Pricing Supplement No Euro D208 Dated 6/30/97 Rule 424(b)(3)
(To Prospectus dated April 5, 1996 and File No. 333-01807
Prospectus Supplement dated April 5, 1996)
This Pricing Supplement consists of 20 page(s)
SALOMON INC
Medium-Term Notes, Series D
(Bearer Notes)
Due More Than Nine Months from Date of Issue
Principal Amount or Face Amount: 1,000,000,000 Portugese Escudos(PTE)
Issue Price: 100.00%
Proceeds to Company on original issuance: PTE 1,000,000,000
Commission or Discount on original issuance: USD 12,250
Salomon Brothers International Limited's capacity on original issuance:
| | As agent |X| As principal
If as principal
|X| The Bearer Notes are being offered at varying prices related
to prevailing market prices at the time of resale.
| | The Bearer Notes are being offered at a fixed initial public
offering price of % of Principal Amount or Face Amount.
Original Issue Date: 7/1/97
Stated Maturity: 7/11/2000
Specified Currency: PTE
(If other than U.S. Dollars)
Authorized Denominations: PTE 1,000,000
(If other than as set forth in the Prospectus Supplement)
Interest Payment Dates:
Accrue to Pay: | | Yes |X| No
Indexed Principal Note: |X| Yes (See Attached) | | No
Type of Interest on Note: | | Fixed Rate | | Floating Rate | | Indexed Rate
(See Attached)
Interest Rate (Fixed Rate Notes): None, See attached.
Initial Interest Rate (Floating Rate Notes): N.A.
Base Rate: | | CD Rate | | Commercial Paper Rate | | Federal Funds Rate
| | LIBOR Telerate | | LIBOR Reuters | | Treasury Rate
| | Treasury Rate Constant Maturity | | Other (See Attached)
Calculation Agent (If other than Citibank): | | Salomon Brothers
|X| Other (See Attached)
Computation of Interest: | | 30 over 360 | | Actual over Actual
| | Actual over 360 | | Other (See Attached)
(If other than as set forth in the Prospectus Supplement)
Interest Reset Dates: N.A.
Rate Determination Dates: N.A.
(If other than as set forth in the Prospectus Supplement)
Index Maturity: N.A.
Spread (+/-): N.A.
Spread Multiplier: N.A.
Change in Spread, Spread Multiplier or Fixed Interest Rate prior to
Stated Maturity: | | Yes (See Attached) |X| No
Maximum Interest Rate: N.A.
Minimimum Interest Rate: N.A.
Amortizing Note: | | Yes (See Attached) |X| No
Optional Redemption: | | Yes |X| No
Optional Redemption Dates:
Redemption Prices:
Redemption: | | In whole only and not in part | | May be in whole or in part
Optional Repayment: | | Yes |X| No
Optional Repayment Dates:
Optional Repayment Prices:
Discount Note: | | Yes |X| No
Total Amount of OID:
Yield to Maturity:
Listed on Luxembourg Stock Exchange: | | Yes |X| No
Common Code: 7794142
ISIN: XS0077941424
Cusip: 99308E9M4
Pricing Supplement No. Euro D 208 dated June 30, 1997
(to Prospectus Supplement dated April 5, 1996
to Prospectus dated April 5, 1996)
DESCRIPTION OF THE NOTES
General
The description in this Pricing Supplement of the
particular terms of the Bearer Notes offered hereby (the "Notes")
supplements, and to the extent inconsistent therewith replaces,
the descriptions of the general terms and provisions of the
Bearer Notes set forth in the accompanying Prospectus and
Prospectus Supplement, to which descriptions reference is hereby
made. The Notes offered hereby are Indexed Principal Notes, as
described under "Description of Bearer Notes" in the accompanying
Prospectus Supplement, to which description reference is hereby
made.
Risk Factors
THE NOTES DO NOT BEAR PERIODIC PAYMENTS OF INTEREST.
The Notes are Indexed Principal Notes. The amount in
respect of principal with respect to a Note that a Holder will
receive at Stated Maturity will be at least the face amount of
such Note. However, any such amount in excess of such face amount
that may be payable in respect of principal will determined by
reference to changes in the value of the FT-SE(R) Eurotrack 200
Index during the period between July 26, 1997 and June 26, 2000,
as described below under "Indexed Principal". As described more
fully below under "Indexed Principal", if the amount by which the
arithmetic average of published closing prices of the FT-SE(R)
Eurotrack 200 Index on the twenty-sixth day of each calendar
month during the period between July 1997 and June 2000 exceeds
an initial reference level determined by the Calculation Agent
for such index based upon the closing value of such index on June
26, 1997, the amount in respect of principal payable with respect
to a Note at Stated Maturity will be greater than face amount of
such Note. If this condition is not satisfied, the amount in
respect of principal payable with respect to a Note at Stated
Maturity will be equal to the face amount of such Note. HOLDERS
OF THE NOTES SHOULD BE PREPARED NOT TO RECEIVE MORE THAN THE FACE
AMOUNT OF A NOTE IN RESPECT OF PRINCIPAL ON SUCH NOTE.
Definitions
"Business Day" means any day, other than a Saturday or a
Sunday, that is not a day on which banking institutions are
authorized or required by law or regulation to be closed in (i)
New York, New York, (ii) London, England, or (iii) Lisbon,
Portugal.
The Calculation Agent will be Salomon Brothers
International Limited, which is a wholly-owned subsidiary of
Salomon Inc (the "Company").
<PAGE>
Interest
THE NOTES DO NOT BEAR PERIODIC PAYMENTS OF INTEREST.
Indexed Principal
The amount payable in respect of principal on a Note at
Stated Maturity (the "Indexed Principal Amount") is to be
determined by the Calculation Agent in accordance with the
formula set out below:
IPA = FA plus [FA times [1.75 times the greater of
(a) [(EA divided by Eo) minus 1];and (b) 0]; where
"IPA" means the Indexed Principal Amount payable in
respect of the Note at Stated Maturity.
"FA" means the Face Amount of the Note (as stated on
the cover of this Pricing Supplement).
EA means the arithmetic average, as determined by the
Calculation Agent, of the Official Index Closing Prices of the
FT-SE(R) Eurotrack 200 Index, as published by FTSE International
Limited ("FTSE"), on the 26th day of each calendar month from and
including July 1997 through and including June 2000 (or, if any
such date is not a Business Day, the next succeeding Business
Day).
E0 means the Official Index Closing Price of the
FT-SE(R) Eurotrack 200 Index, as published by FTSE, on June 26,
1997.
If FTSE discontinues publication of the FT-SE(R) Eurotrack
200 Index and publishes a successor or substitute index that the
Company determines, in its sole discretion, to be comparable to
the FT-SE(R) Eurotrack 200 Index (any such successor or
substitute index being hereinafter referred to as a "Successor
Eurotrack 200 Index"), then the Indexed Interest Amount of the
Notes shall be determined by the Calculation Agent, on behalf of
the Company, based on such Successor Eurotrack 200 Index. In the
event that the FT-SE(R) Eurotrack 200 Index or any Successor
Eurotrack 200 Index ceases publication, the Calculation Agent, in
its sole discretion, on behalf of the Company shall calculate the
Indexed Interest Amount based on the formula and method used in
calculating the FT-SE(R) Eurotrack 200 Index as of the Issue Date
of the Notes using the closing values of appropriate securities
traded on the London Stock Exchange, SEAQ and SEAQ International,
chosen in its discretion.
Neither the Calculation Agent nor the Company will have any
responsibility for errors or omissions in making such
calculations or determinations. The Calculation Agent shall not
be an agent of the Holders of Notes, and its calculations and
determinations hereunder shall (except in the case of manifest
error) be final and binding on the Company and such Holders. The
Company shall not bear any liability for any mistake,
misstatement or misquotation of the FT-SE(R) Eurotrack 200 Index
or any Successor Eurotrack 200 Index by FTSE or any other
publisher thereof.
2
<PAGE>
Payment Date
The Stated Maturity of the Notes is July 11, 2000. If
Stated Maturity would otherwise be a day that is not a Business
Day, Stated Maturity shall be postponed to the next succeeding
Business Day, except that, if such Business Day is in the next
succeeding calendar month, Stated Maturity shall be the
immediately preceding Business Day.
DESCRIPTION OF FT-SE(R) EUROTRACK 200 INDEX
Unless otherwise stated, all information herein relating to
the FT-SE(R) Eurotrack 200 Index, the FT-SE(R) 100 Share Index
and the FT-SE(R) Eurotrack 100 Index and has been derived from
publications of FTSE, the London Stock Exchange Limited (the
"Exchange") and other publicly-available sources. Such
information reflects the policies of FTSE and the Exchange and is
subject to change at the discretion of FTSE or the Exchange.
The FT-SE(R) Eurotrack 200 Index is a stock index
regulated, supervised and distributed by the Exchange that
measures the composite price performance of 200 European stocks.
The FT-SE(R) Eurotrack 200 Index combines in a single index the
stocks of 100 United Kingdom issuers comprising the FT-SE(R) 100
Share Index and the stocks of 100 non-United Kingdom issuers
comprising the FT-SE(R) Eurotrack 100 Index, each of which is
described below. (See Appendix A hereto for a list of the 200
issuers of the underlying stocks of the FT-SE(R) Eurotrack 200
Index as of June 26, 1997.) The qualifications for inclusion of
securities in the FT-SE(R) Eurotrack 200 Index, insertions and
deletions of underlying stocks, operational changes to the
underlying stocks and adjustments to the capitalization weighting
of the underlying stocks are governed by the procedures
established with respect to the FT-SE(R) 100 Share Index and the
FT-SE(R) Eurotrack 100 Index. The FT-SE(R) Eurotrack 200 Index
was first published in February 1991 (with a base date of
February 25, 1991) and is reported by the Financial Times and
other media.
The value of the FT-SE(R) Eurotrack 200 Index is calculated
at any particular time by combining the products of the
respective changes in the market capitalization of the underlying
stocks of the FT-SE(R) Eurotrack 100 Index and the FT-SE(R) 100
Share Index during a prescribed time period and multiplying the
result by a base value. In performing this calculation, the
underlying stocks of the FT-SE(R) Eurotrack 100 are given the
weightings used in the calculation of such index and the
underlying stocks of the FT-SE(R) 100 Share Index are weighted
using a "Weighting Restraint Factor" calculated so as to assign
to the underlying stocks in the FT-SE(R) 100 Share Index a weight
corresponding to the market capitalization of United Kingdom
stocks listed on the Exchange to all other European stocks with
firm quotes on SEAQ or SEAQ International. The FT-SE(R) Eurotrack
200 Index currently is updated every minute between 10:00 A.M.
and 3:30 P.M., London time, with the Official Index Closing Price
normally set at 3:30 P.M., London time.
On June 27, 1997, the Weighting Restraint Factor was
0.72831. The Weighting Restraint Factor is subject to the regular
quarterly review by the Index Administration
3
<PAGE>
Committee. Based upon the Index Administration Committee's
report, the FT-SE(R) Eurotrack 200 Index Steering Sub-Committee
determines what action should be taken in consequence of the
outcome of the quarterly review of weightings. The Index
Administration Committee may, under exceptional circumstances,
carry out a review of the Weighting Restraint Factor between
quarterly reviews and report the outcome of the review to the
FT-SE(R) Eurotrack 200 Index Steering Sub-Committee.
FT-SE(R) 100 Share Index
The FT-SE(R) 100 Share Index is a stock index regulated and
supervised by the Exchange and published, operated and
distributed by FTSE that is intended to measure the composite
price performance of the underlying stocks, which generally
consist of the stocks of the largest 100 United Kingdom companies
(determined on the basis of market capitalization) traded on the
Exchange. A company's market capitalization is calculated by
multiplying the number of shares outstanding by the company's
current share price. The FT-SE(R) 100 Share Index was first
published on March 3, 1984 (with a base date of December 30,
1983) and is widely reported by newspapers (including The Wall
Street Journal and the Financial Times) and other media. The
underlying stocks represent a broad cross-section of United
Kingdom industry and are among the most actively traded stocks on
the Exchange.
The value of the FT-SE(R) 100 Share Index is calculated at
any particular time by multiplying the change in the market
capitalization of the underlying stocks during a prescribed time
period by a base value. The FT-SE(R) 100 Share Index currently is
updated every minute between 8:30 A.M. and 4:30 P.M., London
time.
The FT-SE(R) 100 Share Index is a capital-weighted index
(i.e., an underlying stock's weight in the index is based on the
total market capitalization of the issuer, rather than on its
price per share). Accordingly, a 5 percent price change in the
first ranked underlying stock has a greater effect on the
FT-SE(R) 100 Share Index than a 5 percent price change in the
100th ranked underlying stock. The base value of the index is
recalculated to compensate for replacements of the underlying
stocks or changes in the outstanding share capital of their
issuers that result, for example, from rights issues or new stock
issuances.
Each calendar quarter, the FTSE Actuaries UK Indicies
Committee undertakes a review of the underlying stocks and
determines whether it is necessary to add or delete securities
from the FT-SE(R) 100 Share Index based on the current market
capitalization of their issuers. To maintain continuity, however,
an underlying stock will only be deleted if (i) the market
capitalization of the issuer of such stock has fallen to 111th
place or below, or (ii) the market capitalization of the issuer
of such stock has fallen to below 101st place, but above 111th
place, in which case such stock shall be deleted only if it is
necessary to create a place in the index for the stock of an
issuer that is not included in the index at such time but whose
market capitalization has risen to 90th place or better. A new
underlying stock will be added if (i) the market capitalization
of the issuer of such stock has risen to 90th place or better or
(ii) it is necessary to replace the stock of an issuer whose
market capitalization has fallen to 111th place or below, in
which case stocks of issuers not included in the index at such
time will be added as
4
<PAGE>
necessary in the order of their market capitalization, up to the
issuer then in 91st place. The six highest placed stocks not
included in the index comprise a replacement list to be used in
the event that one or more underlying stocks may be deleted from
the index during the period between quarterly reviews. Such a
deletion will result upon the delisting of an underlying stock,
and may result upon a merger or takeover of its issuer or a
suspension of trading in such stock. A new issue may be added to
the index if, in the view of the FTSE Actuaries UK Indicies
Committee, such new issue is so large that the effectiveness of
the index as a market indicator would be significantly and
adversely affected by its omission. In such a case, the
underlying stock of the issuer with the lowest market
capitalization would generally be removed, though the timing of
the inclusion of any such new issue and the decision as to which
underlying stock it shall replace are at the discretion of the
FTSE Actuaries UK Indicies Committee.
The performance of the FT-SE(R) 100 Share Index varies
somewhat from other stock indices, such as the Financial Times
All-Share Index published by The Financial Times Limited (the
"FTL"), that measure the performance of a greater number of
stocks listed on the Exchange. Such performance differences
reflect a number of complex factors including, among other
things, the relatively greater volatility of the stocks of
smaller companies that are not included among the underlying
stocks and the greater sensitivity of the FT-SE(R) 100 Share
Index to the performance of industries, such as the petroleum
industry, that tend to be represented by larger companies.
FT-SE(R) Eurotrack 100 Index
The FT-SE(R) Eurotrack 100 Index is a stock index regulated
and supervised by the Exchange and published, operated and
distributed by FTSE that is intended to measure the composite
price performance of the underlying stocks, which generally
consist of the stocks of the largest companies (determined on the
basis of market capitalization) in each of the European countries
included in the index for which firm quotes exist on SEAQ or SEAQ
International. Stocks of United Kingdom issuers are not included.
The market capitalization of the issuer of any underlying stock
must represent at least 0.125% of the market capitalization of
all European issuers with firm quotes on SEAQ or SEAQ
International. The number of issuers from each eligible European
country to be included among the 100 issuers of the underlying
stocks is determined so as to have a high correlation with and
track closely the major benchmark indices for Continental Europe,
particularly the FT-AWI Europe excluding-UK Index. A company's
market capitalization is calculated by multiplying the number of
shares outstanding by the company's current firm quote price on
SEAQ or SEAQ International. The FT-SE(R) Eurotrack 100 Index was
first published in November 1990 (with a base date of October 29,
1990) and is reported by the Financial Times and other media.
The value of the FT-SE(R) Eurotrack 100 Index is calculated
at any particular time by multiplying the change in the market
capitalization of the underlying stocks during a prescribed time
period by a base value. The FT-SE(R) Eurotrack 100 Index
currently is updated every minute between 10:00 A.M. and 3:30
P.M., London time, with the Official Index Closing Price normally
set at 3:30 P.M., London time.
5
<PAGE>
The FT-SE(R) Eurotrack 100 Index is a capital-weighted index
(i.e., an underlying stock's weight in the index is based on the
total market capitalization of the issuer, rather than on its
price per share). Accordingly, a 5 percent price change in the
first ranked underlying stock has a greater effect on the
FT-SE(R) Eurotrack 100 Index than a 5 percent price change in the
100th ranked underlying stock. The base value of the index is
recalculated to compensate for replacements of the underlying
stocks or changes in the outstanding share capital of their
issuers that result, for example, from rights issues or new stock
issuances.
Each calendar quarter, an Index Administration Committee of
the Exchange undertakes a review of the underlying stocks and
reports to the Index Steering Committee, which then determines
whether it is necessary to add or delete securities from the
FT-SE(R) Eurotrack 100 Index based on the current market
capitalization of their issuers. To maintain continuity, however,
an underlying stock will only be deleted if (i) the market
capitalization of the issuer of such stock has fallen to 111th
place or below, or (ii) the market capitalization of the issuer
of such stock has fallen to below 101st place, but above 111th
place, in which case such stock shall be deleted only if it is
necessary to create a place in the index for the stock of an
issuer that is not included in the index at such time but whose
market capitalization has risen to 90th place or better. A new
underlying stock will be added if (i) the market capitalization
of the issuer of such stock has risen to 90th place or better or
(ii) it is necessary to replace the stock of an issuer whose
market capitalization has fallen to 111th place or below, in
which case stocks of issuers not included in the index at such
time will be added as necessary in the order of their market
capitalization, up to the issuer then in 91st place. The highest
placed stocks not included in the index comprise a replacement
list to be used in the event that one or more underlying stocks
may be deleted from the index during the period between quarterly
reviews. Such a deletion will result upon the quote of an
underlying stock on SEAQ or SEAQ International becoming
indicative rather than firm, and may result upon a merger or
takeover of its issuer or a suspension of trading in such stock.
A stock having obtained a firm quote on SEAQ or SEAQ
International for the first time may be added to the index if the
market capitalization of the issuer of such stock represents 1.5%
or more of the index's aggregate market capitalization at such
time. In such a case, the underlying stock of the issuer with the
lowest market capitalization would generally be removed, though
the timing of the inclusion of any such new issue and the
decision as to which underlying stock it shall replace are at the
discretion of the Index Screening Committee.
FTSE is under no obligation to continue the calculation and
dissemination of the FT-SE(R) Eurotrack 200 Index, the FT-SE(R)
Eurotrack 100 Index or the FT-SE(R) 100 Share Index. The Notes
are not in any way sponsored, endorsed, sold or promoted by FTSE
or by the London Stock Exchange Limited (the "Exchange") or by
the Financial Times Ltd. (the "FTL") and neither FTSE nor the
Exchange nor the FTL makes any warranty or representation
whatsoever, expressly or impliedly, either as to the results to
be obtained from the use of the FT-SE(R) Eurotrack 200 Index
and/or the figure at which the FT-SE(R) Eurotrack 200 Index
stands on any particular day or otherwise. The FT-SE(R) Eurotrack
200 Index is compiled and calculated solely by FTSE. However,
neither FTSE nor the Exchange nor the FTL shall be liable
(whether in negligence or otherwise)
6
<PAGE>
to any person for any error in the FT-SE(R) Eurotrack 200 Index
and neither FTSE nor the Exchange nor the FTL shall be under any
obligation to advise any person, including a purchaser or vendor
of any of the Notes, of any error therein. FTSE has no obligation
to take the needs of the Company or holders of the Notes into
consideration in determining, composing or calculating the
FT-SE(R) Eurotrack 200 Index. FTSE is not responsible for, and
has not participated in the determination of the timing of,
prices for, or quantities of, the Notes to be issued or in the
determination or calculation of the equation by which the Indexed
Interest Amount or any other amount payable with respect to the
Notes is set. FTSE has no obligation or liability in connection
with the administration, marketing or trading of the Notes.
"FTSE(R)" is a registered trade mark of The London Stock
Exchange Limited and the Financial Times Limited and are used by
FTSE International Limited under license.
None of the Company, the Calculation Agent, the Trustee
under the Senior Debt Indenture or the Agent accepts any
responsibility for the calculation, maintenance or publication of
the FT-SE(R) Eurotrack 200 Index or any Successor Eurotrack 200
Index. FTSE disclaims all responsibility for any errors or
omissions in the calculation and dissemination of the FT-SE(R)
Eurotrack 200 Index or the manner in which such index is applied
in determining any Indexed Interest Amount or any other amount
payable with respect to the Notes.
Historical Data on FT-SE(R) Eurotrack 200
The International Stock Exchange first calculated and
published the FT-SE(R) Eurotrack 200 Index in February 1991. The
following table sets forth the highest and lowest daily closing
level of the period from March 31, 1992 through June 26, 1997, as
well as the closing level of the FT-SE(R) Eurotrack 200 Index as
of the end of each such quarter or partial quarter. The
historical values of the FT-SE(R) Eurotrack 200 Index should not
be taken as an indication of future performance.
7
<PAGE>
Daily Closing Levels
--------------------------------
Highest Lowest Period
Level Level End
------- ------ ------
1992:
2nd Quarter 1248.79 1141.32 1169.77
3rd Quarter 1161.24 1029.56 1079.39
4th Quarter 1169.11 1010.09 1169.11
1993:
1st Quarter 1232.53 1144.79 1220.16
2nd Quarter 1266.14 1200.34 1266.14
3rd Quarter 1396.45 1257.80 1362.51
4th Quarter 1552.09 1368.19 1546.84
1994:
1st Quarter 1607.10 1440.06 1440.06
2nd Quarter 1500.59 1342.95 1352.98
3rd Quarter 1460.56 1251.88 1359.89
4th Quarter 1421.32 1335.96 1390.02
1995:
1st Quarter 1406.41 1314.73 1362.27
2nd Quarter 1466.70 1360.10 1431.81
3rd Quarter 1565.52 1456.65 1513.66
4th Quarter 1602.58 1479.98 1600.63
1996:
1st Quarter 1685.18 1584.49 1679.78
2nd Quarter 1740.61 1685.33 1726.44
3rd Quarter 1778.07 1643.51 1778.07
4th Quarter 1972.61 1790.49 1971.66
1997:
1st Quarter 2259.04 1941.48 2200.58
2nd Quarter (through June 25) 2495.81 2130.95 2495.81
The closing level of the FT-SE(R) Eurotrack 200 Index on
June 26, 1997 was 2515.63.
Since its inception, the FT-SE(R) Eurotrack 200 Index has
experienced significant daily price fluctuations. Any historical
upward or downward trend in the closing level of
the FT-SE(R) Eurotrack 200 Index during any period set forth
above is not any indication that the FT-SE(R) Eurotrack 200 Index
is more or less likely to increase or decline at any time during
the term of the Notes.
The London Stock Exchange; SEAQ and SEAQ International
The Exchange is the largest established securities market
in the United Kingdom and one of the world's largest securities
exchanges in terms of market capitalization. Trading on the
Exchange takes place in quantity of shares, rather than in round
lots.
8
<PAGE>
The rules of the Exchange currently place no limits on daily
permissible price movements in the trading of listed securities.
SEAQ is the Exchange's electronic price information system, which
acts as an interface between market-makers and their customers.
Throughout the trading day, 30 registered market-makers are
obliged to display to the market their bid and offer prices and
the maximum bargain size to which these prices relate. All equity
prices displayed on SEAQ are firm. SEAQ International is the
electronic price information system of the Exchange's
International Equity Market, which is the largest market in the
world for the trading of non-domestic equities. At March 1, 1996,
SEAQ International displayed real-time prices in over 1,000
stocks from over 30 countries, with over 550 of these stocks
being quoted on a firm basis and the remainder having indicative
quotes. More than 50 market-makers enter bid and offer prices
directly onto a central computer system, which are then
distributed to potential investors through a number of commercial
vendors. Investors wishing to execute a trade contact the
appropriate market-maker in order to determine the terms of
settlement. Trading hours on the Exchange and SEAQ currently
begin at 8:30 A.M. and end at 4:30 P.M., London time. Trading on
SEAQ International can take place 24 hours a day, but quotations
may only be input into SEAQ International between 8:00 A.M. and
5:15 P.M., London time.
Due to the time zone difference between New York City and
London, on any normal trading day, trading on the underlying
stocks of the FT-SE(R) Eurotrack 200 Index on the Exchange, SEAQ
and SEAQ International will cease prior to the end of the trading
day in New York City. The Official Index Closing Price of the
FT-SE(R) Eurotrack 200 is generally issued at 3:30 P.M., London
time and will therefore generally be available in the United
States shortly after 10:30 A.M., New York City time. The time
zone difference between New York City and London may vary at
certain times of the year due to different beginning and ending
dates of Daylight Savings Time in New York City and the
comparable British Summer Time in London.
License Agreement
FTSE International Limited and the Company have entered
into a license agreement providing for a license, in exchange for
a fee, of certain trade and service marks with respect to indices
owned and published by FTSE in connection with the issuance of
the Notes. The use of and reference to the FT-SE(R) Eurotrack 200
Index in connection with the Notes have been consented to by
FTSE, the publisher of the FT-SE(R) Eurotrack 200 Index.
USE OF PROCEEDS
A portion of the proceeds received by the Company from the
sale of the Notes will be used by the Company or one or more of
its subsidiaries, in connection with hedging the Company's
obligations under the Notes, to purchase or acquire positions in
a variety of financial instruments relating to the FT-SE(R)
Eurotrack 200 Index and/or all or certain of its respective
underlying stocks.
9
<PAGE>
EUROPEAN MONETARY UNION
Stage III of the European Economic and Monetary Union
("Stage III") is presently scheduled to commence on January 1,
1999 for those member states of the European Union that satisfy
the economic convergence criteria set forth in the Treaty on
European Union, to which Portugal is a signatory. Stage III
includes the introduction of a single currency (the "Euro") which
will be legal tender in such member states. It is anticipated
that the European Union will adopt regulations or other
legislation providing specific rules for the introduction of the
Euro in substitution for the respective national currencies of
such member states, which regulations or legislation may be
supplemented by legislation of the individual member states. In
the event that Portugal adopts the Euro, the laws and regulations
of the European Union (and, if any, of Portugal) relating to the
Euro implemented pursuant to or by virtue of the Treaty on
European Union shall apply to the Notes and the Indenture, and,
except as provided in the following paragraph, the payment of
principal of, or interest on, the Notes at any time after the
official date of introduction of the Euro by Portugal shall be
effected in Euro in conformity with any such legally applicable
measures.
If, following the introduction of the Euro by Portugal, the
Company has the option, pursuant to legally applicable measures,
to make payments of principal of, or interest on, the Notes in
either Lire or Euro, the Company will make such payments in Lire
or Euro at its sole discretion. To the extent that the terms and
conditions of the Notes require the rounding up or down of
certain amounts or quotations expressed in Euro, such rounding
will be made to the smallest currency unit of the Euro.
The circumstances and consequences described in this
section and any resultant amendment to the terms and conditions
of the Notes will not entitle any Holder of the Notes (i) to any
legal remedy, including, without limitation, redemption,
rescission, notice, repudiation, adjustment or renegotiation of
the terms and conditions of the Notes or the Indenture, or (ii)
to raise any defense or make any claim (including, without
limitation, claims of breach, force majeure, frustration of
purpose or impracticability) or any other claim for compensation,
damages or any other relief, nor will any such events affect any
of the other obligations of the Company under the Notes and the
Indenture.
DESCRIPTION OF PORTUGUESE ESCUDOS
The Escudo is the national currency of Portugal. Portuguese
bank notes are issued by the Banco de Portugal, which was founded
in 1846 and nationalized in 1974. The Banco de Portugal has been
Portugal's central bank and the sole bank of issue since 1931. On
June 20, 1997, the noon buying rate for cable transfers in New
York City payable in Escudos, as reported by the Federal Reserve
Bank of New York, was PTE 174.40 = $1.00.
The exchange rate between the Escudo and the dollar is, at
any moment, a result of the supply of and the demand for the two
currencies, and changes in such exchange rate result over time
from the interaction of many factors directly or indirectly
affecting economic conditions in Portugal and in the United
States, including economic and political developments in other
countries. Of particular importance are rates of
10
<PAGE>
inflation, interest rate levels, the balance of payments (both on
capital and current account) and the extent of governmental
surpluses or deficits in Portugal and in the United States, all
of which are in turn sensitive to the monetary, fiscal and trade
policies pursued by the governments of Portugal, the United
States and other countries prominent in international trade and
finance. In recent years, rates of exchange between the U.S.
dollar and the Portuguese Escudo have been highly volatile.
TAXATION
The following disclosure supplements, and to the extent
inconsistent therewith, replaces, the disclosure in the
Prospectus Supplement under "Taxation in the United States":
Under U.S. Treasury regulations relating to debt instruments
that provide for contingent payments, gain realized on a sale or
other disposition of the Notes, and the excess of the redemption
price of the Notes over their issue price, will be classified as
interest income (rather than as gain) for U.S. tax purposes. Such
interest income will be exempt from withholding of U.S. Federal
income tax to the extent described in the Prospectus Supplement
under "Taxation in the United States."
11
<PAGE>
APPENDIX A
LIST OF FT-SE(R) EUROTRACK 200 UNDERLYING STOCKS
The following is a list of the companies whose stocks
comprised the FT-SE(R) Eurotrack 200 Index as of June 26, 1997.
Austria
1. OMV AG
Belgium
2. GBL
3. GENERALE BANQUE
4. KREDIETBANK
5. PETROFINA
6. SOLVAY
7. TRACTEBEL
Denmark
8. NOVO ADR
9. TELE DANMARK B
Finland
10. NOKIA A
11. NOKIA K
12. UPM-KYMMENE OY
France
13. ALCATEL ALSTHOM
14. ELF-AQUITAINE
15. AXA
16. B N P (FRF25)
17. CARREFOUR
<PAGE>
18. DANONE
19. GENERALE DES EAUX
20. L'AIR LIQUIDE
21. LAFARGE
22. L'OREAL
23. L.V.M.H.
24. LYONNAISE DES EAUX
25. MICHELIN B
26. PARIBAS
27. PEUGEOT S.A.
28. RENAULT
29. RHONE-POULENC A
30. SCHNEIDER
31. SAINT-GOBAIN
32. SOCIETE GENERALE
33. SUEZ (CIE DE)
34. TOTAL
Germany
35. ALLIANZ
36. BASF AG
37. BAYER AG
38. BMW (BEARER)
39. COMMERZBANK
40. DAIMLER-BENZ
41. DEUTSCHE BANK
42. DEUTSCHE TELECOM
43. DRESDNER BANK
2
<PAGE>
44. HOECHST
45. MANNESMANN
46. RWE
47. SIEMENS
48. VEBA
49. VIAG
50. VOLKSWAGEN
Ireland
51. ALLIED IRISH BANKS PLC
52. BANK OF IRELAND
53. CRH PLC
54. SMURFIT (JEFFERSON) GROUP PLC
Italy
55. ENI
56. FIAT SPA
57. GENERALI ASSICURAZZIONI
58. INA SPA
59. STET
60. TELECOM ITALIA
61. TIM SPA
Netherlands
62. ABN-AMRO HOLDINGS
63. AEGON
64. ING GROUP NV
65. KPN
66. PHILIPS ELECTRONICS NV
67. ROYAL DUTCH SHELL (BR.)
3
<PAGE>
68. UNILEVER NV
Norway
69. NORSK HYDRO
Spain
70. ARGENTARIA
71. BANCO BILBAO VIZCAYA ADR
72. ENDESA ORD
73. IBERDROLA
74. REPSOL SA
75. TELEFONICA ORD
Sweden
76. ABB A
77. ABB B
78. ASTRA A
79. ASTRA B
80. ATLAS COPCO A
81. ELECTROLUX B
82. ERICSSON B
83. INVESTOR A
84. INVESTOR B
85. NORDBANKEN AB
86. SANDVIK A
87. S.C.A. "B"
88. SCANIA AB A
89. SCANIA AB B
90. SE BANKEN A
91. SKANDIA FREE
4
<PAGE>
92. SPARBANKEN
93. VOLVO B
Switzerland
94. CREDIT SUISSE GROUP
95. NESTLE REG
96. NOVARTIS AG
97. ROCHE HOLDINGS
98. SWISS BANK
99. SWISS RE
100. UBS BR
United Kingdom
101. ABBEY NATIONAL PLC
102. ALLIANCE & LEICESTER
103. ALLIED DOMECQ PLC
104. ASDA GROUP PLC
105. ASSOCIATED BRITISH FOODS PLC
106. BAT INDUSTRIES PLC
107. BAA PLC
108. BANK OF SCOTLAND PLC
109. BARCLAYS PLC
110. BASS PLC
111. BG PLC
112. BLUE CIRCLE INDUSTRIES PLC
113. BOC GROUP PLC
114. BOOTS CO PLC
115. BRITISH AEROSPACE PLC
116. BRITISH AIRWAYS PLC
5
<PAGE>
117. BRITISH LAND PLC
118. BRITISH PETROLEUM CO PLC
119. BRITISH SKY BROADCASTING GROUP PLC
120. BRITISH STEEL PLC
121. BRITISH TELECOMMUNICATIONS PLC
122. BTR PLC
123. BURMAH CASTROL PLC
124. CABLE & WIRELESS PLC
125. CADBURY SCHWEPPES PLC
126. CARLTON COMMUNICATIONS PLC
127. CENTRICA PLC
128. COMMERCIAL UNION PLC
129. DIXONS GROUP PLC
130. ENERGY GROUP PLC
131. EMI GROUP PLC
132. ENTERPRISE OIL PLC
133. GENERAL ACCIDENT PLC
134. GENERAL ELECTRIC CO PLC
135. GKN PLC
136. GLAXO WELLCOME PLC
137. GRANADA GROUP PLC
138. GRAND METROPOLITAN PLC
139. GREAT UNIVERSAL STORES PLC
140. GUARDIAN ROYAL EXCHANGE PLC
141. GUINNESS PLC
142. HALIFAX
143. HAYS PLC
6
<PAGE>
144. HANSON PLC
145. HSBC HOLDINGS HKD10
146. HSBC HOLDINGS ORD75p
147. 3i GROUP PLC
148. IMPERIAL CHEMICALS INDUSTRIES PLC
149. IMPERIAL TOBACCO GROUP
150. KINGFISHER PLC
151. LADBROKE GROUP PLC
152. LAND SECURITIES PLC
153. LASMO PLC
154. LEGAL & GENERAL GROUP PLC
155. LLOYDS TSB GROUP PLC
156. LUCAS VARITY
157. MARKS & SPENCER PLC
158. MERCURY ASSET MANAGEMENT GROUP
159. NATIONAL GRID GROUP PLC
160. NATIONAL POWER PLC
161. NATIONAL WESTMINISTER BANK PLC
162. NEXT PLC
163. ORANGE PLC
164. PEARSON PLC
165. PENINSULAR & ORIENTAL STEAM NAVIGATION CO
166. POWERGEN PLC
167. PRUDENTIAL CORPORATION PLC
168. RAILTRACK GROUP
169. RANK GROUP PLC
170. RECKITT & COLMAN PLC
7
<PAGE>
171. REED INTERNATIONAL PLC
172. RENTOKILL INITIAL PLC
173. REUTERS HOLDINGS PLC
174. RIO TINTO
175. RMC GROUP PLC
176. ROLLS ROYCE PLC
177. ROYAL & SUN ALLIANCE INSURANCE GROUP PLC
178. ROYAL BANK OF SCOTLAND GROUP PLC
179. SAFEWAY PLC
180. SAINSBURY (J) PLC
181. SCHRODERS N/V
182. SCHRODERS ORD
183. SCOTTISH & NEWCASTLE PLC
184. SCOTTISH POWER PLC
185. SEVERN TRENT PLC
186. SHELL TRANSPORT AND TRADING CO PLC
187. SIEBE PLC
188. SMITHKLINE BEECHAM PLC
189. SMITHS INDUSTRIES PLC
190. STANDARD CHARTERED PLC
191. TATE & LYLE PLC
192. TESCO PLC
193. THAMES WATER PLC
194. TI GROUP PLC
195. TOMKINS PLC
196. UNILEVER PLC
197. UNITED NEWS & MEDIA PLC
8
<PAGE>
198. UNITED UTILITIES PLC
199. VODAFONE GROUP PLC
200. WHITBREAD PLC
201. WOLSELEY PLC
202. ZENECA GROUP PLC
9
