office of the Depositary in New York City, at which at any
particular time its depositary receipt business shall be
administered.
"record holder" as applied with respect to a
Depositary Receipt shall mean the person in whose name a
Depositary Receipt is registered on the books of the
Depositary maintained for such purpose.
"Registrar" shall mean any bank or trust company
which shall be appointed to register ownership and transfers
of Depositary Receipts as herein provided.
"Stock" shall mean shares of the Company's %
Cumulative Preferred Stock, Series F, without par value.
ARTICLE II
Form of Depositary Receipts, Deposit of Stock, Execution
and Delivery, Transfer, Surrender and Redemption of
Depositary Receipts
SECTION 2.01. Form and Transfer of Depositary
Receipts. Definitive Depositary Receipts shall be engraved
or printed or lithographed on steel-engraved borders and
shall be substantially in the form set forth in Exhibit A
annexed to this Deposit Agreement, with appropriate
insertions, modifications and omissions, as hereinafter
provided. Pending the preparation of definitive Depositary
Receipts, the Depositary, upon the written order of the
Company delivered in compliance with Section 2.02, shall
execute and deliver temporary Depositary Receipts which
shall be printed, lithographed, typewritten, mimeographed or
otherwise substantially of the tenor of the definitive
Depositary Receipts in lieu of which they are issued and
<PAGE>
with such appropriate insertions, omissions, substitutions
and other variations as the persons executing such
Depositary Receipts may determine, as evidenced by their
execution of such Depositary Receipts. If temporary
Depositary Receipts are issued, the Company and the
Depositary will cause definitive Depositary Receipts to be
prepared without unreasonable delay. After the preparation
of definitive Depositary Receipts, the temporary Depositary
Receipts shall be exchangeable for definitive Depositary
Receipts upon surrender of the temporary Depositary Receipts
at the Depositary's office, or such other office as the
Depositary may designate, without charge to the holder. Upon
surrender for cancelation of any one or more temporary
Depositary Receipts, the Depositary shall execute and
deliver in exchange therefor definitive Depositary Receipts
representing the same number of Depositary Shares as
represented by the surrendered temporary Depositary Receipt
or Receipts. Such exchange shall be made at the Company's
expense and without any charge therefor. Until so exchanged,
the temporary Depositary Receipts shall in all respects be
entitled to the same benefits under this Deposit Agreement,
and with respect to the Stock, as definitive Depositary
Receipts.
Depositary Receipts shall be executed by the
Depositary by the manual signature of a duly authorized
officer of the Depositary; provided, that such signature may
be a facsimile if a Registrar for the Depositary Receipts
(other than the Depositary) shall have been appointed and
such Depositary Receipts are countersigned by manual
signature of a duly authorized officer of the Registrar. No
Depositary Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any
purpose unless it shall have been executed manually by a
duly authorized officer of the Depositary or, if a Registrar
for the Depositary Receipts (other than the Depositary)
shall have been appointed, by facsimile signature of a duly
authorized officer of the Depositary and countersigned
manually by a duly authorized officer of such Registrar. The
Depositary shall record on its books each Depositary Receipt
so signed and delivered as hereinafter provided.
Depositary Receipts shall be in denominations of
any number of whole Depositary Shares.
Depositary Receipts may be endorsed with or have
incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this Deposit
<PAGE>
Agreement as may be required by the Depositary or required
to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any
securities exchange upon which the Stock, the Depositary
Shares or the Depositary Receipts may be listed or to
conform with any usage with respect thereto, or to indicate
any special limitations or restrictions to which any
particular Depositary Receipts are subject.
Title to Depositary Shares evidenced by a
Depositary Receipt which is properly endorsed, or
accompanied by a properly executed instrument of transfer,
shall be transferable by delivery with the same effect as in
the case of a negotiable instrument; provided, however, that
until transfer of a Depositary Receipt shall be registered
on the books of the Depositary as provided in Section 2.04,
the Depositary may, notwithstanding any notice to the
contrary, treat the record holder thereof at such time as
the absolute owner thereof for the purpose of determining
the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit
Agreement and for all other purposes.
SECTION 2.02. Deposit of Stock; Execution and
Delivery of Depositary Receipts in Respect Thereof. Subject
to the terms and conditions of this Deposit Agreement, the
Company may from time to time deposit shares of Stock under
this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Stock to be deposited,
properly endorsed or accompanied, if required by the
Depositary, by a duly executed instrument of transfer or
endorsement, in form satisfactory to the Depositary,
together with all such certifications as may be required by
the Depositary in accordance with the provisions of this
Deposit Agreement, and together with a written order
directing the Depositary to execute and deliver to, or upon
the written order of, the person or persons stated in such
order a Depositary Receipt or Receipts for the number of
Depositary Shares representing interests in such deposited
Stock.
Deposited Stock shall be held by the Depositary at
the Depositary's Office or at such other place or places as
the Depositary shall determine.
Upon receipt by the Depositary of a certificate or
certificates for Stock deposited in accordance with the
provisions of this Section, together with the other
<PAGE>
documents required as above specified, and upon recordation
of the Stock on the books of the Company in the name of the
Depositary or its nominee, the Depositary, subject to the
terms and conditions of this Deposit Agreement, shall
execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the
Depositary referred to in the first paragraph of this
Section, a Depositary Receipt for the number of Depositary
Shares relating to the Stock so deposited and registered in
such name or names as may be requested by such person or
persons. The Depositary shall execute and deliver such
Depositary Receipt at the Depositary's Office or such other
offices, if any, as the Depositary may designate. Delivery
at other offices shall be at the risk and expense of the
person requesting such delivery. However, in each case, such
delivery will be made only upon payment to the Depositary of
all taxes and governmental charges and fees payable by the
depositor, as provided in Section 5.07. The Company shall
deliver to the Despositary from time to time such quantities
of Depositary Receipts as the Depositary may request to
enable the Depositary to perform its obligations under this
Deposit Agreement.
SECTION 2.03. Redemption of Stock. Whenever the
Company shall elect to redeem shares of Stock in accordance
with the provisions of the Certificate of Incorporation and
the Certificate of Designations, it shall (unless otherwise
agreed in writing with the Depositary) give the Depositary
not less than 30 nor more than 60 days' notice of the date
of such proposed redemption of Stock. On the date of such
redemption, provided that the Company shall then have paid
in full to the Depositary the redemption price of the Stock
to be redeemed, plus any accrued and unpaid dividends
thereon, the Depositary shall redeem the number of
Depositary Shares representing such Stock. The Depositary
shall mail notice of such redemption and the proposed
simultaneous redemption of the number of Depositary Shares
representing the Stock to be redeemed, first-class postage
prepaid, not less than 20 and not more than 50 days prior to
the date fixed for redemption of such Stock and Depositary
Shares (the "Redemption Date") to the record holders of the
Depositary Receipts evidencing the Depositary Shares to be
so redeemed, at the addresses of such holders as they appear
on the records of the Depositary; but neither failure to
mail any such notice to one or more such holders nor any
defect in any notice to one or more such holders shall
affect the sufficiency of the proceedings for redemptions to
the other holders. Each such notice shall state: (i) the
<PAGE>
Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by
any such holder are to be redeemed, the number of such
Depositary Shares held by such holder to be so redeemed;
(iii) the redemption price of $25.00 per Depositary Share
plus accrued but unpaid dividends thereon to the Redemption
Date; (iv) the place or places where Depositary Receipts
evidencing Depositary Shares are to be surrendered for
payment of the redemption price; and (v) that dividends in
respect of the Stock underlying the Depositary Shares to be
redeemed will cease to accumulate at the close of business
on such Redemption Date. In case less than all the
outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be so redeemed shall be selected by lot
or pro rata as may be determined by the Depositary to be
equitable.
Notice having been mailed by the Depositary as
aforesaid, from and after the Redemption Date (unless the
Company shall have failed to redeem the shares of Stock to
be redeemed by it as set forth in the Company's notice
provided for in the preceding paragraph) all dividends in
respect of the shares of Stock so called for redemption
shall cease to accumulate, the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be
outstanding, all rights of the holders of Depositary
Receipts evidencing such Depositary Shares (except the right
to receive the redemption price) shall, to the extent of
such Depositary Shares, cease and terminate and, upon
surrender in accordance with such notice of the Depositary
Receipts evidencing any such Depositary Shares (properly
endorsed or assigned for transfer, if the Depositary shall
so require), such Depositary Shares shall be redeemed by the
Depositary at a redemption price per Depositary Share equal
to one-twentieth of the redemption price per share paid in
respect of the shares of Stock plus all money and other
property, if any, represented by such Depositary Shares,
including all amounts paid by the Company in respect of
dividends which on the Redemption Date have accumulated on
the shares of Stock to be so redeemed and have not
theretofore been paid.
If less than all the Depositary Shares evidenced
by a Depositary Receipt are called for redemption, the
Depositary will deliver to the holder of such Depositary
Receipt upon its surrender to the Depositary, together with
the redemption payment, a new Depositary Receipt evidencing
<PAGE>
the Depositary Shares evidenced by such prior Depositary
Receipt and not called for redemption.
SECTION 2.04. Registration of Transfer of
Depositary Receipts. Subject to the terms and conditions of
this Deposit Agreement, the Depositary shall register on its
books from time to time transfers of Depositary Receipts
upon any surrender thereof by the holder in person or by
duly authorized attorney, properly endorsed or accompanied
by a properly executed instrument of transfer. Thereupon the
Depositary shall execute a new Depositary Receipt or
Receipts evidencing the same aggregate number of Depositary
Shares as those evidenced by the Depositary Receipt or
Receipts surrendered and deliver such new Depositary Receipt
or Receipts to or upon the order of the person entitled
thereto.
SECTION 2.05. Split-ups and Combinations of
Depositary Receipts; Surrender of Depositary Receipts and
Withdrawal of Stock. Upon surrender of a Depositary Receipt
or Receipts at the Depositary's Office or at such other
offices as it may designate for the purpose of effecting a
split-up or combination of such Depositary Receipt or
Receipts, and subject to the terms and conditions of this
Deposit Agreement, the Depositary shall execute and deliver
a new Depositary Receipt or Receipts in the authorized
denomination or denominations requested, evidencing the
aggregate number of Depositary Shares evidenced by the
Depositary Receipt or Receipts surrendered; provided,
however, the Depositary shall not issue any receipts
evidencing a fractional depositary share.
Any holder of a Depositary Receipt or Receipts
representing any number of whole shares of Stock may
withdraw the Stock and all money and other property, if any,
represented thereby by surrendering such Depositary Receipt
or Receipts at the Depositary's Office or at such other
offices as the Depositary may designate for such
withdrawals. Thereafter, without unreasonable delay, the
Depositary shall deliver to such holder, or to the person or
persons designated by such holder as hereinafter provided,
the number of whole shares of Stock and all money and other
property, if any, represented by the Depositary Receipt or
Receipts so surrendered for withdrawal, but holders of such
whole shares of Stock will not thereafter be entitled to
deposit such Stock hereunder or to receive Depositary Shares
therefor. If a Depositary Receipt delivered by the holder to
the Depositary in connection with such withdrawal shall
<PAGE>
evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole
shares of Stock to be so withdrawn, the Depositary shall at
the same time, in addition to such number of whole shares of
Stock and such money and other property, if any, to be so
withdrawn, deliver to such holder, or (subject to Section
2.04) upon his order, a new Depositary Receipt evidencing
such excess number of Depositary Shares. Delivery of the
Stock and the money and other property being withdrawn may
be made by the delivery of such certificates, documents of
title and other instruments as the Depositary may deem
appropriate, properly endorsed or accompanied by proper
instruments of transfer.
If the Stock and the money and other property
being withdrawn are to be delivered to a person or persons
other than the record holder of the Depositary Receipt or
Receipts being surrendered for withdrawal of Stock, such
holder shall execute and deliver to the Depositary a written
order so directing the Depositary and the Depositary may
require that the Depositary Receipt or Receipts surrendered
by such holder for withdrawal of such shares of Stock be
properly endorsed in blank or accompanied by a properly
executed instrument of transfer in blank.
Delivery of the Stock and the money and other
property, if any, represented by Depositary Receipts
surrendered for withdrawal shall be made by the Depositary
at the Depositary's Office, except that, at the request,
risk and expense of the holder surrendering such Depositary
Receipt or Receipts and for the account of the holder
thereof, such delivery may be made at such other place as
may be designated by such holder.
SECTION 2.06. Limitations on Execution and
Delivery, Transfer, Surrender and Exchange of Depositary
Receipts. As a condition precedent to the execution and
delivery, registration of transfer, split-up, combination,
surrender or exchange of any Depositary Receipt, the
Depositary, any of the Depositary's Agents or the Company
may require payment to it of a sum sufficient for the
payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of
any charges or expenses payable by the holder of a
Depositary Receipt pursuant to Section 5.07, may require the
production of evidence satisfactory to it as to the identity
and genuineness of any signature and may also require
compliance with such regulations, if any, as the Depositary
<PAGE>
or the Company may establish consistent with the provisions
of this Deposit Agreement.
The deposit of Stock may be refused, the delivery
of Depositary Receipts against Stock may be suspended, the
registration of transfer of Depositary Receipts may be
refused and the registration of transfer, surrender or
exchange of outstanding Depositary Receipts may be suspended
(i) during any period when the register of stockholders of
the Company is closed or (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time
to time because of any requirement of law or of any
government or governmental body or commission or under any
provision of this Deposit Agreement.
SECTION 2.07. Lost Depositary Receipts. etc. In
case any Depositary Receipt shall be mutilated, destroyed,
lost or stolen, the Depositary in its discretion may execute
and deliver a Depositary Receipt of like form and tenor in
exchange and substitution for such mutilated Depositary
Receipt, or in lieu of and in substitution for such
destroyed, lost or stolen Depositary Receipt, upon (i) the
filing by the holder thereof with the Depositary of evidence
satisfactory to the Depositary of such destruction or loss
or theft of such Depositary Receipt, of the authenticity
thereof and of his or her ownership thereof and (ii) the
furnishing of the Depositary with reasonable indemnification
satisfactory to it.
SECTION 2.08. Cancelation and Destruction of
Surrendered Depositary Receipts. All Depositary Receipts
surrendered to the Depositary or any Depositary's Agent
shall be canceled by the Depositary.
SECTION 2.09. Withdrawal of Stock. Upon surrender
of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have
previously been called for redemption), the owner of the
Depositary Shares evidenced thereby shall be entitled to
delivery of whole shares of Stock and all money and other
property, if any, represented by such Depositary Shares.
Partial shares of Stock shall not be issued. If the
Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of
Stock to be withdrawn, the Depositary shall deliver to such
holder at the same time a new Depositary Receipt evidencing
<PAGE>
such excess number of Depositary Shares. Holders of shares
of Stock thus withdrawn shall not thereafter be entitled to
deposit such shares under the Deposit Agreement or to
receive Depositary Receipts evidencing Depositary Shares
therefor.
ARTICLE III
Certain Obligations of the Holders
of Depositary Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and
Other Information. Any holder of a Depositary Receipt may be
required from time to time to file such proof of residence,
or other matters or other information, to execute such
certificates and to make such representations and warranties
as the Depositary or the Company may reasonably deem
necessary or proper. The Depositary or the Company may
withhold the delivery, or delay the registration of
transfer, redemption or exchange, of any Depositary Receipt
or the withdrawal of the Stock represented by the Depositary
Shares evidenced by any Depositary Receipt or the
distribution of any dividend or other distribution or the
sale of any rights or of the proceeds thereof until such
proof or other information is filed or such certificates are
executed or such representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other
Governmental Charges. Holders of Depositary Receipts shall
be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.07.
Registration of transfer of any Depositary Receipt or any
withdrawal of Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such
Depositary Receipt may be refused until any such payment due
is made, and any dividends, interest payments or other
distributions may be withheld or all or any part of the
Stock or other property represented by the Depositary Shares
evidenced by such Depositary Receipt and not theretofore
sold may be sold for the account of the holder thereof
(after attempting by reasonable means to notify such holder
prior to such sale), and such dividends, interest payments
or other distributions or the proceeds of any such sale may
be applied to any payment of such charges or expenses, the
holder of such Depositary Receipt remaining liable for any
deficiency.
<PAGE>
SECTION 3.03. Warranty as to Stock. The Company
hereby represents and warrants that the Stock, when issued,
will be validly issued, fully paid and nonassessable. Such
representation and warranty shall survive the deposit of the
Stock and the issuance of Depositary Receipts.
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions. Whenever the
Depositary shall receive any cash dividend or other cash
distribution on Stock, the Depositary shall, subject to
Sections 3.01 and 3.02, distribute to record holders of
Depositary Receipts on the record date fixed pursuant to
Section 4.04 such amounts of such dividend or distribution
as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the
Depositary Receipts held by such holders; provided, however,
that in case the Company or the Depositary shall be required
to withhold and shall withhold from any cash dividend or
other cash distribution in respect of the Stock an amount on
account of taxes, or as otherwise required by law,
regulation, or court order, the amount made available for
distribution or distributed in respect of Depositary Shares
shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case
may be, to each holder of Depositary Shares, with respect to
the aggregate number of Depositary Shares held by such
holder, only such amount, however, as can be distributed
without distributing to such holder a fraction of one cent,
and any balance not so distributable shall be held by the
Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum
received by the Depositary for distribution to record
holders of Depositary Receipts then outstanding.
SECTION 4.02. Distributions Other than Cash.
Whenever the Depositary shall receive any distribution other
than cash on Stock, the Depositary shall, subject to
Sections 3.01 and 3.02, distribute to record holders of
Depositary Receipts on the record date fixed pursuant to
Section 4.04 such amounts of the securities or property
received by it as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares
evidenced by the Depositary Receipts held by such holders,
in any manner that the Depositary may deem equitable and
<PAGE>
practicable for accomplishing such distribution. If in the
opinion of the Depositary such distribution cannot be made
proportionately among such record holders, or if, for any
other reason (including any requirement that the Company or
the Depositary withhold an amount on account of taxes) or as
otherwise required by law, regulation or court order, the
Depositary deems, after consultation with the Company, such
distribution not to be feasible, the Depositary may, with
the approval of the Company, adopt such method as it deems
equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale)
of the securities or property thus received, or any part
thereof, at such place or places and upon such terms as it
may deem proper. The net proceeds of any such sale shall,
subject to Sections 3.01 and 3.02, be distributed or made
available for distribution, as the case may be, by the
Depositary to record holders of Depositary Receipts as
provided by Section 4.01 in the case of a distribution
received in cash.
SECTION 4.03. Subscription Rights, Preferences or
Privileges. If the Company shall at any time offer or cause
to be offered to the persons in whose names Stock is
recorded on the books of the Company any rights, preferences
or privileges to subscribe for or to purchase any securities
or any rights, preferences or privileges of any other
nature, such rights, preferences or privileges shall in each
such instance be made available by the Depositary to the
record holders of Depositary Receipts in such manner as the
Depositary may determine, either by the issue to such record
holders of warrants representing such rights, preferences or
privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of the
Company; provided, however, that (i) if at the time of issue
or offer of any such rights, preferences or privileges the
Depositary determines that it is not lawful or (after
consultation with the Company) not feasible to make such
rights, preferences or privileges available to holders of
Depositary Receipts by the issue of warrants or otherwise,
or (ii) if and to the extent so instructed by holders of
Depositary Receipts who do not desire to exercise such
rights, preferences or privileges, then the Depositary, in
its discretion (with the approval of the Company, in any
case where the Depositary has determined that it is not
feasible to make such rights, preferences or privileges
available), may, if applicable laws or the terms of such
rights, preferences or privileges permit such transfer, sell
such rights, preferences or privileges at public or private
<PAGE>
sale, at such place or places and upon such terms as it may
deem proper. The net proceeds of any such sales shall be
distributed by the Depositary to the record holders of
Depositary Receipts entitled thereto as provided by Section
4.01 in the case of a distribution received in cash.
If registration under the Securities Act of 1933,
as amended, of the securities to which any rights,
preferences or privileges relate is required in order for
holders of Depositary Receipts to be offered or sold the
securities to which such rights, preferences or privileges
relate, the Company will file promptly a registration
statement pursuant to such Act with respect to such rights,
preferences or privileges and securities and use its best
efforts and take all steps available to it to cause such
registration statement to become effective sufficiently in
advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights,
preferences or privileges. In no event shall the Depositary
make available to the holders of Depositary Receipts any
right, preference or privilege to subscribe for or to
purchase any securities unless and until it receives notice
from the Company that such a registration statement shall
have become effective or the offering and sale of such
securities to such holders are exempt from registration
under the provisions of such Act.
If any other action under the laws of any
jurisdiction or any governmental or administrative
authorization, consent or permit is required in order for
such rights, preferences or privileges to be made available
to holders of Depositary Receipts, the Company will use its
best efforts to take such action or obtain such
authorization, consent or permit sufficiently in advance of
the expiration of such rights, preferences or privileges to
enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.04. Notice of Dividends, etc.; Fixing of
Record Date for Holders of Depositary Receipts. Whenever any
cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made,
or if rights, preferences or privileges shall at any time be
offered, with respect to Stock, or whenever the Depositary
shall receive notice of (a) any meeting at which holders of
Stock are entitled to vote or of which holders of Stock are
entitled to notice or (b) any election on the part of the
Company to redeem any Shares of Stock, the Depositary shall
<PAGE>
in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with
respect to the Stock) for the determination of the holders
of Depositary Receipts who shall be entitled hereunder to
receive a distribution in respect of such dividend,
distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or to give instructions for
the exercise of voting rights at any such meeting or to
receive notice of such meeting or redemption of Stock.
SECTION 4.05. Voting Rights. Upon receipt of
notice of any meeting at which the holders of Stock are
entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of
Depositary Receipts a notice which shall contain (i) such
information as is contained in such notice of meeting and
(ii) a statement that the holders may, subject to any
applicable restrictions, instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of
Stock underlying their respective Depositary Shares
(including an express indication that instructions may be
given to the Depositary to give a discretionary proxy to a
person designated by the Company) and a brief statement as
to the manner in which such instructions may be given. Upon
the written request of the holders of Depositary Receipts on
such record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum
number of whole shares of Stock underlying the Depositary
Shares evidenced by all Depositary Receipts as to which any
particular voting instructions are received. The Company
hereby agrees to take all action which may be deemed
necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be
voted. In the absence of specific instructions from the
holder of a Depositary Receipt, the Depositary will abstain
from voting (but, at its discretion, not from appearing at
any meeting with respect to such Stock unless directed to
the contrary by the holders of all the Depositary Receipts)
to the extent of the Stock underlying the Depositary Shares
evidenced by such Depositary Receipt.
SECTION 4.06. Changes Affecting Deposited
Securities and Reclassifications, Recapitalizations, etc.
Upon any change in par or stated value, split-up,
combination or any other reclassification of the Stock, or
upon any recapitalization, reorganization, merger,
amalgamation or consolidation or sale of all or
<PAGE>
substantially all the Company's assets affecting the Company
or to which it is a party, the Depositary may in its
discretion with the approval of, and shall upon the
instructions of, the Company, and (in either case) in such
manner as the Depositary may deem equitable, (i) make such
adjustments in (a) the fraction of an interest in one share
of Stock underlying one Depositary Share and (b) the ratio
of the redemption price per Depositary Share to the
redemption price of a share of Stock, in each case as may be
necessary fully to reflect the effects of such change in par
or stated value, split-up, combination or other
reclassification of Stock, or of such recapitalization,
reorganization, merger, amalgamation or consolidation or
sale and (ii) treat any securities which shall be received
by the Depositary in exchange for or upon conversion of or
in respect of the Stock as new deposited securities so
received in exchange for or upon conversion or in respect of
such Stock. In any such case the Depositary may in its
discretion, with the approval of the Company, execute and
deliver additional Depositary Receipts, or may call for the
surrender of all outstanding Depositary Receipts to be
exchanged for new Depositary Receipts specifically
describing such new deposited securities.
Anything to the contrary herein notwithstanding,
holders of Depositary Receipts shall have the right from and
after the effective date of any such change in par or stated
value, split-up, combination or other reclassification of
Stock or any such recapitalization, reorganization, merger,
amalgamation or consolidation to surrender such Depositary
Receipts to the Depositary with instructions to convert,
exchange or surrender the shares of Stock attributable
thereto into or for, as the case may be, the kind and amount
of shares of stock and other securities and property and
cash into which the Stock represented by such Depositary
Receipts was converted or for which such Stock was exchanged
or surrendered after giving effect to such transaction.
SECTION 4.07. Inspection of Reports. The
Depositary shall make available for inspection by holders of
Depositary Receipts at the Depositary's Office, and at such
other places as it may from time to time deem advisable, any
reports and communications received from the Company which
are received by the Depositary as the holder of Stock.
SECTION 4.08. List of Depositary Receipt Holders.
Promptly upon request from time to time by the Company, the
Depositary shall furnish to it a list, as of a recent date,
<PAGE>
of the names, addresses and holdings of Stock of all persons
in whose names Depositary Receipts are registered on the
books of the Depositary or Registrar, as the case may be.
ARTICLE V
The Depositary, the Depositary's Agents,
the Registrar and the Company
SECTION 5.01. Maintenance of Offices, Agencies and
Transfer Books by the Depositary; Registrar. Upon execution
of this Deposit Agreement, the Depositary shall maintain, at
the Depositary's Office, facilities for the execution and
delivery, registration and registration of transfer,
surrender and exchange of Depositary Receipts, and at the
offices of the Depositary's Agents, if any, facilities for
the delivery, registration of transfer, surrender and
exchange of Depositary Receipts, all in accordance with the
provisions of this Deposit Agreement.
The Depositary shall keep books at the
Depositary's Office for the registration and registration of
transfer of Depositary Receipts, which books at all
reasonable times shall be open for inspection by the record
holders of Depositary Receipts; provided, that any such
holder requesting to exercise such right shall certify to
the Depositary that such inspection shall be for a proper
purpose reasonably related to such person's interest as an
owner of Depositary Shares evidenced by the Depositary
Receipts.
The Depositary may close such books, at any time
or from time to time, when deemed expedient by it in
connection with the performance of its duties hereunder.
If the Depositary Receipts or the Depositary
Shares evidenced thereby or the Stock underlying such
Depositary Shares shall be listed on the New York Stock
Exchange, the Depositary may, with the approval of the
Company, appoint a Registrar for registration of such
Depositary Receipts or Depositary Shares in accordance with
any requirements of such Exchange. Such Registrar (which may
be the Depositary if so permitted by the requirements of
such Exchange) may be removed and a substitute Registrar
appointed by the Depositary upon the request or with the
approval of the Company. If the Depositary Receipts, such
Depositary Shares or such Stock are listed on one or more
<PAGE>
other stock exchanges, the Depositary will, at the request
of the Company, arrange such facilities for the delivery,
registration, registration of transfer, surrender and
exchange of such Depositary Receipts, such Depositary Shares
or such Stock as may be required by law or applicable stock
exchange regulation.
SECTION 5.02. Prevention of or Delay in
Performance by the Depositary, the Depositary Agents, the
Registrar or the Company. Neither the Depositary nor any
Depositary's Agent nor any Registrar nor the Company shall
incur any liability to any holder of any Depositary Receipt
if by reason of any provision of any present or future law,
or regulation thereunder, of the United States of America or
of any other governmental authority or, in the case of the
Depositary, the Depositary's Agent or the Registrar, by
reason of any provision, present or future, of the
Certificate of Incorporation (including the Certificate of
Designations) or by reason of any act of God or war or other
circumstance beyond the control of the relevant party, the
Depositary, the Depositary's Agent, the Registrar or the
Company shall be prevented or forbidden from doing or
performing any act or thing which the terms of this Deposit
Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent, any Registrar or the
Company incur any liability to any holder of a Depositary
Receipt (i) by reason of any nonperformance or delay, caused
as aforesaid, in the performance of any act or thing which
the terms of this Deposit Agreement provide shall or may be
done or performed, or (ii) by reason of any exercise of, or
failure to exercise, any discretion provided for in this
Deposit Agreement except, in case of any such exercise or
failure to exercise discretion not caused as aforesaid, if
caused by the negligence or willful misconduct of the party
charged with such exercise or failure to exercise.
SECTION 5.03. Obligations of the Depositary, the
Depositary's Agents, the Registrar and the Company. Neither
the Depositary nor any Depositary's Agent nor any Registrar
nor the Company assumes any obligation or shall be subject
to any liability under this Deposit Agreement to holders of
Depositary Receipts other than for its negligence or willful
misconduct.
Neither the Depositary nor any Depositary's Agent
nor any Registrar nor the Company shall be under any
obligation to appear in, prosecute or defend any action,
suit or other proceeding in respect of the Stock, the
<PAGE>
Depositary Shares or the Depositary Receipts which in its
opinion may involve it in expense or liability unless
indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent
nor any Registrar nor the Company shall be liable for any
action or any failure to act by it in reliance upon the
written advice of legal counsel or accountants, or
information from any person presenting Stock for deposit,
any holder of a Depositary Receipt or any other person
believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any
Registrar and the Company may each rely and shall each be
protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and
to have been signed or presented by the proper party or
parties.
The Depositary shall not be responsible for any
failure to carry out any instruction to vote any of the
shares of Stock or for the manner or effect of any such
vote, as long as any such action or inaction is in good
faith. The Depositary undertakes, and any Registrar shall be
required to undertake, to perform such duties and only such
duties as are specifically set forth in this Deposit
Agreement, and no implied covenants or obligations shall be
read into this Deposit Agreement against the Depositary or
any Registrar. The Depositary will indemnify the Company
against any liability which may arise out of acts performed
or omitted by the Depositary or its agents due to its or
their negligence or bad faith. The Depositary, the
Depositary's Agents and any Registrar may own and deal in
any class of securities of the Company or its affiliates and
in Depositary Receipts. The Depositary may also act as
transfer agent or registrar of any of the securities of the
Company and its affiliates.
It is intended that neither the Depositary nor any
Depositary's Agent shall be deemed to be an "issuer" of the
securities under the federal securities laws or applicable
state securities laws, it being expressly understood and
agreed that the Depositary and any Depositary's Agent are
acting only in a ministerial capacity as Depositary for the
Stock; provided, however, that the Depositary agrees to
comply with all information reporting and withholding
requirements applicable to it under law or this Deposit
Agreement in its capacity as Depositary.
<PAGE>
Neither the Depositary (or its officers,
directors, employees or agents) nor any Depositary's Agent
makes any representation or has any responsibility as to the
validity of the Registration Statement pursuant to which the
Depositary Shares are registered under the Securities Act,
the Stock, the Depositary Shares, the Depositary Receipts
(except to counter signature thereon) or any instruments
referred to therein or herein, or as to the correctness of
any statement made therein or herein; provided, however that
the Depositary is responsible for its representations in
this Deposit Agreement.
The Depositary assumes no responsibility for the
correctness of the description that appears in the
Depositary Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit
Agreement. Notwithstanding any other provision herein or in
the Depositary Receipts, the Depositary makes no warranties
or representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the
Depositary hereunder or of the Depositary shares, as to the
validity or sufficiency of the Depositary Receipts, as to
the validity or sufficiency of this Deposit Agreement, as to
the value of the Depositary Shares or as to any right, title
or interest of the record holders of Depositary Receipts in
and as to the Depositary Shares. The Depositary shall not be
accountable for the use or application by the Company of the
Depositary Shares or the Depositary Receipts or the proceeds
thereof.
SECTION 5.04. Resignation and Removal of the
Depositary; Appointment of Successor Depositary. The
Depositary may at any time resign as Depositary hereunder by
notice of its election so to do delivered to the Company,
such resignation to take effect upon the appointment of a
successor depositary and its acceptance of such appointment
as hereinafter provided.
The Depositary may at any time be removed by the
Company by notice of such removal delivered to the
Depositary, such removal to take effect upon the appointment
of a successor Depositary and its acceptance of such
appointment as hereinafter provided.
In case the Depositary acting hereunder shall at
any time resign or be removed, the Company shall, within 60
days after the delivery of the notice of resignation or
removal, as the case may be, appoint a successor Depositary,
<PAGE>
which shall be a bank or trust company having its principal
office in the United States of America and having a combined
capital and surplus of at least $50,000,000. Every successor
Depositary shall execute and deliver to its predecessor and
to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor
Depositary, without any further act or deed, shall become
fully vested with all the rights, powers, duties and
obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such
predecessor, upon payment of all sums due it and on the
written request of the Company, shall execute and deliver an
instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign,
transfer and deliver all right, title and interest in the
Stock and any moneys or property held hereunder to such
successor and shall deliver to such successor a list of the
record holders of all outstanding Depositary Receipts. Any
successor Depositary shall promptly mail notice of its
appointment to the record holders of Depositary Receipts.
Any corporation into or with which the Depositary
may be merged, consolidated or converted shall be the
successor of such Depositary without the execution or filing
of any document or any further act. Such successor
Depositary may authenticate the Depositary Receipts in the
name of the predecessor Depositary or in the name of the
successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The
Company agrees that it will deliver to the Depositary, and
the Depositary will, promptly after receipt thereof,
transmit to the record holders of Depositary Receipts, in
each case at the address recorded in the Depositary's books,
copies of all notices and reports (including, without
limitation, financial statements) required by law, the rules
of any national securities exchange upon which the Stock,
the Depositary Shares or the Depositary Receipts are listed
or by the Certificate of Incorporation (including the
Certificate of Designations) to be furnished by the Company
to holders of Stock. Such transmission will be at the
Company's expense, and the Company will provide the
Depositary with such number of copies of such documents as
the Depositary may reasonably request. In addition, the
Depositary will transmit to the holders of Depositary
Receipts (at the Company's expense) such other documents as
may be requested by the Company.
<PAGE>
SECTION 5.06. Indemnification by the Company. The
Company shall indemnify the Depositary, any Depositary's
Agent and any Registrar against, and hold each of them
harmless from, any loss, liability or expense (including the
costs and expenses of defending itself) which may arise out
of (i) acts performed or omitted in connection with this
Deposit Agreement and the Depositary Receipts (a) by the
Depositary, any Registrar or any of their respective agents
(including any Depositary's Agent), except for any liability
arising out of negligence or bad faith on the respective
parts of any such person or persons, or (b) by the Company
or any of its agents (other than the Depositary, the
Depositary's Agents, the Registrar, if any, or any of their
agents), or (ii) the offer, sale or registration of the
Depositary Receipts or the Stock pursuant to the provisions
hereof.
SECTION 5.07. Charges and Expenses. The Company
shall pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. The Company shall pay all charges of the
Depositary in connection with the initial deposit of the
Stock and the initial issuance of the Depositary Shares and
any redemption of the Stock. All other transfer and other
taxes and governmental charges shall be at the expense of
holders of Depositary Shares. If, at the request of a holder
of Depositary Receipts, the Depositary incurs charges or
expenses for which it is not otherwise liable hereunder,
such holder will be liable for such charges and expenses.
All other charges and expenses of the Depositary and any
Depositary's Agent hereunder and of any Registrar
(including, in each case, fees and expenses of counsel)
incident to the performance of their respective obligations
hereunder will be paid upon consultation and agreement
between the Depositary and the Company as to the amount and
nature of such charges and expenses. The Depositary shall
present its statement for charges and expenses to the
Company once every three months or at such other intervals
as the Company and the Depositary may agree.
ARTICLE VI
Amendment and Termination
SECTION 6.01. Amendment. The form of the
Depositary Receipts evidencing the Depositary Shares and any
provisions of this Deposit Agreement may at any time and
<PAGE>
from time to time be amended by agreement between the
Company and the Depositary in any respect which they may
deem necessary or desirable; provided, however, that no such
amendment which shall materially and adversely alter the
rights of the holders of Depositary Receipts shall be
effective unless such amendment shall have been approved by
the holders of at least a majority of the Depositary Shares
then outstanding. Every holder of an outstanding Depositary
Receipt at the time any such amendment becomes effective
shall be deemed, by continuing to hold such Depositary
Receipt, to consent and agree to such amendment and to be
bound by the Deposit Agreement as amended thereby. In no
event shall any amendment impair the right, subject to the
provisions of Sections 2.05 and 2.06 hereof, of any owner of
any Depositary Shares to surrender the Depositary Receipt
evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Stock and all money
and other property, if any, represented thereby, except in
order to comply with mandatory provisions of applicable law.
SECTION 6.02. Termination. This Deposit Agreement
may be terminated by the Company or the Depositary only
after (i) all outstanding Depositary Shares shall have been
redeemed pursuant to Section 2.03 or (ii) there shall have
been made a final distribution in respect of the Stock in
connection with any liquidation, dissolution or winding up
of the Company and such distribution shall have been
distributed to the holders of Depositary Shares pursuant to
Section 4.01 or 4.02, as applicable.
Upon the termination of this Deposit Agreement,
the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the
Depositary, any Depositary's Agent and any Registrar under
Sections 5.06 and 5.07.
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts. This Deposit Agreement
may be executed in any number of counterparts, and by each
of the parties hereto on separate counterparts, each of
which counterparts, when so executed and delivered, shall be
deemed an original, but all such counterparts taken
together, shall constitute one and the same instrument.
<PAGE>
SECTION 7.02. Exclusive Benefit of Parties. This
Deposit Agreement is for the exclusive benefit of the
parties hereto, and their respective successors hereunder,
and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
SECTION 7.03 Successors and Assigns. All covenants
and agreements in this Deposit Agreement and the Depositary
Shares issued by the Company shall bind its successors and
assigns, whether so expressed.
SECTION 7.04. Invalidity of Provisions. In case
any one or more of the provisions contained in this Deposit
Agreement or in the Depositary Receipts should be or become
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein or therein shall in no way be
affected, prejudiced or disturbed thereby.
SECTION 7.05. Notices. Any and all notices to be
given to the Company hereunder or under the Depositary
Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or
telegram or telex confirmed by letter, addressed to the
Company at Seven World Trade Center, New York, New York
10048, to the attention of the Secretary, or at any other
address of which the Company shall have notified the
Depositary in writing.
Any and all notices to be given to the Depositary
hereunder or under the Depositary Receipts shall be in
writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to the Depositary at the
Depositary's Office, at 525 Washington Boulevard, Jersey
City, New Jersey 07303, or at any other address of which the
Depositary shall have notified the Company in writing.
Any and all notices to be given to any record
holder of a Depositary Receipt hereunder or under the
Depositary Receipts shall be in writing and shall be deemed
to have been duly given if personally delivered or sent by
mail or by telegram or telex confirmed by letter, addressed
to such record holder at the address of such record holder
as it appears on the books of the Depositary, or if such
holder shall have filed with the Depositary a written
request that notices intended for such holder be mailed to
<PAGE>
some other address, at the address designated in such
request.
Delivery of a notice sent by mail or by telegram
or telex shall be deemed to be effected at the time when a
duly addressed letter containing the same (or a confirmation
thereof in the case of a telegram or telex message) is
deposited, postage prepaid, in a post office letter box. The
Depositary or the Company may, however, act upon any
telegram or telex message received by it from the other or
from any holder of a Depositary Receipt, notwithstanding
that such telegram or telex message shall not subsequently
be confirmed by letter or as aforesaid.
SECTION 7.06. Depositary's Agents. The Depositary
may from time to time appoint Depositary's Agents to act in
any respect for the Depositary for the purposes of this
Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of
such Depositary's Agents. The Depositary will notify the
Company of any such action.
SECTION 7.07. Holders of Depositary Receipts Are
Parties. The holders of Depositary Receipts from time to
time shall be parties to this Deposit Agreement and shall be
bound by all of the terms and conditions hereof and of the
Depositary Receipts by acceptance of delivery thereof.
SECTION 7.08. Governing Law. THIS DEPOSIT
AGREEMENT AND THE DEPOSITARY RECEIPTS AND ALL RIGHTS
HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 7.09. Inspection of Deposit Agreement.
Copies of this Deposit Agreement shall be filed with the
Depositary and the Depositary's Agents and shall be open to
inspection during business hours at the Depositary's Office
and the respective offices of the Depositary's Agents, if
any, by any holder of a Depositary Receipt.
<PAGE>
SECTION 7.10. Headings. The headings of articles
and sections in this Deposit Agreement and in the form of
the Depositary Receipt set forth in Exhibit A hereto have
been inserted for convenience only and are not to be
regarded as a part of this Deposit Agreement or the
Depositary Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in
the Depositary Receipts.
SECTION 7.11. Separability Clause. In case any
provision in this Deposit Agreement or in the Depositary
Shares shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions hereof and thereof shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the Company and the Depositary
have duly executed this Deposit Agreement as of the day and
year first above set forth, and all holders of Depositary
Receipts shall become parties hereto by and upon acceptance
by them of delivery of Depositary Receipts issued in
accordance with the terms hereof.
SALOMON INC
By____________________________
Authorized Officer
FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By____________________________
Authorized Officer
<PAGE>
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES,
EACH REPRESENTING A ONE-TWENTIETH (1/20)
INTEREST IN A SHARE OF % CUMULATIVE
PREFERRED STOCK, SERIES F
(WITHOUT PAR VALUE)
OF
SALOMON INC
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
NUMBER
DR_______________
DEPOSITARY SHARES
_________________
(EACH DEPOSITARY SHARE REPRESENTS A ONE-TWENTIETH INTEREST
IN A SHARE OF % CUMULATIVE PREFERRED STOCK,
SERIES F (WITHOUT PAR VALUE))
CUSIP __________
1. First Chicago Trust Company of New York, a corporation duly organized and
existing under the laws of the State of New York, as Depositary (the
"Depositary"), hereby certifies that ___________________________________________
IS THE REGISTERED OWNER OF ________________ DEPOSITARY SHARES ("Depositary
Shares"), each Depositary Share representing a one-twentieth (1/20) interest in
a share of % Cumulative Preferred Stock, Series F, without par value (the
"Preferred Stock"), of Salomon Inc, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"). Subject to the terms of
the Deposit Agreement (as defined below), each owner of a Depositary Share is
entitled, proportionately, through the Depositary, to all the rights and
preferences of the Preferred Stock relating thereto, including dividend, voting,
redemption and liquidation rights contained in the Company's Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), and the
certificate of designations filed with the Secretary of State of the State of
Delaware establishing the Preferred Stock as a series of preferred stock of the
Company and setting forth the number, terms, powers, designations, rights,
preferences, qualifications, restrictions and limitations of the Preferred Stock
(the "Certificate of Designations").
2. The Deposit Agreement. Depositary Receipts (the "Receipts"), of which
this Receipt is one, are made available upon the terms and conditions set forth
in the Deposit Agreement, dated as of , 1996 (the "Deposit
Agreement"), among the Company, the Depositary and the holders from time to time
of Receipts. The Deposit Agreement (copies of which are on file at the
Depositary's Office) sets forth the rights of holders of Receipts and the rights
and duties of the Depositary and the Company in respect of the Preferred Stock
deposited, and any and all other property and cash deposited from time to time,
thereunder. The statements made on the face and the reverse of this Receipt are
summaries of certain provisions of the Deposit Agreement and are subject to the
detailed provisions thereof, to which reference is hereby made. Unless otherwise
expressly herein provided, all capitalized terms used herein shall have the
meanings ascribed thereto in the Deposit Agreement.
3. Redemption. Whenever the Company shall elect to redeem shares of
Preferred Stock in accordance with the provisions of the Certificate of
Incorporation and the Certificate of Designations, it shall (unless otherwise
agreed in writing with the Depositary) give the Depositary not less than 30 nor
more than 60 days' notice of the date of such proposed redemption of Preferred
Stock. The Depositary shall mail notice of such redemption and the proposed
simultaneous redemption of the number of Depositary Shares representing the
Preferred Stock to be redeemed, first-class postage prepaid, not less than 20
and not more than 50 days prior to the date fixed for redemption of such
Preferred Stock and Depositary Shares (the "Redemption Date") to the record
holders of the Receipts evidencing the Depositary Shares to be so redeemed. Each
such notice shall state: (a) the Redemption Date; (b) the number of Depositary
Shares to be redeemed; (c) the redemption price (which shall include full
cumulative dividends thereon to the Redemption Date); (d) the place or places
where Receipts evidencing Depositary Shares are to be surrendered for payment of
the redemption price; and (e) that dividends in respect of the Preferred Stock
underlying the Depositary Shares to be redeemed will cease to accumulate at the
close of business on such Redemption Date. In case less than all the outstanding
Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed
shall be selected by lot or pro rata as may be determined by the Depositary to
be equitable. Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to redeem the
shares of Preferred Stock to be redeemed by it on such date), all dividends in
respect of the shares of Preferred Stock so called for redemption shall cease to
accumulate, the Depositary Shares being redeemed from such proceeds shall be
deemed no longer to be outstanding, all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the redemption
price) shall, to the extent of such Depositary Shares, cease and terminate and,
upon surrender in accordance with such notice of the Receipts evidencing any
such Depositary Shares (properly endorsed or assigned for transfer, if the
Depositary shall so require), such Depositary Shares shall be redeemed by the
Depositary at a redemption price per Depositary Share equal to one-twentieth of
the redemption price per share paid in respect of the shares of Preferred Stock
plus all money and other property, if any, represented by such Depositary
Shares, including all amounts paid by the Company in respect of dividends which
on the Redemption Date have accumulated on the shares of Preferred Stock to be
so redeemed and have not theretofore been paid.
4. Transfer, Split-ups, Combinations. This Receipt is transferable on the
books of the Depositary upon surrender of this Receipt to the Depositary by the
holder in person or by duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer, and upon such
transfer the Depositary shall execute a new Receipt to or upon the order of the
person entitled thereto, as provided in the Deposit Agreement. This Receipt may
be split into other Receipts or combined with other Receipts into one Receipt,
subject to the terms and conditions of the Deposit Agreement evidencing the same
aggregate number of Depositary Shares as the Receipt or Receipts surrendered.
5. Surrender of Receipts and Withdrawal of Preferred Stock. The holder of
this Receipt, if this Receipt (together with any other Receipts surrendered by
such holder) represents any number of whole shares of Preferred Stock, may
withdraw the Preferred Stock and all money and other property, if any,
represented hereby by surrendering this Receipt (and such other Receipts) at the
Depositary's Office or at such other offices as the Depositary may designate for
such withdrawals. If a Receipt delivered by the holder to a Depositary in
connection with such withdrawal shall evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of Preferred Stock to be so withdrawn, the Depositary shall at the same
time, in addition to such number of whole shares of Preferred Stock and such
money and other property, if any, to be so withdrawn, deliver to such holder, or
(subject to the provisions of the Deposit Agreement) upon his order, a new
Receipt evidencing such excess number of Depositary Shares. Delivery of the
Preferred Stock and money and other property being withdrawn may be made by the
delivery of such certificates, documents of title and other instruments as the
Depositary may deem appropriate, which, if required by law, shall be properly
endorsed or accompanied by proper instruments of transfer.
If the Preferred Stock and the money and other property being withdrawn
are to be delivered to a person or persons other than the record holder of this
Receipt or such other Receipts being surrendered for withdrawal of Preferred
Stock, such holder shall execute and deliver to the Depositary a written order
so directing the Depositary, and the Depositary may require that this Receipt or
such other Receipts surrendered by such holder for withdrawal of such shares of
Preferred Stock be properly endorsed in blank or accompanied by a properly
executed instrument of transfer in blank.
6. Suspension of Delivery, Transfer, etc. The transfer or surrender of this
Receipt may be suspended during any period when the register of stockholders of
the Company is closed or if any such action is deemed necessary or advisable by
the Depositary, any agent of the Depositary or the Company at any time or from
time to time because of any requirement of law of any government or governmental
body or commission, or under any provision of the Deposit Agreement.
7. Payment of Taxes or Other Governmental Charges. If any tax or other
governmental charge shall become payable by or on behalf of the Depositary with
respect to this Receipt, such tax (including transfer taxes, if any) or
governmental charge shall be payable by the holder hereof, subject to certain
exceptions in the Deposit Agreement. Transfer of this Receipt may be refused
until such payment is made, and any dividends, interest payments or other
distributions may be withheld or all or any part of the Preferred Stock or other
property represented by this Receipt and not theretofore sold may be sold for
the account of the holder thereof (after attempting by reasonable means to
notify such holder prior to such sale), and such dividends, interest payments or
other distributions or the proceeds of any such sale may be applied to any
payment of such charges or expenses, the holder of this Receipt remaining liable
for any deficiency.
8. Warranty by the Company. The Company has represented and warranted that
the Preferred Stock, when issued, will be validly issued, fully paid and
nonassessable.
9. Amendment. The form of the Receipts and any provisions of the Deposit
Agreement may at any time and from time to time be amended by agreement between
the Company and the Depositary in any respect which they deem necessary or
desirable; provided, however, that no such amendment which shall materially and
adversely alter the rights of the holders of Receipts shall be effective unless
such amendment shall have been approved by the holders of at least a majority of
the Depositary Shares then outstanding. A holder of a Receipt at the time any
such amendment so becomes effective shall be deemed, by continuing to hold such
Receipt, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. In no event shall any amendment impair the right,
subject to the provisions of Sections 2.05 and 2.06 of the Deposit Agreement, of
the owner of the Depositary Shares evidenced by this Receipt to surrender this
Receipt with instructions to the Depositary to deliver to the holder the number
of whole shares of the Preferred Stock and all money and other property, if any,
represented thereby, except in order to comply with mandatory provisions of
applicable law.
DATED:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
DEPOSITARY, TRANSFER AGENT AND REGISTRAR
BY _______________________________________
AUTHORIZED OFFICER
FURTHER CONDITIONS AND AGREEMENTS FORMING PART OF THIS RECEIPT APPEAR ON THE
REVERSE SIDE
<PAGE>
10. Charges of Depositary. The Company will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements and all charges of the Depositary in connection with the
initial deposit of the Preferred Stock and the initial issuance of the
Depositary Shares and any redemption of the Preferred Stock at the option of the
Company. All other transfer and other taxes and other governmental charges shall
be at the expense of holders of Depositary Shares.
11. Title to Receipts. This Receipt (and the Depositary Shares evidenced
hereby), when properly endorsed or accompanied by a properly executed instrument
of transfer, is transferable by delivery with the same effect as in the case of
a negotiable instrument; provided, however, that until transfer of a Receipt
shall be registered on the books of the Depositary, the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the person
entitled to distributions of dividends or other distributions or to any notice
provided for in the Deposit Agreement, and for all other purposes.
12. Dividends and Distributions. Whenever the Depositary receives any cash
dividend or other cash distribution on the Preferred Stock, the Depositary will,
subject to the provisions of the Deposit Agreement, make such distribution to
the Receipt holders as nearly as practicable in proportion to the number of
Depositary Shares evidenced by the Receipts held by them; provided, however,
that the amount distributed will be reduced by any amounts required to be
withheld by the Company or the Depositary on account of taxes. Other
distributions received on the Preferred Stock may be distributed to holders of
Receipts as provided in the Deposit Agreement.
13. Fixing of Record Date. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or if rights, preferences or privileges shall at any time be offered, with
respect to the Preferred Stock, or whenever the Depositary shall receive notice
of (a) any meeting at which holders of Preferred Stock are entitled to vote or
of which holders of Preferred Stock are entitled to notice or (b) any election
on the part of the Company to redeem any shares of Preferred Stock, the
Depositary shall in each instance fix a record date (which shall be the record
date fixed by the Company with respect to the Preferred Stock), for the
determination of the holders of Receipts who shall be entitled to receive such
dividend, distribution, rights, preferences or privileges or the net proceeds of
the sale thereof, or to give instructions for the exercise of voting rights at
any such meeting, or who shall be entitled to notice of such meeting or
redemption of Preferred Stock.
14. Voting Rights. Upon receipt of notice of any meeting at which holders
of Preferred Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting and
(ii) a statement that the holders may, subject to any applicable restrictions,
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of Preferred Stock relating to their respective Depositary Shares
(including an express indication that instructions may be given to the
Depositary to give a discretionary proxy to a person designated by the Company)
and a brief statement as to the manner in which such instructions may be given.
Upon the written request of the holders of Receipts on such record date, the
Depositary shall endeavor insofar as practicable to vote or cause to be voted,
In accordance with the instructions set forth in such request, the maximum
number of whole shares of Preferred Stock underlying the Depositary Shares
evidenced by all Receipts as to which any particular voting instructions are
received. In the absence of specific instructions from the holder of a Receipt,
the Depositary will abstain from voting (but, at its discretion, not from
appearing at any meeting with respect to such Preferred Stock unless directed to
the contrary by the holders of all the Receipts) to the extent of the Preferred
Stock underlying the Depositary Shares evidenced by such Receipt.
15. Changes Affecting Deposited Securities. Upon any change in par or
stated value, split-up, combination or any other reclassification of the
Preferred Stock or upon any recapitalization, reorganization, merger,
amalgamation or consolidation or sale of all or substantially all of the
Company's assets affecting the Company or to which it is a party, the Depositary
may in its discretion with the approval of, and shall upon the instructions of,
the Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments in (a) the fraction of an interest in one
share of Preferred Stock underlying one Depositary Share and (b) the ratio of
the redemption price per Depositary Share to the redemption price of a share of
Preferred Stock, in each case as may be necessary fully to reflect the effect of
such change in par or stated value, split-up, combination or other
reclassification of Preferred Stock or such recapitalization, reorganization,
merger, amalgamation or consolidation or sale and (ii) treat any securities
which shall be received by the Depositary in exchange for or upon conversion or
in respect of the Preferred Stock as new deposited securities so received in
exchange for or upon conversion or in respect of such Preferred Stock. In any
such case, the Depositary may in its discretion, with the approval of the
Company, execute and deliver additional Receipts, or it may call for the
surrender of outstanding Receipts to be exchanged for new Receipts specifically
describing such new deposited securities. Anything to the contrary herein or in
the Deposit Agreement notwithstanding, holders of Receipts shall have the right
from and after the effective date of any such change in par or stated value,
split-up, combination or other reclassification of the Preferred Stock or any
such recapitalization, reorganization, merger, amalgamation, consolidation or
sale to surrender such Receipts to the Depositary with instructions to convert,
exchange or surrender the Preferred Stock represented thereby only into or for,
as the case may be, the kind and amount of shares of stock and other securities
and property and cash into which the Preferred Stock represented by such
Receipts might have been converted or for which such Preferred Stock might have
been exchanged or surrendered immediately prior to the effective date of such
transaction.
16. Prevention of or Delay in Performance by the Depositary, the
Depositary's Agents, the Registrar or the Company. Neither the Depositary nor
any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or any Registrar, by reason of any provision, present or
future, of the Certificate of Incorporation (including the Certificate of
Designations) or by reason of any act of God or war or other circumstance beyond
their control, the Depositary, the Depositary's Agent, any Registrar or the
Company shall be prevented or forbidden from doing or performing any act or
thing which the terms of the Deposit Agreement provide shall be done or
performed; nor shall the Depositary, any Depositary's Agent, any Registrar or
the Company incur any liability to any holder of a Receipt by reason of
nonperformance or delay, caused as aforesaid, in performance of any act or thing
which by the terms of the Deposit Agreement it is provided shall or may be done
or performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in the Deposit Agreement except, in the case of any
exercise or failure to exercise discretion not caused as aforesaid, if caused by
the negligence or willful misconduct of the party charged with such exercise or
failure to exercise.
17. Obligations of the Depositary, the Depositary's Agents, the Registrar
and the Company. Neither the Depositary nor any Depositary's Agent nor any
Registrar nor the Company assumes any obligation or shall be subject to any
liability under the Deposit Agreement to holders of Receipts other than for its
negligence or willful misconduct. Neither the Depositary nor any Depositary's
Agent nor any Registrar nor the Company shall be under any obligation to appear
in, prosecute or defend any action, suit or other proceeding in respect of the
Preferred Stock, the Depositary Shares or the Receipts which in its opinion may
involve it in expense or liability unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required. Neither the
Depositary nor any Depositary's Agent nor any Registrar nor the Company shall be
liable for any action or any failure to act by it in reliance upon the written
advice of legal counsel or accountants, or information from any person
presenting Preferred Stock for deposit, any holder of a Receipt or any other
person believed by it in good faith to be competent to give such information.
The Depositary, and Depositary's Agent, any Registrar and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties. The Depositary shall not be
responsible for any failure to carry out any instruction to vote any of the
shares of Preferred Stock or for the manner or effect of any such vote, as long
as any such action or nonaction is in good faith. The Depositary undertakes, and
any Registrar shall be required to undertake, to perform such duties and only
such duties as are specifically set forth in the Deposit Agreement, and no
implied covenants or obligations shall be read into the Deposit Agreement
against the Depositary or any Registrar. The Depositary will indemnify the
Company against any liability which may arise out of acts performed or omitted
by the Depositary or its agents due to its or their negligence or bad faith. The
Depositary, the Depositary's Agents and any Registrar may own and deal in any
class of securities of the Company and its affiliates and in Receipts. The
Depositary may also act as transfer agent or registrar of any of the securities
of the Company and its affiliates.
18. Resignation and Removal of Depositary. The Depositary may at any time
(i) resign by written notice of its election to do so delivered to the Company,
such resignation to take effect upon the appointment of a successor Depositary
and its acceptance of such appointment, or (ii) be removed by the Company by
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor Depositary and its acceptance of such
appointment, all as provided in the Deposit Agreement.
19. Termination of Deposit Agreement. The Deposit Agreement may be
terminated by the Company or the Depositary only after (i) all outstanding
Depositary Shares shall have been redeemed or (ii) there shall have been made a
final distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution
shall have been distributed to the holders of Receipts. Upon the termination of
the Deposit Agreement, the Company shall be discharged from all obligations
thereunder except for its obligations to the Depositary, any Depositary's Agent
and any Registrar with respect to indemnification, charges and expenses, in
either case in accordance with the terms of the Deposit Agreement.
20. Governing Law. THIS RECEIPT AND THE DEPOSIT AGREEMENT AND ALL RIGHTS
HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been authenticated, manually or, if a Registrar for the Receipts (other
than the Depositary) shall have been appointed, by facsimile signature of a duly
authorized officer of the Depositary and, if authenticated by facsimile
signature of the Depositary shall have been countersigned manually by such
Registrar by the signature of a duly authorized officer.
A COPY OF THE DEPOSIT AGREEMENT AND A FULL STATEMENT OF THE DESIGNATION,
RELATIVE RIGHTS, INTERESTS, PREFERENCES AND RESTRICTIONS OF THE PREFERRED STOCK
REPRESENTED BY THIS RECEIPT AND OF EACH CLASS OF SHARES OR SERIES THEREOF THAT
THE COMPANY IS AUTHORIZED TO ISSUE WILL BE FURNISHED BY THE COMPANY, WITHOUT
CHARGE, TO EACH HOLDER OF A RECEIPT UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY AT SEVEN WORLD TRADE CENTER, NEW YORK, NEW YORK 10048.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER
IDENTIFYING NUMBER _______________________________________________________
OF ASSIGNEE Please print or typewrite name and address of assignee
____________________ _______________________________________________________
the within Receipt and all rights and interests represented thereby, and hereby
irrevocably constitutes and appoints _______________________________ attorney,
to transfer the same on the books of the within named Depositary, with full
power of substitution in the premises.
Dated_______________________________ Signature_________________________________
ASSIGNMENT AND TRANSFER SIGNATURE LINES
NOTE: The signature to any endorsement hereon must correspond with the name as
written upon the face of this Receipt in every particular, without alteration or
enlargement or any change whatever. If the endorsement must be executed by an
attorney, executor, administrator, trustee or guardian, the person executing the
endorsement must give his full title in such capacity, and proper evidence of
authority to act in such capacity, if not on file with the Depositary, must be
forwarded with this Receipt. All endorsements or assignments of Receipts must be
guaranteed by a New York Stock Exchange member firm or member of the Clearing
House of the American Stock Exchange Clearing Corporation or by a bank or trust
company having an office or correspondent in The City of New York.
Exhibit 5(a)
June 24, 1996
Registration Statement on Form S-3
Registration No. 333-02897
Ladies and Gentlemen:
We have acted as special counsel for Salomon Inc, a Delaware
corporation (the "Company"), and SI Financing Trust I, a statutory
business trust created under the Business Trust Act of the State of
Delaware (the "Trust"), in connection with the preparation and filing
with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), of a Registration
Statement on Form S-3 (Registration No. 333-02897), as amended (the
"Registration Statement") for the registration under the Act of: (a)
Trust Preferred Stock(sm) (TRUPS(sm)) Units (the "Units") consisting
of (i) Trust Preferred Securities (the "Preferred Securities") issued
by the Trust and (ii) Purchase Contracts of the Company requiring the
purchase of depositary shares (the "Depositary Shares") evidenced by
depositary receipts (the "Depositary Receipts"), each representing a
one-twentieth interest in a share of Cumulative Preferred Stock,
Series F (the "Series F Preferred Stock"), of the Company; (b) a
guarantee by the Company on a subordinated basis of the payment of
distributions on the Preferred Securities out of money held by the
Trust and payments upon redemption of the Preferred Securities or
liquidation of the Trust, to the extent set forth in the Registration
Statement, pursuant to the Preferred Securities Guarantee Agreement
(the "Guarantee") between the Company and Chemical Bank, as Guarantee
Trustee; and (c) Subordinated Debt Securities of the Company (the
"Subordinated Debt Securities") which will be issued under
<PAGE>
an Indenture, as supplemented from time to time and as supplemented by
a Third Supplemental Indenture in respect of the Subordinated Debt
Securities (the "Indenture") between the Company and Bankers Trust
Company, as Trustee. The Units will be issued pursuant to a Unit
Agreement (the "Unit Agreement") between the Company and Chemical
Bank, as Unit Agent. The Depositary Receipts evidencing the Depositary
Shares will be issued pursuant to a Deposit Agreement (the "Deposit
Agreement") between the Company and First Chicago Trust Company of New
York, as Depositary. The Series F Preferred Stock will be issued
pursuant to a Certificate of Designations (the "Certificate of
Designations") to be filed by the Company with the Secretary of State
of the State of Delaware. Capitalized terms not otherwise defined
herein have the meanings assigned to them in the Registration
Statement.
In connection with this opinion, 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 or appropriate for the purposes of this opinion.
Based on the foregoing, we are of opinion as follows:
1. When the Unit Agreement has been duly authorized,
executed and delivered by the Company and the Unit Agent, the Unit
Agreement will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject as to enforceability to general principles of
equity, regardless of whether such enforceability is sought in a
proceeding in equity or at law); and when the Units are issued in
accordance with the terms of the Unit Agreement and delivered against
payment therefor, the Units will entitle the holders thereof to the
rights specified in the Unit Agreement (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally and
subject as to enforceability to general principles of equity,
regardless of whether such enforceability is sought in a proceeding in
equity or at law).
<PAGE>
2. When the Purchase Contracts have been duly authorized,
executed and delivered by the Company, the Purchase Contracts will
constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject as to enforceability to general principles of
equity, regardless of whether such enforceability is sought in a
proceeding in equity or at law).
3. When the Deposit Agreement has been duly authorized,
executed and delivered by the Company and the Depositary, the Deposit
Agreement will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject as to enforceability to general principles of
equity, regardless of whether such enforceability is sought in a
proceeding in equity or at law); and when the Depositary Receipts are
issued in accordance with the provisions of the Deposit Agreement
against the deposit of validly issued, fully paid and nonassessable
shares of Series F Preferred Stock, such Depositary Receipts will
entitle the holders thereof to the rights specified in such Depositary
Receipts and in the Deposit Agreement (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally and
subject as to enforceability to general principles of equity,
regardless of whether such enforceability is sought in a proceeding in
equity or at law).
4. When the shares of the Series F Preferred Stock have been
duly and validly authorized by the Company, the Certificate of
Designations has been duly filed with the Secretary of State of the
State of Delaware and the shares of the Series F Preferred Stock have
been duly issued and delivered against payment therefor, such shares
will be validly issued, fully paid and nonassessable.
5. When the Guarantee has been duly authorized, executed and
delivered by the Company, the Guarantee will constitute a legal, valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms (subject to applicable bankruptcy,
insolvency,
<PAGE>
fraudulent transfer, reorganization, moratorium or other laws
affecting creditors' rights generally and subject as to enforceability
to general principles of equity, regardless of whether such
enforceability is sought in a proceeding in equity or at law).
6. When (a) The Subordinated Debt Securities have been duly
authorized by the Company, (b) the Third Supplemental Indenture in
respect of the Subordinated Debt Securities has been duly executed and
delivered by the Company and the Indenture Trustee and (c) the
Subordinated Debt Securities have been duly executed by the Company
and authenticated by the Indenture Trustee in accordance with the
terms of the Indenture and delivered against payment therefor, the
Subordinated Debt Securities will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
laws affecting creditors' rights generally and subject as to
enforceability to general principles of equity, regardless of whether
such enforceability is sought in a proceeding in equity or at law).
We are members of the bar of the State of New York and
express no opinion as to any matters governed by any laws other than
the laws of the State of New York, the General Corporation Law of the
State of Delaware and the Federal laws of the United States of
America.
We know that we are referred to under the heading "LEGAL
OPINIONS" in the form of Prospectus included in the Registration
Statement, and we hereby consent to the use of our name therein and to
the filing of this opinion with the Commission as Exhibit 5(a) to the
Registration Statement.
Very truly yours,
Salomon Inc
SI Financing Trust I
Seven World Trade Center
New York, NY 10048
<PAGE>
Exhibit 5(b)
June __, 1996
Salomon Brothers Inc
As Representative of the Several Underwriters
Seven World Trade Center
New York, NY 10048
Re: SI Financing Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel to SI
Financing Trust I, a Delaware statutory business trust (the
"Trust"), in connection with certain matters relating to the
organization of the Trust and the proposed issuance of Preferred
Securities to beneficial owners pursuant to and as described in
Registration Statement No. 333-2897 (and the Prospectus forming a
part thereof) on Form S-3 filed with the Securities and Exchange
Commission on April 26, 1996, as amended by Pre-Effective
Amendment Nos. 1, 2 and 3 thereto (as so amended, the
"Registration Statement"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Amended and
Restated Declaration of Trust of the Trust in the form attached
as an exhibit to the Registration Statement (the "Governing
Instrument"). This opinion is being delivered to you pursuant to
Section 6(e) of the Underwriting Agreement between Salomon Inc
and the Trust as confirmed and accepted by Salomon Brothers Inc
for itself and the other several Underwriters named on Schedule I
thereto dated June __, 1996 (the "Underwriting Agreement").
In rendering this opinion, we have examined copies of
the following documents in the forms provided to us: the
Certificate of Trust of the Trust as filed in the Office of the
Secretary of State of the State of Delaware (the "State Office")
on April 25, 1996 (the "Certificate"); a Declaration of Trust of
the Trust dated as of April 25, 1996 (the "Original Governing
Instrument"); the Governing Instrument; the Underwriting
Agreement; the Indenture dated as of December 1, 1988 between
Salomon Inc and Bankers Trust Company, as Trustee; the Preferred
Securities Guarantee Agreement by Salomon Inc dated as of _______
__, 1996; the Common Securities Guarantee Agreement by Salomon
Inc dated as of __________ __, 1996; the Third Supplemental
Indenture dated as of _________ __, 1996 between Salomon Inc and
the Bankers Trust Company, as Trustee; the Registration
1
<PAGE>
Statement; a Trust Certificate dated the date hereof in the form
attached hereto as Exhibit A (the "Trust Certificate"); and a
certificate of good standing of the Trust obtained as of a recent
date from the State Office. In such examinations, we have assumed
the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or
forms of documents to be executed and the legal capacity of
natural persons to complete the execution of documents. We have
further assumed for purposes of this opinion: (i) the due
formation or organization, valid existence and good standing of
each entity (other than the Trust) that is a party to any of the
documents reviewed by us under the laws of the jurisdiction of
its respective formation or organization; (ii) the due
authorization, execution and delivery by, or on behalf of, each
of the parties thereto (other than the Trust) of the
above-referenced documents (and the due execution and delivery of
the Governing Instrument and the Underwriting Agreement prior to
the first issuance of Preferred Securities); (iii) that no event
has occurred subsequent to the filing of the Certificate that
would cause a dissolution or liquidation of the Trust under the
Original Governing Instrument or the Governing Instrument, as
applicable; (iv) that the activities of the Trust have been and
will be conducted in accordance with the Original Governing
Instrument or the Governing Instrument, as applicable; (v) that
each Holder of Preferred Securities has made payment of the
required consideration therefor and received a Preferred
Securities Certificate in consideration thereof in accordance
with the terms and conditions of the Governing Instrument,
Registration Statement and Underwriting Agreement; (vi) that the
Preferred Securities are issued and sold to the Preferred
Securities Holders in accordance with the terms, conditions,
requirements and procedures set forth in the Governing
Instrument, Registration Statement and Underwriting Agreement;
(vii) that the Sponsor has directed the Regular Trustees to take
the actions contemplated by Section 3.6(b) of the Governing
Instrument; and (viii) that the documents examined by us are in
full force and effect, express the entire understanding of the
parties thereto with respect to the subject matter thereof and
have not been modified, supplemented or otherwise amended, except
as herein referenced. No opinion is expressed with respect to the
requirements of, or compliance with, federal or state securities
or blue sky laws. We have not participated in the preparation of
the Registration Statement or any other offering materials
relating to the Preferred Securities and we assume no
responsibility for their contents. As to any fact material to our
opinion, other than those assumed, we have relied without
independent investigation on the above-referenced documents and
on the accuracy, as of the date hereof, of the matters therein
contained. Where any opinion set forth herein as qualified as "to
our knowledge", such opinion is based solely upon the facts set
forth in the Trust Certificate. For purposes of our opinion set
forth in paragraph 7 below, we refer only to laws of the
2
<PAGE>
State of Delaware that, in our experience, are normally
applicable to transactions of the type contemplated by the
Underwriting Agreement, as in effect on the date hereof (other
than securities or blue sky laws), the term Delaware governmental
authority means any Delaware executive, legislative,
administrative or regulatory body under such Delaware laws and
the reference to governmental approval means any consent,
approval, license, authorization or validation of, or notice to,
or filing, recording or registration with any such governmental
authority pursuant to such Delaware laws.
Based on and subject to the foregoing, and limited in
all respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing
business trust in good standing under the laws of the State of
Delaware.
2. Under the Delaware Business Trust Act, 12 Del. C.
Sections 3801, et seq (the "Delaware Act"), and the Governing
Instrument, the Trust has the business trust power authority to
(A) execute and deliver, and perform its obligations under, the
Underwriting Agreement, (B) issue and perform its obligations
under the Preferred Securities and the Common Securities and (C)
purchase and hold the Subordinated Debt Securities.
3. The Preferred Securities have been duly authorized
by the Governing Instrument and, when issued in accordance with
the Governing Instrument and paid for and delivered in accordance
with the Underwriting Agreement, will represent, subject to the
qualifications set forth in paragraph 5 below, fully paid and
non- assessable beneficial interests in the assets of the Trust
and will entitle the holders thereof to the benefits of the
Governing Instrument (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and
other laws affecting creditors' rights generally from time to
time in effect, application of equitable principles (regardless
of whether considered in a proceeding in equity or at law), and
considerations of public policy or the effect of applicable law
relating to fiduciary duties).
4. The Common Securities have been duly authorized by
the Governing Instrument and, when issued and sold in accordance
with the Governing Instrument, will represent, subject to the
qualifications set forth in paragraph 5 below, fully paid and
non- assessable beneficial interests in the assets of the Trust.
5. The holders of the Preferred Securities and the
Common Securities will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware; provided, however, we express no
3
<PAGE>
opinion with respect to the liability of any Security Holder who
is, was or may become a named Trustee of the Trust.
Notwithstanding the foregoing, we note that pursuant to Section
11.4 of the Governing Instrument, the Trust may withhold amounts
otherwise distributable to a holder of a security and pay over
such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be
deemed to have been distributed to such Holder, that pursuant to
the Governing Instrument the holders of Securities may be
obligated to make payments or provide indemnity or security under
the circumstances set forth therein and that holders of Common
Securities are liable for all of the debts and obligations of the
Trust to the extent specified in Section 10.1(b) of the Governing
Instrument.
6. Under the Delaware Act and the Governing
Instrument, the issuance of the Preferred Securities and the
Common Securities is not subject to preemptive rights.
7. The issuance, sale and delivery by the Trust of the
Preferred Securities and of the Common Securities, the execution
and delivery by the Trust of the Underwriting Agreement, the
purchase by the Trust of the Subordinated Debt Securities and the
performance by the Trust of its obligations thereunder does not
(a) result in any violation of the Governing Instrument or any
applicable Delaware law (statutory or decisional) or any order,
rule or regulation of any Delaware governmental agency or body
having jurisdiction over the Trust or any of its properties or
assets, (b) require the approval of any such Delaware
governmental agency or body, or (c) to our knowledge, without
independent investigation, conflict with or result in a breach or
violation of any of the provisions of, or constitute a default
under, any contract, indenture, mortgage, loan agreement, deed of
trust, note, lease or other instrument to which the Trust is a
party or to which any of its property or assets is subject.
8. The Underwriting Agreement has been duly
authorized and executed by the Trust.
9. The Governing Instrument constitutes a valid and
binding obligation of the Sponsor and the Regular Trustees and is
enforceable against the Sponsor and the Regular Trustees in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or
other laws affecting creditors' rights generally from time to
time in effect, application of equitable principles (regardless
of whether considered in a proceeding in equity or at law), and
considerations of public policy or the effect of applicable law
relating to fiduciary duties).
We hereby consent to the filing of this opinion as an
4
<PAGE>
exhibit to the Registration Statement and to the use of our name
under the heading "Legal Opinions" in the prospectus. In giving
this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
This opinion speaks only as of the date hereof and is based on
our understandings and assumptions as to present facts, and on
our review of the above referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we
undertake no obligation to update or supplement this opinion
after the date hereof for the benefit of any person or entity
with respect to any facts or circumstances that may hereafter
come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely
for the benefit of the addressee hereof in connection with the
matters contemplated hereby and may not be relied on by any other
person or entity or for any other purpose without our prior
written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
5
<PAGE>
EXHIBIT 8
June 24, 1996
SALOMON INC
SI FINANCING TRUST I
TRUST PREFERRED STOCK(SERVICE MARK) UNITS
Dear Sirs:
We have acted as special federal tax counsel for Salomon Inc, a Delaware
corporation (the 'Company'), and SI Financing Trust I, a statutory business
trust created under the Business Trust Act of the State of Delaware (the
'Trust'), in connection with the preparation and filing with the Securities and
Exchange Commission (the 'Commission') under the Securities Act of 1933, as
amended (the 'Act'), of a Registration Statement on Form S-3 (No. 333-02987), as
amended (the 'Registration Statement'), for the Registration under the Act of
(a) Trust Preferred Stock(Service Mark) Units (the 'Units') consisting of
Preferred Securities issued by the Trust (the 'Preferred Securities') and
Purchase Contracts of the Company (the 'Purchase Contracts') requiring the
purchase of depositary shares (the 'Depositary Shares') each representing a
one-twentieth interest in a share of the Company's Cumulative Preferred Stock,
Series F (the 'Series F Preferred Stock'), (b) Subordinated Debt Securities (the
'Subordinated Debt Securities') issued by the Company, and (c) the Company's
Guarantee of the Preferred Securities. Capitalized terms not otherwise defined
herein have the meanings assigned to them in the Registration Statement.
In that connection, 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 or appropriate for the
purposes of this opinion. We assume that all transactions relating to the Trust
and the securities described in the preceding paragraph will be carried out in
accordance with the terms of the governing documents without any amendments
thereto or waiver of any terms thereof, that such documents represent the entire
agreement of the parties thereto, and that all representations and warranties
contained in such documents are true.
In addition, we have been informed by the Company of the following facts,
which we have assumed to be true and upon which we have relied, without
independent investigation, in expressing the opinions set forth below:
1. A Unit will be issued to the public for the Stated Amount of the
Preferred Securities.
2. The Preferred Securities would (if rated) be treated by one or more
major rating agencies as subordinated debt for ratings purposes. At the
time of the issuance, the Company's subordinated debt carries an investment
grade rating and therefore, the Preferred Securities would also carry an
investment grade rating, if rated. To avoid confusion by the market, the
rating agencies will most likely not rate the Preferred Securities unless
and until they are separated from the Units.
3. The interest rate on the Subordinated Debt Securities is a market
rate for subordinated debt of the Company with a 30-year term issued at par
and callable after 5 years.
4. The dividend rate on the Series F Preferred Stock represented by
the Depositary Shares is slightly above a market rate for preferred stock
of the Company issued at par and having the terms of the Series F Preferred
Stock that the Company would be required to pay if the Company were to
issue directly such preferred stock in lieu of issuance of the Units.
5. The annual fee payable under the Purchase Contracts is a market
rate.
6. Under current market conditions, if the Company accelerated the
exercise of the Purchase Contracts immediately after issuance of the Units,
immediately following such exercise the Preferred Securities standing alone
would, if traded, trade at at last $105 (due to the 5-year put
feature that first becomes effective upon acceleration of the Purchase
Contracts).
<PAGE>
7. There is a significant possibility (taking into account interest
rate levels and the credit quality of the Company) that, upon the Company's
acceleration of the Purchase Contracts, it would be in the interest of
Unitholders to pay cash for the Depositary Shares and retain the Preferred
Securities, and that in such case a market would develop for the Preferred
Securities so that a significant number of Unitholders would do so.
The question of whether a security is debt or equity for Federal income tax
purposes is inherently factual, and there is no authority concerning the tax
characterization of securities having terms similar to the Subordinated Debt
Securities. Nevertheless, based on the accuracy of the foregoing and on our
analysis of the law and the facts, in our opinion, under current law, for
Federal income tax purposes the Subordinated Debt Securities will be classified
as indebtedness of the Company. Moreover, in our opinion, and without regard to
the numbered factual statements above, the Trust will be classified as a grantor
trust for Federal income tax purposes and not as a partnership or an association
taxable as a corporation. Accordingly, each holder of a Preferred Security will
be considered the owner of an undivided interest in the Subordinated Debt
Securities and will take into account a pro rata share of all items of income,
expense or deduction of the Trust.
We express no opinion as to the possible effects on the foregoing opinions
of future changes in the law, which may be retroactive, including changes
proposed by the Clinton Administration on March 20, 1996. We assume no
obligation to modify or update this opinion to reflect future changes in the
law.
Based on the foregoing, and subject to the assumptions, qualifications and
limitations contained herein, we hereby confirm that the statements set forth in
the form of Prospectus included in the Registration Statement under the heading
'UNITED STATES FEDERAL INCOME TAXATION' accurately describe under current law
the material United States Federal income tax consequences of the purchase,
ownership and disposition of Units, Subordinated Debt Securities, Preferred
Securities, Purchase Contracts, Series F Preferred Stock and Depositary Shares
to holders who purchase Units upon their original issuance for an amount equal
to the Stated Amount of the Preferred Securities and who hold such securities as
capital assets.
We know that we are referred to under the heading 'LEGAL OPINIONS' in the
form of Prospectus included in the Registration Statement, and we hereby consent
to the use of our name therein and to the filing of this opinion as Exhibit 8 to
the Registration Statement.
Very truly yours,
/s/ Cravath, Swaine & Moore
Salomon Inc
Seven World Trade Center
New York, NY 10048
2
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
SALOMON INC.
FORM S-3 REGISTRATION STATEMENT
File No. 333-02897
SI Financing Trust I
Preferred Securities
and Salomon Inc Purchase Contracts
As independent public accountants, we hereby consent to the incorporation by
reference in the above mentioned Registration Statement 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 the
above mentioned Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
New York, New York
April 26, 1996
<PAGE>
POWER OF ATTORNEY
WHEREAS, Salomon Inc proposes to file with the
Securities and Exchange Commission, under the Securities Act of
1933, a Registration Statement to register securities, including,
without limitation, debt securities, preferred stock, preferred
stock purchase contracts, depositary shares, a guarantee and
trust issued preferred securities.
NOW, THEREFORE, I, in my capacity as a director of
Salomon Inc hereby appoint Richard J. Carbone and Arnold S.
Olshin and each of them severally, my true and lawful attorney or
attorneys with power to act with or without the other and with
full power of substitution and resubstitution, to execute in my
name, place and stead, in my capacity as a director of Salomon
Inc, said Registration Statement and any amendments thereto and
all instruments necessary or incidental in connection therewith,
and to file same with the Securities and Exchange Commission, all
as fully to all intents and purposes as I might or could do in
person, and I hereby ratify and approve the acts of said
attorneys and each of them.
IN WITNESS THEREOF, I have executed this instrument
this [ ] day of [ ], 1996.
/s/
-------------------------------
- -----------------------------------------------------------------------------
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___________
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
Bankers Trust Company
Legal Department
130 Liberty Street, 31st Floor
New York, New York 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
_________________________________
SALOMON INC.
(Exact name of obligor as specified in the charter)
DELAWARE 22-1660266
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) Identification no.)
Seven World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
------------------------------
SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
- ------------------------------------------------------------------------------
<PAGE>
-2-
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
Item 3. -15. Not Applicable
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7, 1990
and Certificate of Amendment of the
Organization Certificate of Bankers Trust
Company dated June 21, 1995 - Incorporated
herein by reference to Exhibit 1 filed with
Form T-1 Statement, Registration No.
33-65171.
Exhibit 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form
T-1 Statement, Registration No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company, dated
as amended on October 19, 1995. - Incorporated
herein by reference to Exhibit 4 filed with
Form T-1 Statement, Registration No. 33-65171.
<PAGE>
-3-
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of March 31, 1996.
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 20th day
of June 1996.
BANKERS TRUST COMPANY
By: /s/ Terence Rawlins
--------------------
Terence Rawlins
Assistant Treasurer
<PAGE>
Legal Title of Bank: Bankers Trust Company
Address: 130 Liberty Street
City, State ZIP: New York, NY 10006
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
Call Date: 3/31/96 ST-BK: 36-4840 FFIEC 031
Vendor ID: D CERT: 00623 Page RC-1
11
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks March 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
-----------
| C400 |
-----------------------------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
-----------------------------------------
<S> <C> <C> <C>
ASSETS | |
1. Cash and balances due from depository institutions (from Schedule RC-A): | |
a. Noninterest-bearing balances and currency and coin(1) .............. | 0081 1,145,000 |1.a.
b. Interest-bearing balances(2) ....................................... | 0071 1,403,000 |1.b.
2. Securities: | |
a. Held-to-maturity securities (from Schedule RC-B, column A) ......... | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)........ | 1773 3,535,000 |2.b.
3 Federal funds sold and securities purchased under agreements to resell | |
in domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs: | |
a. Federal funds sold .................................................. | 0276 3,190,000 |3.a.
b. Securities purchased under agreements to resell ..................... | 0277 2,242,000 |3.b.
4. Loans and lease financing receivables: | |
a. Loans and leases, net of unearned income | |
(from Schedule RC-C) RCFD 2122 24,678,000 | |4.a.
b. LESS: Allowance for loan and lease losses..RCFD 3123 938,000 | |4.b.
c. LESS: Allocated transfer risk reserve .....RCFD 3128 0 | |4.c.
d. Loans and leases, net of unearned income, | |
allowance, and reserve (item 4.a minus 4.b and 4.c) ................. | 2125 23,740,000 |4.d.
5. Assets held in trading accounts ........................................... | 3545 32,261,000 |5.
6. Premises and fixed assets (including capitalized leases) .................. | 2145 857,000 |6.
7. Other real estate owned (from Schedule RC-M) .............................. | 2150 247,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies | |
(from Schedule RC-M) | 2130 253,000 |8.
9. Customers' liability to this bank on acceptances outstanding .............. | 2155 402,000 |9.
10. Intangible assets (from Schedule RC-M) .................................... | 2143 12,000 |10.
11. Other assets (from Schedule RC-F) ......................................... | 2160 11,579,000 |11.
12. Total assets (sum of items 1 through 11) .................................. | 2170 80,866,000 |12.
-----------------------------------------
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Legal Title of Bank: Bankers Trust Company
Address: 130 Liberty Street
City, State Zip: New York, NY 10006
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
Call Date: 3/31/96 ST-BK: 36-4840 FFIEC 031
Vendor ID: D CERT: 00623 Page RC-2
12
Schedule RC--Continued
<TABLE>
<CAPTION>
-----------------------------------------
Dollar Amounts in Thousands | Bil Mil Thou |
-----------------------------------------
<S> <C> <C> <C>
LIABILITIES | |
13. Deposits: | |
a. In domestic offices (sum of totals of columns A and C from | |
Schedule RC-E, part I) | RCON 2200 7,327,000 |13.a.
(1) Noninterest-bearing(1) ..................... RCON 6631 2,132,000 | |13.a.(1)
(2) Interest-bearing ............................ RCON 6636 5,195,000 | |13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs | |
(from Schedule RC-E part II) ..................................... | RCFN 2200 18,575,000 |13.b.
(1) Noninterest-bearing ........................ RCFN 6631 552,000 | |13.b.(1)
(2) Interest-bearing ........................... RCFN 6636 18,023,000 | |13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase | |
in domestic offices of the bank and of its Edge and Agreement | |
subsidiaries, and in IBFs: | |
a. Federal funds purchased ............................................ | RCFD 0278 2,324,000 |14.a.
b. Securities sold under agreements to repurchase ..................... | RCFD 0279 651,000 |14.b.
15. a. Demand notes issued to the U.S. Treasury ........................... | RCON 2840 0 |15.a.
b. Trading liabilities ................................................ | RCFD 3548 18,807,000 |15.b.
16. Other borrowed money: | |
a. With original maturity of one year or less ......................... | RCFD 2332 13,784,000 |16.a.
b. With original maturity of more than one year ....................... | RCFD 2333 3,462,000 |16.b.
17. Mortgage indebtedness and obligations under capitalized leases ............ | RCFD 2910 34,000 |17.
18. Bank's liability on acceptances executed and outstanding .................. | RCFD 2920 415,000 |18.
19. Subordinated notes and debentures ......................................... | RCFD 3200 1,227,000 |19.
20. Other liabilities (from Schedule RC-G) .................................... | RCFD 2930 9,724,000 |20.
21. Total liabilities (sum of items 13 through 20) ............................ | RCFD 2948 76,330,000 |21.
| |
22. Limited-life preferred stock and related surplus .......................... | RCFD 3282 0 |22.
EQUITY CAPITAL | |
23. Perpetual preferred stock and related surplus ............................. | RCFD 3838 500,000 |23.
24. Common stock .............................................................. | RCFD 3230 1,002,000 |24.
25. Surplus (exclude all surplus related to preferred stock) .................. | RCFD 3839 528,000 |25.
26. a. Undivided profits and capital reserves ............................... | RCFD 3632 2,879,000 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale | |
securities ......................................................... | RCFD 8434 ( 8,000) |26.b.
27. Cumulative foreign currency translation adjustments ....................... | RCFD 3284 ( 365,000) |27.
28. Total equity capital (sum of items 23 through 27) ......................... | RCFD 3210 4,536,000 |28.
29. Total liabilities, limited-life preferred stock, and equity capital | |
(sum of items 21, 22, and 28) ........................................... | RCFD 3300 80,866,000 |29.
-----------------------------------------
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external Number
auditors as of any date during 1994 ....... RCFD 6724 2
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards by a
certified public accounting firm (may be required by state
chartering authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
<PAGE>
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
Salomon Inc
(Exact name of obligor as specified in its charter)
Delaware 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
Seven World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
SI Financing Trust I
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
Seven World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
-------------------------------------------
TRUST SECURITIES
(Title of the indenture securities)
---------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-46892, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 21st day of June, 1996.
CHEMICAL BANK
By /s/F. J. Grippo
------------------------------
F. J. Grippo
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................................. $ 3,391
Interest-bearing balances .......................................................... 2,075
Securities: ............................................................................
Held to maturity securities.............................................................. 3,607
Available for sale securities............................................................ 29,029
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................................................. 1,264
Securities purchased under agreements to resell .................................... 354
Loans and lease financing receivables:
Loans and leases, net of unearned income $73,216
Less: Allowance for loan and lease losses 1,854
Less: Allocated transfer risk reserve ......... 104
------
Loans and leases, net of unearned income,
allowance, and reserve ............................................................. 71,258
Trading Assets .......................................................................... 25,919
Premises and fixed assets (including capitalized leases)................................. 1,337
Other real estate owned ................................................................. 30
Investments in unconsolidated subsidiaries and
associated companies................................................................ 187
Customer's liability to this bank on acceptances
outstanding ........................................................................ 1,082
Intangible assets ....................................................................... 419
Other assets ............................................................................ 7,406
-----
TOTAL ASSETS ............................................................................ $147,358
=========
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................................ $45,786
Noninterest-bearing ..................................... $14,972
Interest-bearing .............................................. 30,814
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .......................................................................... 36,550
Noninterest-bearing ............................... $ 202
Interest-bearing .............................................. 36,348
------
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ........................................................... 11,412
Securities sold under agreements to repurchase .................................... 2,444
Demand notes issued to the U.S. Treasury ............................................... 699
Trading liabilities .................................................................... 19,998
Other Borrowed money:
With a remaining maturity of one year or less ..................................... 11,305
With a remaining maturity of more than one year.................................... 130
Mortgage indebtedness and obligations under capitalized
leases ............................................................................ 13
Bank's liability on acceptances executed and outstanding 1,089
Subordinated notes and debentures ...................................................... 3,411
Other liabilities ...................................................................... 6,778
TOTAL LIABILITIES ...................................................................... 139,615
--------
EQUITY CAPITAL
Common stock ........................................................................... 620
Surplus ................................................................................ 4,664
Undivided profits and capital reserves ................................................. 3,058
Net unrealized holding gains (Losses)
on available-for-sale securities ....................................................... (607)
Cumulative foreign currency translation adjustments .................................... 8
TOTAL EQUITY CAPITAL .................................................................... 7,743
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .......................................................... $147,358
==========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is
true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
<PAGE>
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
Salomon Inc
(Exact name of obligor as specified in its charter)
Delaware 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
Seven World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
SI Financing Trust I
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
Seven World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
-------------------------------------------
GUARANTEE OF PREFERRED SECURITIES
(Title of the indenture securities)
---------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-46892, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 21st day of June, 1996.
CHEMICAL BANK
By /s/ F.J. Grippo
------------------------------
F. J. Grippo
Vice President
- 3 -
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................. $ 3,391
Interest-bearing balances .......................................... 2,075
Securities: ............................................................
Held to maturity securities.............................................. 3,607
Available for sale securities............................................ 29,029
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .................................................. 1,264
Securities purchased under agreements to resell ..................... 354
Loans and lease financing receivables:
Loans and leases, net of unearned income $73,216
Less: Allowance for loan and lease losses 1,854
Less: Allocated transfer risk reserve .... 104
------
Loans and leases, net of unearned income,
allowance, and reserve .............................................. 71,258
Trading Assets ........................................................... 25,919
Premises and fixed assets (including capitalized leases).................. 1,337
Other real estate owned .................................................. 30
Investments in unconsolidated subsidiaries and
associated companies................................................. 187
Customer's liability to this bank on acceptances
outstanding ......................................................... 1,082
Intangible assets ........................................................ 419
Other assets ............................................................. 7,406
-----
TOTAL ASSETS ............................................................. $147,358
=========
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits
In domestic offices ................................................ $45,786
Noninterest-bearing ........................................... $14,972
Interest-bearing .............................................. 30,814
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .......................................................... 36,550
Noninterest-bearing ........................................... $ 202
Interest-bearing .............................................. 36,348
-------
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ............................................ 11,412
Securities sold under agreements to repurchase ..................... 2,444
Demand notes issued to the U.S. Treasury ................................ 699
Trading liabilities ..................................................... 19,998
Other Borrowed money:
With a remaining maturity of one year or less ........................... 11,305
With a remaining maturity of more than one year ......................... 130
Mortgage indebtedness and obligations under capitalized
leases ............................................................. 13
Bank's liability on acceptances executed and outstanding 1,089
Subordinated notes and debentures ....................................... 3,411
Other liabilities ........................................................ 6,778
TOTAL LIABILITIES ....................................................... 139,615
--------
EQUITY CAPITAL
Common stock ............................................................ 620
Surplus ................................................................. 4,664
Undivided profits and capital reserves .................................. 3,058
Net unrealized holding gains (Losses)
on available-for-sale securities ........................................ (607)
Cumulative foreign currency translation adjustments ..................... 8
TOTAL EQUITY CAPITAL .................................................... 7,743
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ........................................... $147,358
==========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
