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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 28, 1998
Salomon Smith Barney Holdings Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-4346 22-166-0266
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
388 Greenwich Street, New York, NY 10013
(Address of principal executive offices) (Zip Code)
(212) 816-6000
(Registrant's telephone number, including area code)
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SALOMON SMITH BARNEY HOLDINGS INC.
CURRENT REPORT ON FORM 8-K
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits:
Exhibit No. Description
1.01 Terms Agreement, dated July 28, 1998, between Salomon
Smith Barney Holdings Inc. (the "Company") and Smith
Barney Inc., as Underwriter, relating to the offer
and sale of the Company's Principal-Protected Equity
Linked Notes based upon the S&P(R) 500 Index Due
August 1, 2005.
4.01 Form of Note for the Company's Principal-Protected
Equity Linked Notes based upon the S&P(R)500 Index
Due August 1, 2005.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 30, 1998 SALOMON SMITH BARNEY HOLDINGS INC.
By: Mark I. Kleinman
-------------------------------
Mark I. Kleinman
Executive Vice President and
Deputy Treasurer
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TERMS AGREEMENT
July 28, 1998
Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, New York 10013
Attention: Executive Vice President and Deputy Treasurer
---------------------------------------------
Dear Sirs:
We understand that Salomon Smith Barney Holdings Inc., a Delaware
corporation (the "Company"), proposes to issue and sell $51,000,000 aggregate
principal amount of its Principal-Protected Equity Linked Notes based upon the
S&P 500(R) Index Due August 1, 2005 (the "Securities"). Subject to the terms and
conditions set forth herein or incorporated by reference herein, we, as
underwriter (the "Underwriter"), offer to purchase $51,000,000 aggregate
principal amount of the Securities at 97.5% of the principal amount thereof.
The Closing Date shall be July 31, 1998 at 9:00 a.m. at the offices of Salomon
Smith Barney Holdings Inc., 388 Greenwich Street, New York, New York 10013.
The Securities shall have the following terms:
Title: Principal-Protected Equity Linked Notes
based upon the S&P 500(R) Index Due
August 1, 2005
Maturity: August 1, 2005
Interest Rate: The Securities will bear no periodic
payments of interest. Holders of the
Securities will be entitled to receive the
principal amount thereof plus a payment, if
any, equal to the Supplemental Redemption
Amount (as defined in the Prospectus
Supplement, dated July 28, 1998, relating to
the Securities).
Interest Payment
Date: Not applicable
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Regular Record
Dates: Not applicable
Initial Price
To Public: 100% of the principal amount thereof
Redemption
Provisions: The Securities are not redeemable by the
Company prior to maturity
Indenture: Senior Debt Indenture, dated as of
October 27, 1993, between the Company
and The Bank of New York, as
supplemented by the First Supplemental
Indenture, dated as of November 28,
1997.
Trustee: The Bank of New York
All the provisions contained in the document entitled "Salomon Smith
Barney Holdings Inc. - Debt Securities - Underwriting Agreement Basic
Provisions" and dated December 1, 1997 (the "Basic Provisions"), a copy of
which you have previously received, are, except as indicated below, herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Terms Agreement to the same extent as if the Basic Provisions had been set
forth in full herein. Terms defined in the Basic Provisions are used herein as
therein defined.
Basic Provisions varied with respect to this Term Agreement:
(A) Notwithstanding the provisions set forth in Section 3 of the Basic
Provisions, the Company and the Under writer hereby agree that the
Securities will be in the form of Book-Entry Notes and shall be
delivered on July 31, 1998 against payment of the purchase price to the
Company by wire transfer in immediately available funds to such
accounts with such financial institutions as the Company may direct;
(B) Paragraph 4(j) of the Basic Provisions shall be amended and restated as
follows: "The Company will not, without the consent of Smith Barney
Inc., offer or sell, or publicly announce its intention to offer or
sell, any debt securities denominated in the currency in which the
Securities are denominated having a maturity of more than one year
(except under prior contractual commitments or pursuant to bank credit
agreements) during the period beginning the date of the Terms Agreement
and ending the business day following the Closing Date;"
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(C) Paragraph 5(f) of the Basic Provisions shall be amended as follows: the
words "Chairman of the Board, any Vice Chairman, the President or any
Vice President and of the principal financial or accounting officer of
the Company" shall be replaced by the words "Chief Financial Officer
and any Vice President of the Company;"
(D) A new paragraph 5(i) shall be added to the Basic Provisions and read as
follows: "Cleary, Gottlieb, Steen & Hamilton, tax counsel to the
Company, shall have furnished to you an opinion, dated the Closing
Date, as to certain tax matters relating to the Securities, in a form
reasonably acceptable to the Underwriter and its counsel;" and
(E) Cleary, Gottlieb, Steen & Hamilton shall have furnished to you an
opinion, dated the Closing Date, as to the matters referenced in
paragraphs 5(c) (ii), (iii), (iv), (v) (vi) of the Basic Provisions.
Robert H. Mundheim, Esq. shall have furnished to you an opinion, dated
the Closing Date, as to the matters referenced in paragraphs 5(c) (i),
(vii) and (viii) and 5(d) (i), (ii) and (iii) of the Basic Provisions.
The Underwriter hereby agrees in connection with the underwriting of
the Securities to comply with the requirements set forth in any applicable
sections of Section 2720 to the By-Laws of the National Association of
Securities Dealers, Inc.
Cleary, Gottlieb, Steen & Hamilton and Robert H. Mundheim, Esq. are
counsel to the Company. Cleary, Gottlieb, Steen & Hamilton is tax counsel to the
Company Skadden, Arps, Slate, Meagher & Flom LLP is counsel to the Underwriter.
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Please accept this offer no later than 9:00 p.m. on July 28, 1998, by
signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms Agreement, dated
July 28, 1998, to purchase the Securities on the terms set forth therein."
Very truly yours,
SMITH BARNEY INC.
By: /s/ Edward G. Watson
------------------------
Name: Edward G. Watson
Title: Director
ACCEPTED:
SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ Mark I. Kleinman
----------------------
Name: Mark I. Kleinman
Title: Executive Vice President and
Deputy Treasurer
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Exhibit 4.01
(FORM OF NOTE)
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO SALOMON SMITH BARNEY HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. R- 1 PRINCIPAL AMOUNT
CUSIP 79549B818 REPRESENTED
$xxx
SALOMON SMITH BARNEY HOLDINGS INC.
Principal-Protected Equity Linked Notes based upon the S&P 500(R) Index
due xxx, 2005
Salomon Smith Barney Holdings Inc., a Delaware corporation (hereinafter
referred to as the "Company" which term includes any successor corporation under
the Indenture herein referred to), for value received, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum of xxx ($xxx) (the
"Principal Amount") plus the Supplemental Redemption Amount, as defined below,
if any, on xxx, 2005 (the "Stated Maturity"). This Note will not bear periodic
payments of interest, is not subject to redemption or any sinking fund prior to
maturity, and is not subject to the defeasance provisions of the
within-mentioned indenture.
Payment of the Principal Amount and the Supplemental Redemption Amount
with respect to this Note shall be made upon presentation and surrender of this
Note at the corporate trust office of the Trustee in the Borough of Manhattan,
The City and State of New York, in such coin or currency of the United States as
at the time of payment is legal tender for payment of public and private debts.
This Note is one of the series of Principal-Protected Equity Linked
Notes based upon the S&P 500(R) Index due xxx, 2005 (the "Notes").
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SUPPLEMENTAL REDEMPTION AMOUNT
The "Supplemental Redemption Amount" with respect to this Note equals:
Adjusted Ending Value - Starting Value
Principal Amount X --------------------------------------
Starting Value
provided, however, that in no event will the Supplemental Redemption Amount be
less than zero. The "Starting Value" equals xxx, which was the closing value of
the Standard & Poor's 500(R) Composite Stock Price Index (the "Index") on xxx,
1998. The "Adjusted Ending Value" will be determined by Smith Barney Inc. (the
"Calculation Agent", which term includes any successor thereto) and will equal
the average (arithmetic mean) of the closing values of the Index as adjusted by
the Adjustment Factor (the "Adjusted Index Value") determined on each of the
first five Calculation Days during the Calculation Period. If there are fewer
than five Calculation Days, then the Adjusted Ending Value will equal the
average (arithmetic mean) of the closing values of the Adjusted Index Value on
such Calculation Days, and if there is only one Calculation Day, then the
Adjusted Ending Value will equal the closing value of the Adjusted Index Value
on such Calculation Day. If no Calculation Days occur during the Calculation
Period, then the Adjusted Ending Value will equal the closing value of the
Adjusted Index Value determined on the last scheduled Index Business Day in the
Calculation Period, regardless of the occurrence of a Market Disruption Event on
such day.
The "Adjustment Factor" equals xxx% per annum, and will be applied to
reduce the value of the Index during the term of the Notes. If the Adjusted
Ending Value is calculated with respect to a date earlier than the stated
maturity of the Notes, the Adjustment Factor will be reduced pro rata to reflect
the number of days elapsed between xxx, 1998 and such date.
The "Calculation Period" means the period from and including the
seventh scheduled Index Business Day prior to the maturity date to and including
the second scheduled Index Business Day prior to the maturity date. A
"Calculation Day" means any Index Business Day during the Calculation Period on
which a Market Disruption Event has not occurred.
For purposes of determining the Adjusted Ending Value, an "Index
Business Day" is a day on which the New York Stock Exchange (the "NYSE") and the
American Stock Exchange (the "AMEX") are open for trading and the Index or any
Successor Index, as defined below, is calculated and published. All
determinations made by the Calculation Agent shall be at the sole discretion of
the Calculation Agent and shall be conclusive for all purposes and binding on
the Company and beneficial owners of the Notes, absent manifest error.
DISCONTINUANCE OF THE S&P 500 INDEX
If Standard & Poor's ("S&P) discontinues publication of the Index and
S&P or another entity publishes a successor or substitute index that the
Calculation Agent determines, in its sole discretion, to be comparable to such
Index (any such index being referred to hereinafter as a "Successor Index"),
then the Adjusted Ending Value shall be determined by reference to the
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value of such Successor Index using the methodology described above under
"Supplemental Redemption Amount."
Upon any selection by the Calculation Agent of a Successor Index, the
Company shall cause notice thereof to be furnished to the Trustee, who shall
provide notice thereof to the holders of the Notes.
If S&P discontinues publication of the Index and a Successor Index is
not selected by the Calculation Agent or is no longer published on any
Calculation Day, the value to be substituted for the Index for any such
Calculation Day used to calculate the Supplemental Redemption Amount at maturity
will be a value computed by the Calculation Agent for such Calculation Day in
accordance with the procedures last used to calculate the Index prior to any
such discontinuance.
If S&P discontinues publication of the Index prior to the period during
which the Supplemental Redemption Amount is to be determined and the Calculation
Agent determines that no Successor Index is available at such time, then on each
Index Business Day until the earlier to occur of (a) the determination of the
Adjusted Ending Value and (b) a determination by the Calculation Agent that a
Successor Index is available, the Calculation Agent shall determine the value
that would be used in computing the Supplemental Redemption Amount as described
in the preceding paragraph as if such day were a Calculation Day. The
Calculation Agent will cause notice of each such value to be published not less
often than once each month in The Wall Street Journal (or another newspaper of
general circulation), and arrange for information with respect to such values to
be made available by telephone.
If a Successor Index is selected or the Calculation Agent calculates a
value as a substitute for the S&P 500 Index as described above, such Successor
Index or value shall be substituted for the S&P 500 Index for all purposes,
including for purposes of determining whether a Market Disruption Event exists.
ADJUSTMENTS TO THE INDEX; MARKET DISRUPTION EVENTS
If at any time the method of calculating the Index or a Successor
Index, or the value thereof, is changed in any material respect, or if the Index
or a Successor Index is in any other way modified so that such Index does not,
in the opinion of the Calculation Agent, fairly represent the value of the Index
or such Successor Index had such changes or modifications not been made, then,
from and after such time, the Calculation Agent shall, at the close of business
in New York, New York, on each date that the closing value with respect to the
Adjusted Ending Value is to be calculated, make such adjustments as, in the good
faith judgment of the Calculation Agent, may be necessary in order to arrive at
a calculation of a value of a stock index comparable to the Index or such
Successor Index as if such changes or modifications had not been made, and
calculate such closing value with reference to the Index, as adjusted.
Accordingly, if the method of calculating the Index or such Successor Index is
modified so that the value of such Index or such Successor Index is a fraction
or a multiple of what it would have been if it had not been modified (e.g., due
to a split in such Index), then the Calculation Agent
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shall adjust such Index in order to arrive at a value of such Index as if it had
not been modified (e.g., as if such split had not occurred).
The Trustee shall not at any time be under any duty or responsibility
to any Holder of this Note to determine whether any facts exist which may
require any adjustment to the Adjusted Ending Value or with respect to the
nature or extent of any such adjustment when made or with respect to the method
employed in making the same.
"Market Disruption Event" means any of the following events, as
determined by the Calculation Agent:
(i) the suspension or material limitation of trading in 20%
or more of the underlying stocks which then comprise the Index or any
Successor Index, in each case, for more than two hours of trading or
during the one-half hour period preceding the close of trading on the
NYSE or any other applicable organized U.S. exchange (for purposes of
this definition, limitations on trading during significant market
fluctuations imposed pursuant to NYSE Rule 80B (or any applicable rule
or regulation enacted or promulgated by the NYSE, any other self
regulatory organization or the SEC of similar scope or as a replacement
for Rule 80B, as determined by the Calculation Agent) shall be
considered "material"; or
(ii) the suspension or material limitation, in each case, for
more than two hours of trading or during the one-half hour period
preceding the close of trading (whether by reason of movements in price
otherwise exceeding levels permitted by the relevant exchange or
otherwise) in (A) futures contracts related to the Index or any
Successor Index or options on such futures contracts which are traded
on any major U.S. exchange or (B) options contracts related to the
Index or any Successor Index which are traded on any major U.S.
exchange; or
(iii) the unavailability, through a recognized system of
public dissemination of transaction information, for more than two
hours of trading or during the one-half hour period preceding the close
of trading, of accurate price, volume or related information in respect
of 20% or more of the underlying stocks which then comprise the Index
or any Successor Index or in respect of futures contracts related to
the Index or any Successor Index, options on such futures contracts or
options contracts related to the Index or any Successor Index, in each
case traded on any major U.S. exchange.
For purposes of determining whether a Market Disruption Event has
occurred: (1) a limitation on the hours or number of days of trading will not
constitute a Market Disruption Event if it results from an announced change in
the regular business hours of the relevant exchange or market, (2) a decision to
permanently discontinue trading in the relevant futures or options contract will
not constitute a Market Disruption Event, (3) any suspension in trading in a
futures or options contract on the Index or any Successor Index by a major
securities market by reason of (x) a price change violating limits set by such
securities market, (y) an imbalance of orders relating to such contracts or (z)
a disparity in bid and ask quotes relating to such contracts will constitute a
Market Disruption Event, notwithstanding that such suspension or material
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limitation is less than two hours, and (4) a "suspension or material limitation"
on an exchange or in a market will include a suspension or material limitation
of trading by one class of investors provided that such suspension continues for
more than two hours of trading or during the last one-half hour period preceding
the close of trading on the relevant exchange or market (but will not include
limitations imposed on certain types of trading under NYSE Rule 80A) and will
not include any time when such exchange or market is closed for trading as part
of such exchange's or market's regularly scheduled business hours.
GENERAL
This Note is one of a duly authorized issue of Debt Securities of the
Company, issued and to be issued in one or more series under an indenture, dated
as of October 27, 1993, as supplemented by a First Supplemental Indenture, dated
as of November 28, 1997, and as further supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes, and the terms upon which the Notes
are, and are to be, authenticated and delivered.
The Notes are not subject to redemption by the Company or at the option
of any Holder prior to the Stated Maturity.
If an Event of Default with respect to the Notes shall have occurred
and be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture. In such case, the
amount declared due and payable upon any acceleration permitted by the Indenture
will be determined by the Calculation Agent and will be equal to, with respect
to each $15.00 principal amount thereof: (i) $15.00, plus (ii) the Supplemental
Redemption Amount with respect thereto, if any, calculated as though the Stated
Maturity of the Notes were the date of early repayment.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series to
be affected under the Indenture at any time by the Company and a majority in
aggregate principal amount of the Debt Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of
all Debt Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
The Holder of this Note may not enforce such Holder's rights pursuant
to the Indenture or the Notes except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company,
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which is absolute and unconditional, to pay the Principal Amount plus the
Supplemental Redemption Amount with respect to this Note and any interest on any
overdue amount thereof at the time, place, and rate, and in the coin or
currency, herein prescribed.
Upon issuance, all Notes will be represented by one or more
fully-registered global securities (the "Global Notes"). Each such Global Note
will be deposited with, or on behalf of, DTC, and registered in the name of DTC
or a nominee thereof.
Unless and until it is exchanged in whole or in part for Notes in
definitive form, no Global Note may be transferred except as a whole by DTC to a
nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC
or any such nominee to a successor of DTC or a nominee of such successor.
Accountholders in the Euroclear or Cedel Bank clearance systems may
hold beneficial interests in the Notes through the accounts each such system
maintains as a participant in DTC.
All terms used in this Note which are defined in the Indenture but not
in this Note shall have the meanings assigned to them in the Indenture.
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Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purposes.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
SALOMON SMITH BARNEY HOLDINGS INC.
By:________________
Name:
Title:
Corporate Seal
Attest:
By:______________________
Name:
Title:
Dated: xxx, 1998
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in
the within-mentioned Indenture.
The Bank of New York,
as Trustee
By:______________________
Authorized Signatory
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