Pricing Supplement No Euro H013 Dated:July 29, 1998 Rule 424(b)(2)
(To Prospectus dated December 1, 1997 and File No. 333-38931
Prospectus Supplement dated December 5, 1997)
This Pricing Supplement consists of 28 page(s)
SALOMON SMITH BARNEY HOLDINGS INC.
Medium-Term Notes, Series H
(Bearer Notes)
Due More Than Nine Months from Date of Issue
Principal Amount or Face Amount: ITL 7,900,000,000
Issue Price: 93.50%
Proceeds to Company on original issuance: ITL 7,386,500,000
Commission or Discount on original issuance: USD 12,250
Salomon Brothers International Limited's capacity on original issuance:
|X| As agent | | As principal
If as principal
| | 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: August 3, 1998
Stated Maturity: August 6, 2004
Specified Currency: ITL
(If other than U.S. Dollars)
Authorized Denominations: 100,000,000 ITL
If other than as set forth in the Prospectus Supplement)
Interest Payment Dates: N.A.
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): N.A.
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.
Minimum 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: 008918155
ISIN: xs0089181555
CUSIP: N.A.
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
INDEXED PRINCIPAL NOTES; NO PERIODIC PAYMENTS OF INTEREST.
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 (as indicated on the cover of this Pricing Supplement).
However, any such amount in excess of such face amount that may
be payable in respect of principal on such Note will be
determined by reference to changes in the value of three
international equity indexes during the period between July 16,
1998 and July 9, 2004. As described more fully below under
"Indexed Principal," if the arithmetic average of the published
closing prices of any of the FTSE Eurotop 100-Index(R), the
Nikkei 225 Index, or the Standard & Poor's 500(R) Index (each of
which equity indexes is described more fully below) on the 16th
of each of the 71 months during the term of the Notes through
June 2004 and on July 9, 2004 exceeds a reference level
determined by the Calculation Agent based upon the closing value
of each such index on July 16, 1998, the amount in respect of
principal payable with respect to a Note at Stated Maturity will
be greater than the face amount of such Note. If this condition
is not satisfied for any such index during the term of the Notes,
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 ANY 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 any
of (i) New York, New York, (ii) Tokyo, Japan, (iii) Frankfurt,
Germany, (iv) London, England, (v) Paris, France, (vi) Madrid,
Spain, (vii) Stockholm, Sweden, (vii) Milan, Italy, (viii)
Brussels, Belgium or (ix) Amsterdam, The Netherlands.
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If any date specified herein for the making of any payment,
calculation, determination or other action with respect to the
Notes would be a day that is not a Business Day, such action
shall be taken on the next succeeding Business Day; provided,
however, that if such Business Day is in the next succeeding
calendar month, such action shall be taken on the immediately
preceding Business Day.
The "Calculation Agent" will be Salomon Brothers
International Limited, which is a wholly-owned subsidiary of
Salomon Smith Barney Holdings Inc. (the "Company").
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 (the "Index Formula"):
IPA = FA PLUS [FA TIMES 0.90 TIMES (THE GREATER OF ZERO AND
[1/3 TIMES (E PLUS N PLUS S) MINUS 1])]; where:
"IPA" means the Indexed Principal Amount payable at
Stated Maturity of the Note.
"FA" means the Face Amount of the Note (as stated on
the cover of this Pricing Supplement).
"E" MEANS EA/EI; where:
EA means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the Eurotop
100-index(R), as published by FTSE International Limited
("FTSE"), on the 16th of each month from and including August
1998 through and including June 2004 and on July 9, 2004.
EI means 3021.01, which was the closing price of the
Eurotop 100-Index(R), as published by FTSE, on July 16, 1998.
"N" MEANS NA/NI; where
NA means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the Nikkei 225 Index,
as published by Nihon Keizai Shimbun, Inc. ("NKS"), on the 16th
of each month from and including August 1998 through and
including June 2004 and on July 9, 2004.
NI means 16731.92, which was the closing price of the
Nikkei 225 Index, as published by NKS, on July 16, 1998.
"S" MEANS SA/SI; where
SA means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the Standard & Poor's
500(R) Composite Stock Price Index (the "S&P 500 Index"), as
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published by Standard & Poor's ("S&P"), a Division of the McGraw
Hill Companies, Inc., on the 16th of each month from and
including August 1998 through and including June 2004 and on July
9, 2004.
SI means 1183.99, which was the closing price of the S&P
500 Index, as published by S&P, on July 16, 1998.
SUCCESSOR INDEXES
If FTSE discontinues publication of the FTSE Eurotop
100-Index(R) and publishes a successor or substitute index that
the Company determines, in its sole discretion, to be
comparable to the FTSE Eurotop 100-Index(R) (any such successor
or substitute index being hereinafter referred to as a "Successor
Eurotop Index"), then the Indexed Principal Amount shall be
determined by the Calculation Agent, on behalf of the Company,
based on such Successor Eurotop Index. In the event that the FTSE
Eurotop 100-Index(R) or any Successor Eurotop Index ceases
publication, the Calculation Agent, acting on behalf of the
Company and in its sole discretion, shall calculate the Indexed
Principal Amount based on the formula and method used in
calculating the FTSE Eurotop 100-Index(R) as of the Issue Date of
the Notes using the closing values of appropriate securities
traded on stock exchanges in countries that are European member
states of the Organization for Economic Cooperation and
Development ("OECD"), as chosen in its sole discretion.
If NKS discontinues publication of the Nikkei 225 Index and
publishes a successor or substitute index that the Company
determines, in its sole discretion, to be comparable to the
Nikkei 225 Index (any such successor or substitute index being
hereinafter referred to as a "Successor Nikkei Index"), then the
Indexed Principal Amount shall be determined by the Calculation
Agent, on behalf of the Company, based on such Successor Nikkei
Index. In the event that the Nikkei 225 Index or any Successor
Nikkei Index ceases publication, the Calculation Agent, acting on
behalf of the Company and in its sole discretion, shall calculate
the Indexed Principal Amount based on the formula and method used
in calculating the Nikkei 225 Index as of the Original Issue Date
of the Notes using the closing values of appropriate securities
traded on the Tokyo Stock Exchange (the "TSE"), as chosen in its
sole discretion.
If S&P discontinues publication of the S&P 500 Index and
publishes a successor or substitute index that the Company
determines, in its sole discretion, to be comparable to the S&P
500 Index (any such successor or substitute index being
hereinafter referred to as a "Successor S&P Index"), then the
Indexed Principal Amount of the Notes shall be determined by the
Calculation Agent, on behalf of the Company, based on such
Successor S&P Index. In the event that the S&P 500 Index or any
Successor S&P Index ceases publication, the Calculation Agent,
acting on behalf of the Company and in its sole discretion, shall
calculate the Indexed Principal Amount based on the formula and
method used in calculating the S&P 500 Index as of the Original
Issue Date of the Notes using the closing values of appropriate
securities traded on the New York Stock Exchange (the "NYSE"), as
chosen in its sole discretion.
None of the Calculation Agent, the Company or any Agent
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
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<PAGE>
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 (i)
the FTSE Eurotop 100-Index(R) or any Successor Eurotop Index by
FTSE or any other publisher thereof, (ii) the Nikkei 225 Index or
any Successor Nikkei Index by NKS or any other publisher thereof
or (iii) the S&P 500 Index or any Successor S&P 500 Index by S&P
or any other publisher thereof.
PAYMENT DATE
The Stated Maturity of the Notes is August 6, 2004.
EVENTS OF DEFAULT AND ACCELERATION
In case an Event of Default (as described in the
accompanying Prospectus) with respect to the Notes shall have
occurred and be continuing, the amount payable to a Holder of a
Note upon any acceleration permitted by the Notes will be equal
to the Indexed Principal Amount in respect of such Note,
calculated in the manner set forth above as though the date of
early repayment was the Stated Maturity of the Notes. If a case
under the United States bankruptcy code is commenced in respect
of the Company, the claim of a Holder of a Note may be limited,
under Title 11 of the United States Code, to the face amount of
such Note.
In case of default in payment at the maturity date of the
Notes (whether at Stated Maturity or upon acceleration), from and
after the maturity date, the Notes shall bear interest, payable
upon demand of the Trustee, at the rate of 6.125% per annum (to
the extent that payment of such interest shall be legally
enforceable) on the unpaid amount due and payable on such date in
accordance with the terms of the Notes to the date payment of
such amount is made or duly provided for.
DESCRIPTION OF FTSE EUROTOP 100-INDEX(R)
Unless otherwise stated, all information herein relating to
the FTSE Eurotop 100-Index(R) has been derived from information
made available by FTSE and other publicly available sources. Such
information reflects the policies of FTSE as of July 27, 1998 as
stated in such sources; such policies are subject to change at
the discretion of FTSE.
The FTSE Eurotop 100-Index(R) is a stock index published,
operated and distributed by the London Stock Exchange (the "LSE")
and regulated and supervised by the European Indices Committee of
FTSE that is intended to measure the composite price performance
of the underlying stocks, which have been selected in an attempt
to represent the 100 most liquid stocks of European issuers
trading on the principal European stock exchanges and to
otherwise reflect general market trends on such exchanges. FTSE
took over the publication, operation and distribution of the FTSE
Eurotop 100-Index(R) from Amsterdam Exchanges N.V. ("AEX") in May
1998.
There are two components to the process of selecting the
stocks that comprise the FTSE Eurotop-100 Index(R). The first
component consists of the selection of the countries that are to
be represented in the FTSE Eurotop-100 Index(R). Any such country
must first be one of the
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European member states of the OECD. Selection of countries for
inclusion is then based on the aggregate exchange capitalization
in ECU of stocks of domestic issuers listed on stock exchanges in
the relevant country at the end of the previous calendar year.
For purposes of this calculation, aggregate exchange
capitalization is generally defined as the aggregate market
capitalization of all stocks of domestic issuers traded on the
leading stock exchange in such country (although for the Federal
Republic of Germany, aggregate exchange capitalization is
calculated for the country as a whole). The principal stock
exchange of the European country with the largest exchange
capitalization is the first exchange to be included in the FTSE
Eurotop 100-Index(R), and exchanges from other qualifying
countries will then be considered in decreasing order of
aggregate exchange capitalization. The principal stock exchange
of any such country will be added to the FTSE Eurotop
100-Index(R) if the aggregate exchange capitalization of the
relevant country amounts to more than 2.5% of the aggregate
exchange capitalization of all selected countries. Each of the
countries with an exchange included in the FTSE Eurotop
100-Index(R) is assigned a base weighting derived from its
aggregate exchange capitalization at the end of past calendar
year; the number of stocks from such country that are included in
the FTSE Eurotop 100-Index(R) is determined by and equal to that
country's base weighting, in percentage points.
As of July 27, 1998, the underlying stocks that comprise
the FTSE Eurotop 100-Index(R) are traded on the following
European exchanges: the London Stock Exchange ("LSE"), the
Frankfurter Wertpapierborse (the Frankfurt Stock Exchange or
"FWB"), the Bourse de Paris (the "Paris Stock Exchange"), the
Schweizer Borse (the Swiss Stock Exchange or "SWX"), the AEX
Effectenbeurs (the Amsterdam Stock Exchange or "ASE"), the Borsa
Italiana (the Italian Stock Exchange or "ISE"), the Sociedad
Rectora de la Bolsa de Valores de Madrid (the Madrid Stock
Exchange or "MSE"), the Stockholm Fondbors AB (the Stockholm
Stock Exchange or "SSE") and the Bourse de Bruxelles/Beurs van
Brussel (the Brussels Stock Exchange or "BSE").
The second component of the FTSE Eurotop 100-Index(R)
selection process consists of the selection of the individual
constituent stocks, which are chosen on the basis of the
cumulative trading volume in each stock on the principal
exchanges in their respective countries over the past three
years, with the stocks having the highest such cumulative trading
volume in each country generally being selected to fill the
number of places in the index assigned to such country. If a
particular issuer has stock listed on more than one exchange,
only the listing with the highest trading volume is taken into
consideration. Certain stocks (including those regarded as
investment funds or stocks that may only be owned by residents of
the relevant country) are excluded from selection. The stocks
which are included in the index are assigned a base weighting
derived from their market capitalization on the date of periodic
adjustment, which is expressed by the number of shares included
in the FTSE Eurotop 100-Index(R). Where possible, each
constituent stock is represented by an integral number of shares.
The FTSE Eurotop 100- Index(R) was first published on December
29, 1989 and is widely reported by newspapers (including the
Financial Times) and other media. See Appendix B hereto for a
list of the stocks comprising the FTSE Eurotop 100-Index(R) as of
July 27, 1998.
The value of the FTSE Eurotop 100-Index(R) is calculated on
the basis of share prices and foreign exchange rates. The share
prices are transaction prices established during normal,
regulated trading exclusively on the principal stock exchange in
each of the countries included in the FTSE Eurotop 100-Index(R).
The share prices used are those most recently published on the
business day in question, converted into ECU on the basis of
cross rates of the relevant offer
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<PAGE>
prices most recently published by two leading data vendors. At
any particular time, the FTSE Eurotop 100-Index(R) is calculated
by multiplying the sum of the most recently published prices of
each of the underlying stocks, converted into ECU, by their
relevant weight, and divided by 100. Calculation of the official
values of the FTSE Eurotop 100-Index(R) will start at such time
as all of the relevant exchanges will customarily have started
normal, regulated trading and the compiler of the index (the
management of FTSE) has received the necessary prices. If for any
reason the price of a stock or a necessary exchange rate is not
known at this time, the index will be calculated on the basis of
the last price for that stock or the last foreign exchange rate
which was available. If at the time of the calculation of the
official opening value less than 75 of the underlying stocks are
open for normal regulated trading on the relevant home exchanges,
index values published until the time of the calculation of the
official closing value for that day are "partial index values."
The calculation of official values of the FTSE Eurotop
100-Index(R) will end at such time as the last relevant stock
exchange will have customarily ceased normal regulated trading.
The FTSE Eurotop 100-Index(R) is currently updated every
fifteen seconds between 8.30 A.M. and 4.30 P.M., London time. Due
to the time zone difference between New York City and London on
any normal trading day, trading in the underlying stocks of the
FTSE Eurotop 100- Index(R) on the relevant European stock
exchanges will cease prior to the end of the trading day in New
York City. The Official Index Closing Price of the FTSE Eurotop
100-Index(R) is generally issued at 4:30 P.M., London time and
will therefore generally be available in the United States
shortly after 11.30 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.
The FTSE Eurotop 100-Index(R) 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 FTSE
Eurotop 100-Index(R) than a 5 percent price change in the 100th
ranked underlying stock.
Once each year, immediately following the third Friday in
April, the compiler of the FTSE Eurotop 100-Index(R) undertakes a
review of the underlying stocks and determines whether it is
necessary to add or delete securities from the FTSE Eurotop
100-Index(R). The review of the constituent countries and stocks
is conducted on the basis of the selection criteria described
above. In addition, if there is a non-FTSE Eurotop 100-Index(R)
constituent stock with an effective trading volume that is at
least 10% higher than the effective trading volume of a
constituent stock, then that non-index stock will be selected to
replace the constituent stock that has the lowest effective
volume in that country. At such time, the weights of the
constituent stocks in the index may also be revised to take
account of takeovers, mergers, split ups, spin offs, stock
dividends, bonus payments or rights issues. However, no
adjustment takes place if the effect of any such action is less
than 0.01 index points (1 ECU). No operational adjustments are
made for changes in market capitalization as a result of a normal
issue of new shares by issuers of the underlying stocks.
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FTSE is under no obligation to continue the calculation and
dissemination of the FTSE Eurotop 100-Index(R). The Notes are not
in any way sponsored, endorsed, sold or promoted by AEX, FTSE,
London Stock Exchange Limited ("LSEL") or the Financial Times
Ltd. ("FTL", and, collectively with AEX, FTSE and LSEL, the
"Owners") and none of the Owners are otherwise involved in the
issue and offering of the Notes. The Owners make no warranty or
representation whatsoever, expressly or impliedly, either as to
the results to be obtained from the use of the FTSE Eurotop
100-Index(R) and/or the figure at which the FTSE Eurotop
100-Index(R) stands on any particular day or otherwise. The FTSE
Eurotop 100-Index(R) is compiled by or on behalf of FTSE and the
AEX. However, none of the Owners have any obligation or liability
in connection with the administration, marketing or trading of
the Notes. The Owners shall not be liable (whether in negligence
or otherwise) to any person for any error in the FTSE Eurotop
100- Index(R) and shall not be under any obligation to advise any
person of any error therein.
"FTSE" and "Footsie" are registered trade marks of LSEL and
FTL and are used by FTSE under license. "Eurotop" is a registered
trademark of the AEX or its subsidiaries and is used by FTSE
under license. FTSE 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 by
the Owners in connection with the issuance of the Notes. The use
of and reference to the FTSE Eurotop 100-Index(R) in connection
with the Notes have been consented to by the Owners.
None of the Company, the Calculation Agent, the Trustee
under the Senior Debt Indenture or any Agent accepts any
responsibility for the calculation, maintenance or publication of
the FTSE Eurotop 100-Index(R) or any Successor Eurotop Index. The
Owners disclaim all responsibility for any errors or omissions in
the calculation and dissemination of the FTSE Eurotop
100-Index(R) or the manner in which such index is applied in
determining any Indexed Principal Amount or any other amount
payable with respect to the Notes.
HISTORICAL DATA ON THE FTSE EUROTOP 100-INDEX(R)
The following table sets forth the highest and lowest daily
closing price of the FTSE Eurotop 100-Index(R), as published by
FTSE or its predecessors, for each quarter during the period from
1993 through July 27, 1998, as well as the closing price of the
FTSE Eurotop 100-Index(R) as of the end of each such quarter or
partial quarter. The historical values of the FTSE Eurotop 100-
Index(R) should not be taken as an indication of future
performance.
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Daily Closing Prices
------------------------------
Highest Lowest Period
Level Level End
------- ------- ------
1993
1st Quarter 952.32 862.69 947.38
2nd Quarter 1012.86 934.84 1012.86
3rd Quarter 1133.15 1001.66 1104.34
4th Quarter 1239.00 1106.53 1239.00
1994
1st Quarter 1392.63 1202.49 1212.65
2nd Quarter 1275.91 1143.06 1154.33
3rd Quarter 1242.55 1149.08 1164.33
4th Quarter 1200.78 1136.48 1178.46
1995
1st Quarter 1189.18 1117.30 1147.10
2nd Quarter 1244.92 1152.00 1214.06
3rd Quarter 1316.68 1220.02 1282.90
4th Quarter 1344.19 1239.68 1342.85
1996
1st Quarter 1417.35 1333.01 1414.32
2nd Quarter 1458.08 1414.70 1438.49
3rd Quarter 1471.55 1364.41 1471.55
4th Quarter 1614.77 1474.86 1614.77
1997
1st Quarter 1894.47 1583.79 1858.99
2nd Quarter 2130.39 1774.05 2108.06
3rd Quarter 2355.95 2132.47 2309.12
4th Quarter 2351.23 2044.47 2299.75
1998
1st Quarter 2808.10 2236.40 2805.73
2nd Quarter 2928.66 2666.61 2890.83
3rd Quarter
(through
July 27, 1998) 3066.91 2913.59 2913.59
The closing price of the FTSE Eurotop 100-Index(R) on July 27,
1998 was 2913.59.
Since its inception, the FTSE Eurotop 100-Index(R) has
experienced significant daily price fluctuations. Any historical
upward or downward trend in the closing level of the FTSE Eurotop
100-Index(R) during any period set forth above is not any
indication that the FTSE Eurotop 100- Index(R) is more or less
likely to increase or decline at any time during the term of the
Notes.
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DESCRIPTION OF NIKKEI 225 INDEX
Unless otherwise stated, all information herein relating to
the Nikkei 225 Index has been derived from the Stock Market
Indices Data Bank published by NKS and other publicly available
sources. Such information reflects the policies of NKS as of July
27, 1998 as stated in such sources; such policies are subject to
change at the discretion of NKS.
The Nikkei 225 Index is a stock index calculated, published
and disseminated by NKS that measures the composite price
performance of selected Japanese stocks. The Nikkei 225 Index is
currently based on 225 highly capitalized underlying stocks
trading on the TSE representing a broad cross-section of Japanese
industries. See Appendix A hereto for a list of the stocks
comprising the Nikkei 225 Index as of July 27, 1998. All 225
underlying stocks are stocks listed in the First Section of the
TSE. Stocks listed in the First Section are among the most
actively traded stocks on the TSE.
The Nikkei 225 Index is a modified, price-weighted index
(i.e., an underlying stock's weight in the index is based on its
price per share rather than the total market capitalization of
the issuer) which is calculated by (i) multiplying the per share
price of each underlying stock by the corresponding weighting
factor for such underlying stock (a "Weight Factor"), (ii)
calculating the sum of all these products and (iii) dividing such
sum by a divisor (the "Divisor"). The Divisor, initially set in
1949 at 225, was 10.010 as of July 27, 1998 and is subject to
periodic adjustments as set forth below. Each Weight Factor is
computed by dividing yen 50 by the par value of the relevant
underlying stock, so that the share price of each underlying
stock when multiplied by its Weight Factor corresponds to a share
price based on a uniform par value of yen 50. The stock prices
used in the calculation of the Nikkei 225 Index are those
reported by a primary market for the underlying stocks (currently
the TSE). The level of the Nikkei 225 Index is calculated once
per minute during TSE trading hours.
In order to maintain continuity in the level of the Nikkei
225 Index in the event of certain changes due to non-market
factors affecting the underlying stocks, such as the addition or
deletion of stocks, substitution of stocks, stock dividends,
stock splits or distributions of assets to stockholders, the
Divisor used in calculating the Nikkei 225 Index is adjusted in a
manner designed to prevent any instantaneous change or
discontinuity in the level of the Nikkei 225 Index. Thereafter,
the Divisor remains at the new value until a further adjustment
is necessary as the result of another change. As a result of such
change affecting any underlying stock, the Divisor is adjusted in
such a way that the sum of all share prices immediately after
such change multiplied by the applicable Weight Factor and
divided by the new Divisor (i.e., the level of the Nikkei 225
Index immediately after such change) will equal the level of the
Nikkei 225 Index immediately prior to the change.
Underlying stocks may be deleted or added by NKS. Any stock
becoming ineligible for listing in the First Section of the TSE
due to any of the following reasons will be deleted from the
underlying stocks: (i) bankruptcy of the issuer, (ii) merger of
the issuer with, or acquisition of the issuer by, another
company, (iii) delisting of such stock, (iv) transfer of such
stock to the "Seiri-Post" because of excess debt of the issuer or
because of any other reason or (v) transfer of such stock to the
Second Section. Upon deletion of a stock from the underlying
stocks, NKS will select a suitable replacement for such deleted
underlying stock in accordance with certain
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criteria. In an exceptional case, a newly listed stock in the
First Section of the TSE that is recognized by NKS to be
representative of a market may be added to the underlying stocks.
In such a case, an existing underlying stock with low trading
volume and not representative of a market will be deleted by NKS.
NKS is under no obligation to continue the calculation and
dissemination of the Nikkei 225 Index. The Notes are not
sponsored, endorsed, sold or promoted by NKS. No inference should
be drawn from the information contained in this Pricing
Supplement that NKS makes any representation or warranty, implied
or express, to the Company, the Holders or any member of the
public regarding the advisability of investing in securities
generally or in the Notes in particular or the ability of the
Nikkei 225 Index to track general stock market performance. NKS
has no obligation to take the needs of the Company or the Holders
of the Notes into consideration in determining, composing or
calculating the Nikkei 225 Index. NKS 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
Principal Amount or any other amount payable with respect to the
Notes is set. NKS has no obligation or liability in connection
with the administration, marketing or trading of the Notes.
NKS 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
NKS in connection with the issuance of the Notes. The use of and
reference to the Nikkei 225 Index in connection with the Notes
have been consented to by NKS, the publisher of the Nikkei 225
Index.
None of the Company, the Calculation Agent, the Trustee
under the Senior Debt Indenture or any Agent accepts any
responsibility for the calculation, maintenance or publication of
the Nikkei 225 Index or any Successor Nikkei Index. NKS disclaims
all responsibility for any errors or omissions in the calculation
and dissemination of the Nikkei 225 Index or the manner in which
such index is applied in determining the Indexed Principal Amount
or any other amount payable in respect of the Notes.
HISTORICAL DATA ON NIKKEI 225 INDEX
The following table sets forth the highest and lowest daily
closing price of the Nikkei 225 Index, as published by NKS, for
each quarter during the period from January 1, 1993 through July
27, 1998, as well as the closing price of the Nikkei 225 Index as
of the end of each such quarter or partial quarter. The
historical values of the Nikkei 225 Index should not be taken as
an indication of future performance.
10
<PAGE>
Daily Closing Prices
-----------------------------
Highest Lowest Period
Level Level End
1993: ------- ------ ------
1st Quarter 19048.38 16287.45 18591.45
2nd Quarter 21076.00 18591.45 19590.00
3rd Quarter 21148.11 19590.00 20105.71
4th Quarter 20500.25 16078.71 17417.24
1994:
1st Quarter 20677.77 17369.74 19111.92
2nd Quarter 21552.81 19111.92 20643.93
3rd Quarter 20862.77 19468.89 19563.81
4th Quarter 20148.83 18666.93 19723.06
1995:
1st Quarter 19723.06 15749.77 16139.95
2nd Quarter 17103.69 14507.17 14517.40
3rd Quarter 18758.55 14485.41 17913.06
4th Quarter 20011.76 17337.19 19868.15
1996:
1st Quarter 21406.85 19734.70 21406.85
2nd Quarter 22666.80 21171.82 22530.75
3rd Quarter 22530.75 20107.11 21556.40
4th Quarter 21612.30 19161.71 19361.35
1997:
1st Quarter 19446.00 17303.65 18003.40
2nd Quarter 20681.07 17485.75 20604.96
3rd Quarter 20604.96 17683.27 17887.71
4th Quarter 17842.20 14775.20 15258.74
1998:
1st Quarter 17264.34 14664.44 16527.17
2nd Quarter 16536.66 14715.38 15830.27
3rd Quarter
(through
July 27, 1998) 16731.92 15944.36 15944.36
The closing price of the Nikkei 225 Index on July 27, 1998
was 15944.36.
Since its inception, the Nikkei 225 Index has experienced
significant daily price fluctuations. Any historical upward or
downward trend in the closing level of the Nikkei 225 Index
during any period set forth above is not any indication that the
Nikkei 225 Index is more or less likely to increase or decline at
any time during the term of the Notes.
THE TOKYO STOCK EXCHANGE
The TSE is one of the world's largest securities exchanges
in terms of market capitalization. The TSE is a two-way,
continuous, pure auction market. Trading hours are
11
<PAGE>
currently from 9:00 A.M. to 11:00 A.M. and from 12:30 P.M. to
3:00 P.M., Tokyo time, Monday through Friday.
Due to the time zone difference, on any normal trading day
the TSE will close prior to the opening of business in New York
City on the same calendar day. Therefore, the closing level of
the Nikkei 225 Index on such trading day will generally be
available in the United States by the opening of business on the
same calendar day.
The TSE has adopted certain measures intended to prevent
any extreme short-term price fluctuations resulting from order
imbalances. These include daily price floors and ceilings
intended to prevent extreme fluctuations in individual stock
prices. In general, any stocks listed on the TSE cannot be traded
at a price outside of these limits, which are stated in terms of
absolute amounts of Japanese yen, and not percentage, changes
from the closing price of the stock on the previous day. In
addition, when there is a major order imbalance in a listed
stock, the TSE posts a "special bid quote" or a "special asked
quote" for that stock at a specified higher or lower price level
than the stock's last sale price in order to solicit counter
orders and balance supply and demand for stock. Investors should
also be aware that the TSE may suspend the trading of individual
stocks in certain limited and extraordinary circumstances
including, for example, unusual trading activity in that stock.
As a result, variations in the Nikkei 225 Index may be limited by
price limitations, or by suspension of trading, on individual
stocks which comprise the Nikkei 225 Index which may, in turn,
adversely affect the value of the Notes under certain
circumstances.
DESCRIPTION OF THE S&P 500 INDEX
Unless otherwise stated, all information herein on the S&P
500 Index is derived from S&P or other publicly available
sources. Such information reflects the policies of S&P as stated
in such sources and such policies are subject to change by S&P.
S&P is under no obligation to continue to publish the S&P 500
Index and may discontinue publication of the S&P 500 Index at any
time.
The S&P 500 Index is published by S&P, and is intended to
provide an indication of the pattern of common stock price
movement. The calculation of the value of the S&P 500 Index
(discussed below in further detail) is based on the relative
value of the aggregate Market Value (as defined below) of the
common stocks of 500 companies as of a particular time compared
to the aggregate average Market Value of the common stocks of 500
similar companies during the base period of the years 1941
through 1943. As of May 31, 1998 the 500 companies included in
the S&P 500 Index represented approximately 81% of the aggregate
Market Value of common stocks traded on the NYSE; however, these
500 companies are not the 500 largest companies listed on the
NYSE and not all of these 500 companies are listed on such
exchange. As of May 31, 1998, the aggregate Market Value of the
500 companies included in the S&P 500 Index represented
approximately 73% of the aggregate Market Value of United States
domestic, public companies. S&P chooses companies for inclusion
in the S&P 500 Index with the aim of achieving a distribution by
broad industry groupings that approximates the distribution of
these groupings in the common stock population of the NYSE, which
S&P uses as an assumed model for the composition of the total
market. Relevant criteria employed by S&P include the viability
of the particular company, the extent to which that company
represents the industry group to
12
<PAGE>
which it is assigned, the extent to which the market price of
that company's common stock is generally responsive to changes in
the affairs of the respective industry and the Market Value and
trading activity of the common stock of that company. As of May
31, 1998, the 500 companies included in the S&P 500 Index were
divided into 104 individual groups.
These individual groups comprised the following four main
groups of companies (with the number of companies currently
included in each group indicated in parentheses): Industrials
(379), Utilities (37), Transportation (10) and Financial (74).
S&P may from time to time, in its sole discretion, add companies
to, or delete companies from, the S&P 500 Index to achieve the
objectives stated above.
The S&P 500 index does not reflect the payment of dividends
on the stocks underlying it and therefore the return based on the
Indexed Principal Amount will not produce the same return you
would receive if you were to purchase such underlying stocks and
hold them for a period equal to the maturity of the Notes.
S&P currently computes the S&P 500 Index as of a particular
time as follows:
(a) the product of the market price per share and the
number of then outstanding shares of each component
stock is determined as of such time (such product
referred to as the "Market Value" of such stock);
(b) the Market Value of all component stock as of such
time (as determined under clause (a) above) are
aggregated;
(c) the mean average of the Market Values as of each
week in the base period of the years 1941 through
1943 of the common stock of each company in a group
of 500 substantially similar companies is
determined;
(d) the mean average Market Values of all such common
stocks over such base period (as determined under
clause (c) above are aggregated (such aggregate
amount being referred to as the "Base Value");
(e) the aggregate Market Value of all component stocks
as of such time as determined under clause (b)
above) is divided by the Base Value; and
(f) the resulting quotient (expressed in decimals) is
multiplied by ten.
While S&P currently employs the above methodology to
calculate the S&P 500 Index, no assurance can be given that S&P
will not modify or change such methodology in a manner that may
affect the Indexed Principal Amount, if any, payable to
beneficial owners of Notes upon maturity or otherwise.
S&P adjusts the foregoing formula to negate the effects of
changes in the Market Value of a component stock that are
determined by S&P to be arbitrary or not due to true market
fluctuations. Such changes may result from such causes as the
issuance of stock dividends, the granting to shareholders of
rights to purchase additional shares of such stock, the purchase
of shares by employees pursuant to employee benefit plans,
certain consolidations and acquisitions,
13
<PAGE>
the granting to shareholders of rights to purchase other
securities of the company, the substitution by S&P of particular
component stocks in the S&P 500 Index, and other reasons. In all
such cases, S&P first recalculates the aggregate Market Value of
all component stocks (after taking account of the new market
price per share of the particular component stock or the new
number of outstanding shares thereof or both, as the case may be)
and then determines the New Base Value in accordance with the
following formula:
New Market Value
Old Base Value X -------------------- = New Base Value
Old Market Value
The result is that the Base Value is adjusted in proportion
to any change in the aggregate Market Value of all component
stocks resulting from the causes referred to above to the extent
necessary to negate the effects of such clauses upon the S&P 500
Index.
S&P and the Company have entered into a non- exclusive
license agreement providing for the license to the Company, in
exchange for a fee, of the right to use indices owned and
published by S&P in connection with certain securities, including
the Notes.
The license agreement between S&P and the Company provides
that the following language must be stated in this Pricing
Supplement:
"The Notes are not sponsored, endorsed, sold or
promoted by S&P. S&P makes no representation or warranty,
express or implied, to the Holders of the Notes or any
member of the public regarding the advisability of
investing in securities generally or in the Notes
particularly or the ability of the S&P 500 Index to track
general stock market performance. S&P's only relationship
to the Company (other than transactions entered into in the
ordinary course of business) is the licensing of certain
servicemarks and trade names of S&P and of the S&P 500
Index which is determined, composed and calculated by S&P
without regard to the Company or the Notes. S&P has no
obligation to take the needs of the Company or the Holders
of the Notes into consideration in determining, composing
or calculating the S&P 500 Index. S&P is not responsible
for and has not participated in the determination of the
timing of the sale of the Notes, prices at which the Notes
are to initially be sold, or quantities of the Notes to be
issued or in the determination or calculation of the
equation by which the Notes are to be converted into cash.
S&P has no obligation or liability in connection with the
administration, marketing or trading of the Notes."
"Standard & Poor's(R)", "Standard & Poor's 500", "S&P
500(R)", "S&P(R)" and "500", are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by the Company.
The Notes are not sponsored, endorsed, sold or promoted by
Standard & Poor's or The McGraw Hill Companies, Inc. Neither
Standard & Poor's nor The McGraw Hill Companies, Inc. makes any
representation regarding the advisability of investing in the
Notes.
HISTORICAL DATA ON THE S&P 500 INDEX
The following table sets forth the highest and lowest daily
closing price of the S&P 500 Index, as published by S&P, for each
quarter during the period from January 1, 1993 through
14
<PAGE>
July 27, 1998, as well as the closing price of the S&P 500 Index
as of the end of each such quarter or partial quarter. The
historical values of the S&P 500 Index should not be taken as an
indication of future performance.
Daily Closing Prices
--------------------------
Highest Lowest Period
Level Level End
1993: ------ ----- ------
1st Quarter 456.34 429.05 451.67
2nd Quarter 453.85 433.54 450.53
3rd Quarter 463.56 441.43 458.93
4th Quarter 470.94 457.48 466.45
1994:
1st Quarter 482.00 445.55 445.76
2nd Quarter 462.37 438.92 444.27
3rd Quarter 476.07 446.13 462.71
4th Quarter 473.77 445.45 459.27
1995:
1st Quarter 503.90 459.11 500.71
2nd Quarter 551.07 501.85 544.75
3rd Quarter 586.77 547.09 584.41
4th Quarter 621.69 576.72 615.93
1996:
1st Quarter 661.45 598.48 645.43
2nd Quarter 678.51 631.18 669.12
3rd Quarter 687.33 626.65 687.33
4th Quarter 757.03 689.08 740.74
1997:
1st Quarter 816.29 737.01 757.12
2nd Quarter 898.70 737.65 885.14
3rd Quarter 960.32 891.03 947.28
4th Quarter 983.79 876.98 970.43
1998:
1st Quarter 1105.65 927.69 1101.75
2nd Quarter 1138.49 1077.01 1133.84
3rd Quarter
(through
July 27, 1998) 1186.75 1139.75 1147.27
The closing level of the S&P 500 Index on July 27, 1998 was
1147.27.
Since its inception, the S&P 500 Index has experienced
significant daily price fluctuations. Any historical upward or
downward trend in the closing level of the S&P 500
15
<PAGE>
Index during any period set forth above is not any indication
that the S&P 500 Index is more or less likely to increase or
decline at any time during the term of the Notes.
DESCRIPTION OF ITALIAN LIRA
The lira is the national currency of Italy. Italian bank
notes are issued by The Bank of Italy, which is Italy's central
bank and the sole bank of issue. On July 27, 1998, the noon
buying rate for cable transfers in New York City payable in lira,
as reported by the Federal Reserve Bank of New York, was ITL
1759.00 = $1.00.
The exchange rate between the lira and the U.S. 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 Italy and in the United States,
including economic and political developments in other countries.
Of particular importance are rates of inflation, interest rate
levels, the balance of payments (both on capital and current
account) and the extent of governmental surpluses or deficits in
Italy and in the United States, all of which are in turn
sensitive to the monetary, fiscal and trade policies pursued by
the governments of Italy, 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 Italian lira
have been highly volatile.
TAXATION
The following disclosure supplements, and to the extent
inconsistent therewith, replaces, the disclosure in the
Prospectus Supplement under "Certain United States Federal Income
Tax Considerations":
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 "Certain United States Federal Income Tax
Considerations."
16
<PAGE>
APPENDIX A
LIST OF NIKKEI 225 INDEX UNDERLYING STOCKS
The following is a list of the companies whose stocks
comprised the Nikkei 225 Index as of July 27, 1998.
1. AJINOMOTO CO. INC.
2. ALL NIPPON AIRWAYS CO. LTD.
3. AOKI CORPORATION
4. ASAHI BREWERIES LTD.
5. ASAHI CHEMICAL INDUSTRY CO. LTD.
6. ASAHI DENKA KOGYO K.K.
7. ASAHI GLASS CO. LTD.
8. BANK OF TOKYO-MITSUBISHI LTD.
9. BRIDGESTONE CORPORATION
10. CANON INC.
11. CHICHIBU ONODA
12. CHIYODA CORPORATION
13. CHUBU ELECTRIC POWER
14. CITIZEN WATCH CO. LTD.
15. DAI-ICHI KANGYO BANK LTD.
16. DAINIPPON PRINTING CO. LTD.
17. DAINIPPON PHARMACEUTICAL CO. LTD.
18. DAIWA HOUSE INDUSTRY CO. LTD.
19. DENKI KAGAKU KOGYO K.K.
20. DENSO CORP.
21. DOWA MINING CO. LTD.
22. EBARA CORPORATION
23. FUJI BANK LTD.
24. FUJIBOSEKI
25. FUJI ELECTRIC CO. LTD.
26. FUJI PHOTO FILM CO. LTD.
27. FUJIKURA LTD.
28. FUJITA CORPORATION
29. FUJITSU LTD.
30. FURUKAWA CO. LTD.
31. FURUKAWA ELECTRIC CO. LTD.
<PAGE>
32. HAZAMA CORPORATION
33. HEIWA REAL ESTATE CO. LTD.
34. HINO MOTORS LTD.
35. HITACHI LTD.
36. HITACHI ZOSEN CORPORATION
37. HOKUETSU PAPER MILLS LTD.
38. HONDA MOTOR CO. LTD.
39. HONEN CORPORATION
40. ISAEKI AND CO. LTD.
41. ISHIKAWAJIMA HARIMA HEAVY IND.
42. ISUZU MOTORS LTD.
43. ITOCHU CORPORATION
44. IWATANI INTERNATIONAL CORPORATION
45. JAPAN ENERGY CORPORATION
46. JAPAN STEEL WORKS LTD.
47. JAPAN SYNTHETIC RUBBER CO.
48. KAJIMA CORPORATION
49. KANEBO LTD.
50. KANSAI ELECTRIC POWER CO. INC.
51. KAWASAKI HEAVY IND. LTD.
52. KAWASAKI KISEN KAISHA LTD.
53. KAWASAKI STEEL CORPORATION
54. KEIHIN ELECTRIC EXPRESS RAILWAY CO.
55. KEIO TEITO ELECTRIC RAILWAY CO. LTD
56. KEISEI ELECTRIC RAILWAY CO. LTD.
57. KIKKOMAN CORPORATION
58. KIRIN BREWERY CO. LTD.
59. KOBE STEEL LTD.
60. KOMATSU LTD.
61. KONICA CORPORATION
62. KOYO SEIKO CO. LTD.
63. KUBOTA CORPORATION
64. KUMAGAI GUMI CO. LTD.
65. KURARAY CO. LTD.
66. KYOKUYO CO. LTD.
67. KYOWA HAKKO KOGYO CO. LTD.
2
<PAGE>
68. MARUBENI CORPORATION
69. MARUI CO. LTD.
70. MARUZEN CO. LTD.
71. MATSUSHITA ELECTRIC INDUSTRIAL
72. MAZDA MOTOR CORPORATION
73. MEIDENSHA CORPORATION
74. MEIJI MILK PRODUCTS CO. LTD.
75. MEIJI SEIKA KAISHA LTD.
76. MERCIAN CORPORATION
77. MINEBEA CO. LTD.
78. MITSUBISHI CHEMICAL CORPORATION
79. MITSUBISHI CORPORATION
80. MITSUBISHI ELECTRIC CORPORATION
81. MITSUBISHI ESTATE CO. LTD.
82. MITSUBISHI HEAVY INDUSTRIES
83. MITSUBISHI MATERIALS CORPORATION
84. MITSUBISHI OIL CO. LTD.
85. MITSUBISHI PAPER MILLS LTD.
86. MITSUBISHI RAYON CO. LTD.
87. MITSUBISHI STEEL MANUFACTURING CO.
88. MITSUBISHI TRUST AND BANKING CORP.
89. MITSUBISHI LOGISTICS CORP.
90. MITSUI AND CO. LTD.
91. MITSUI ENG. AND SHIPBUILDING
92. MITSUI MARINE AND FIRE INSUR. CO.
93. MITSUI MINING AND SMELTING LTD.
94. MITSUI MINING CO. LTD.
95. MITSUI O.S.K. LINES LTD.
96. MITSUI REAL ESTATE SALES CO. LTD.
97. MITSUI SOKO CO. LTD.
98. MITSUI TRUST AND BANKING CO. LTD.
99. MITSUKOSHI LTD.
100. MORINAGA AND CO. LTD.
101. NACHI-FUJIKOSHI CORPORATION
102. NAVIX LINE LTD.
103. NEC CORPORATION
3
<PAGE>
104. NEW OJI PAPER CO.
105. NGK INSULATORS LTD.
106. NICHIREI CORPORATION
107. NICHIRO GYOGYO
108. NIHON CEMENT CO. LTD.
109. NIHON DENKO CO. LTD.
110. NIHON SHINPAN CO. LTD.
111. NIIGATA ENGINEERING CO. LTD.
112. NIKKO SECURITIES CO. LTD.
113. NIKON CORPORATION
114. NIPPON BEET SUGAR MANUFACTURING CO.
115. NIPPON CARBIDE INDUSTRIES CO. INC.
116. NIPPON CARBON CO. LTD.
117. NIPPON CHEMICAL INDUSTRIAL CO. LTD.
118. NIPPON EXPRESS CO. LTD.
119. NIPPON FLOUR MILLS CO. LTD.
120. NIPPON KAYAKU CO. LTD.
121. NIPPON LIGHT METAL CO. LTD.
122. NIPPON METAL INDUSTRY CO. LTD.
123. NIPPON OIL CO. LTD.
124. NIPPON PAPER IND. CO. LTD.
125. NIPPON PISTON RING CO. LTD.
126. NIPPON SHARYO LTD.
127. NIPPON SHEET GLASS CO. LTD.
128. NIPPON SODA CO. LTD.
129. NIPPON STEEL CORPORATION
130. NIPPON SUISAN KAISHA LTD.
131. NIPPON TELEGRAPH AND TELEPHONE NTT
132. NIPPON YAKIN KOGYO
133. NIPPON YUSEN K.K.
134. NISSAN CHEMICAL INDUSTRIES LTD.
135. NISSAN MOTOR CO. LTD.
136. NISSHIN FLOUR MILLING CO. LTD.
137. NISSHIN OIL MILLS LTD.
138. NISSHINBO INDUSTRIES INC.
139. NISSHO IWAI CORPORATION
4
<PAGE>
140. NISSHOKIN
141. NITTO BOSEKI CO. LTD.
142. NKK CORPORATION
143. NOF CORPORATION
144. NOMURA SECURITIES CO. LTD.
145. NORITAKE CO. LTD.
146. NSK LTD.
147. NTN CORPORATION
148. OBAYASHI CORPORATION
149. ODAKYU ELECTRIC RAILWAY
150. OKI ELECTRIC INDUSTRY CO. LTD.
151. OKUMA CORPORATION
152. OSAKA GAS CO. LTD.
153. PIONEER ELECTRONIC CORPORATION
154. RASA INDUSTRIES LTD.
155. RICOH COMPANY LTD.
156. SAKURA BANK LTD.
157. SANKYO CO. LTD.
158. SANKYU INC.
159. SANWA BANK LTD.
160. SANYO ELECTRIC CO. LTD.
161. SAPPORO BREWERIES LTD.
162. SATO KOGYO CO. LTD.
163. SEIKA CORPORATION
164. SHARP CORPORATION
165. SHIMIZU CORPORATION
166. SHIMURA KAKO CO.
167. SHINETSU CHEMICAL CO. LTD.
168. SHINAGAWA REFRACTORIES CO. LTD.
169. SHIONOGI AND CO. LTD.
170. SHOWA DENKO K.K.
171. SHOWA ELECTRIC WIRE AND CABLE CO. LTD.
172. SHOWA LINE LTD.
173. SHOWA SHELL SEKIYU K.K.
174. SONY CORPORATION
175. SUMITOMO BANK LTD.
5
<PAGE>
176. SUMITOMO CEMENT CO. LTD.
177. SUMITOMO CHEMICAL CO. LTD.
178. SUMITOMO COAL MINING CO. LTD.
179. SUMITOMO CORPORATION
180. SUMITOMO ELECTRIC IND. LTD.
181. SUMITOMO HEAVY INDUSTRIES, LTD.
182. SUMITOMO METAL INDUSTRIES LTD.
183. SUMITOMO METAL MINING CO. LTD.
184. SUZUKI MOTOR CORPORATION
185. TAISEI CORPORATION
186. TAKARA SHUZO
187. TAKEDA CHEMICAL INDUSTRIES
188. TEIJIN LTD.
189. TEIKOKU OIL
190. TEKKEN CORPORATION
191. TOA CORPORATION
192. TOAGOSEI CHEMICAL INDUSTRY
193. TOBISHIMA CORPORATION
194. TOBU RAILWAY
195. TOEI CO.
196. TOHO RAYON
197. TOHO ZINC CO. LTD.
198. TOKAI CARBON CO. LTD.
199. TOKIO MARINE AND FIRE INSUR. CO.
200. TOKYO DOME CORPORATION
201. TOKYO ELECTRIC POWER CO. INC.
202. TOKYO GAS CO. LTD.
203. TOKYO ROPE MFG.
204. TOKYO TIRE AND RUBBER
205. TOKYU CORPORATION
206. TOKYU DEPARTMENT STORE
207. TOMEN CORPORATION
208. TONEN CORPORATION
209. TOPPAN PRINTING CO. LTD.
210. TOPY INDUSTRIES
211. TORAY INDUSTRIES
6
<PAGE>
212. TOSHIBA CORPORATION
213. TOSOH CORPORATION
214. TOTO LTD.
215. TOYO SEIKAN KAISHA
216. TOYOBO CO. LTD.
217. TOYOTA MOTOR CORPORATION
218. UBE CHEMICAL INDUSTRIES
219. UNITIKA LTD.
220. YAMAHA CORPORATION
221. YAMANOUCHI PHARMACEUTICAL
222. YASUDA FIRE AND MARINE INSURANCE CO.
223. YOKOGAWA ELECTRIC
224. YOKOHAMA RUBBER
225. YUASA CORPORATION
7
<PAGE>
APPENDIX B
LIST OF FTSE EUROTOP 100-INDEX(R) UNDERLYING STOCKS
The following is a list of the 100 companies whose stocks
comprised the FTSE Eurotop 100-Index(R) as of July 27, 1998.
UNITED KINGDOM
1. ABBEY NATIONAL
2. B.A.T. INDUSTRIES
3. BG
4. BTR
5. BARCLAYS BANK
6. BASS
7. BRITISH AEROSPACE
8. BRITISH AIRWAYS
9. BRITISH PETROLEUM CO.
10. BRITISH SKY BROADCASTING GR.
11. BRITISH STEEL
12. BRITISH TELECOM
13. CABLE & WIRELESS
14. DIAGEO PLC
15. GENERAL ELECTRIC CO
16. GLAXO WELLCOME
17. GRANADA GROUP
18. HSBC HOLDINGS
19. IMPERIAL CHEMICAL IND.
20. LLOYDS TSB PLC
21. MARKS & SPENCER
22. NAT WESTMINISTER BANK
23. NATIONAL POWER
24. PRUDENTIAL CORPORATION PLC
25. REED INTERNATIONAL
26. REUTERS GROUP
27. RIO TINTO PLC
28. ROYAL & SUN ALLIANCE
29. SAINSBURY(J) PLC
30. SHELL TRANSPORT & TRADING
31. SMITHKLINE BEECHAM
32. STANDARD CHARTERED
33. TESCO
34. UNILEVER PLC
35. VODAFONE GROUP
36. ZENECA
GERMANY
1. ALLIANZ
2. BASF
<PAGE>
3. BMW ST
4. BAYER
5. COMMERZBANK
6. DAIMLER-BENZ
7. DEUTSCHE BANK
8. HOECHST
9. MANNESMANN
10. RWE ST
11. SAP VZ
12. SIEMENS
13. THYSSEN
14. VEBA
15. VOLKSWAGEN ST
FRANCE
1. AXA-UAP
2. ALCATEL ALSTHOM CGE
3. CARREFOUR
4. ELF-AQUITAINE
5. DANONE
6. L'OREAL
7. LVMH
8. RHONE POULENC - A -
9. SAINT GOBAIN
10. SOCIETE GENERALE
11. TOTAL B
12. VIVENDI
SWITZERLAND
1. ABB (I)
2. ALUSUISSE (N)
3. CIBA SPECIALITY
4. CREDIT SUISSE HOLDING (N)
5. NESTLE (N)
6. NOVARTIS (N)
7. ROCHE (GS)
8. SBV (N)
9. SWISS REINSURANCE (N)
10. UBS AG (I)
11. ZURICH VERSICHERUNGEN (N)
THE NETHERLANDS
1. ABN AMRO BANK
2. AEGON NV
3. AHOLD
4. AKZO NOBEL
5. ELSEVIER
6. ING GROUP (CRT)
7. ROYAL PHILIPS ELECTRONICS
2
<PAGE>
8. ROYAL DUTCH PETROLEUM
9. UNILEVER (CRT)
ITALY
1. ASSICURAZIONI GENERALI
2. ENI
3. FIAT
4. MONTEDISON
5. TELECOM ITALIA
6. TELECOM ITALIA MOBILE
SPAIN
1. ENDESA
2. IBERDROLA
3. REPSOL
4. TELEFONICA
SWEDEN
1. ASTRA (AFR)
2. ERICSSON (BFR)
3. INVESTOR BFR
4. S-E BANKEN (AFR)
5. VOLVO (BFR)
BELGIUM
1. ELECTRABEL
2. FORTIS AG
3. PETROFINA
