<PAGE> 1
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) June 8, 1998
Salomon Smith Barney Holdings Inc. TARGETS Trust I
(Exact name of registrant as specified in its charter)
Delaware Delaware
(State or other (State or other
jurisdiction of jurisdiction of
incorporation or incorporation or
organization) organization)
1-4346 1-4346-2
(Commission (Commission
File Number) (File Number)
22-1660266 13-4000891
(IRS Employer (IRS Employer
Identification No.) (Identification No.)
388 Greenwich Street, New York, NY 10013
(Address of principal executive offices) (Zip Code)
(212) 816-6000
(Registrants' telephone number, including area code)
<PAGE> 2
SALOMON SMITH BARNEY HOLDINGS INC.
TARGETS TRUST I
CURRENT REPORT ON FORM 8-K
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits:
Exhibit No. Description
1.01 Underwriting Agreement, dated as of June 8, 1998,
among TARGETS Trust I, Salomon Smith Barney Holdings
Inc. and Smith Barney Inc., as underwriter, relating
to the offer and sale of the Targeted Growth Enhanced
Securities (TARGETS(R)) of TARGETS Trust I with
respect to the Common Stock of Cisco Systems, Inc.
2
<PAGE> 3
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: June 9, 1998 SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ Mark I. Kleinman
---------------------------
Mark I. Kleinman
Deputy Treasurer
3
<PAGE> 4
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: June 9, 1998 TARGETS TRUST I
By: /s/ Michael J. Day
--------------------------
Michael J. Day
Regular Trustee
4
<PAGE> 1
[Execution Copy]
Exhibit 1.01
1,451,871 TARGETS
TARGETS TRUST I
Targeted Growth Enhanced Terms Securities (TARGETS(R))
With Respect to the Common Stock of
Cisco Systems, Inc.
Due on August 15, 2000
fully and unconditionally guaranteed to the extent set forth
in the Prospectus dated June 9, 1998 by
SALOMON SMITH BARNEY HOLDINGS INC.
UNDERWRITING AGREEMENT
June 8, 1998
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
TARGETS Trust I (the "Trust"), a statutory business trust organized
under the Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Business Code, 12 Del. C. Section 3801 et
seq.), proposes, upon the terms and conditions set forth herein, to issue and
sell 1,451,871 of its Targeted Growth Enhanced Terms Securities (TARGETS(R))
(the "TARGETS") to you, as underwriter (the "Underwriter").
The TARGETS are to be issued pursuant to the terms of a declaration of
trust, dated as of January 30, 1998, as amended and restated as of June 12, 1998
(the "Declaration"), among Salomon Smith Barney Holdings Inc., a Delaware
corporation (the "Company" and, together with the Trust, the "Offerors"), as
sponsor, the trustees named therein (the "TARGETS Trustees") and the holders
from time to time of undivided beneficial interests in the assets of the Trust.
The Declaration is qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
The TARGETS represent undivided beneficial ownership interests in the
assets of the Trust. The assets of the Trust will consist solely of (i) a
forward contract with respect to the Common Stock of Cisco Systems, Inc.
purchased by the Trust from the Company (the "Forward Contract") and (ii) a
portfolio of stripped U.S. treasury securities (the "Treasury Securities"). The
Company and The Chase Manhattan Bank, a New York banking association, as
Guarantee Trustee (the "Guarantee Trustee"), are to enter into the TARGETS
Guarantee Agreement dated as of June 12, 1998 (the "Guarantee Agreement") with
respect to the TARGETS. The Guarantee Agreement, when taken together with the
Forward Contract and the Company's obligation to pay all fees and expenses of
the Trust, constitutes a full and unconditional guarantee by the Company of all
payments to be made to the holders of the TARGETS. The TARGETS, the Guarantee
and the Forward Contract are hereinafter collectively referred to as the
"Securities."
The Offerors wish to confirm as follows their agreement with you, in
connection with your purchase of the TARGETS as the Underwriter.
<PAGE> 2
1. Representations and Warranties. The Offerors represent and warrant
to, and agree with, you as set forth below in this Section 1.
(a) A registration statement on Form S-3 (File No. 333-45529),
including a prospectus, relating to the Securities has been prepared by the
Company in conformity in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Act"), the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission and has become
effective. Such registration statement and prospectus may have been amended or
supplemented from time to time prior to the date of this Agreement; any such
amendment to the Registration Statement was so prepared and filed and any such
amendment has become effective. Copies of such registration statement and
prospectus, any such amendment or supplement and all documents incorporated by
reference therein which were filed with the Commission on or prior to the date
hereof have been delivered to you. Such registration statement and prospectus,
as amended or supplemented to the date hereof, are hereinafter collectively
referred to as the "Registration Statement" and the "Prospectus," respectively.
Any references herein to the Registration Statement or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
which were filed with the Commission on or prior to the date hereof, and any
reference to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing of any document with the Commission deemed to be incorporated by
reference therein after the date hereof.
(b) The Registration Statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, the
Registration Statement and the Prospectus, as of the date hereof and at the
Closing Date (as hereinafter defined), and any amendment or supplement thereto,
conformed or will conform in all material respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations; and no such document
included or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; except that the foregoing shall not
apply to (i) statements or omissions from any such document in reliance upon,
and in conformity with, written information furnished to the Company by you or
on your behalf, specifically for use in the preparation thereof or (ii) that
part of the Registration Statement which shall constitute Statements of
Eligibility (Forms T-1) under the Trust Indenture Act of each of the
Institutional Trustee, the Guarantee Trustee and the Delaware Trustee.
(c) The documents incorporated by reference in the Registration
Statement or Prospectus, when they became effective or were filed with the
Commission, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), conformed and any documents so filed and
incorporated by reference after the date hereof will, when they are filed with
the Commission, conform, in all material respects to the requirements of the Act
and the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Trust
agrees to sell to you, as Underwriter, and you, as Underwriter, agree, to
purchase from the Trust, at a purchase price of $38.75 per TARGET, plus accrued
distributions, if any, from June 12, 1998, 1,451,871 TARGETS.
(b) The Company agrees that, in view of the fact that the proceeds of
the sale of the TARGETS will be invested in the Forward Contract, it shall pay
to you, as Underwriter, as
2
<PAGE> 3
compensation ("Underwriter Compensation") for your arranging the investment of
the proceeds therein, on the Closing Date (as hereinafter defined), $0.96875 per
TARGET.
3. Delivery and Payment. Delivery of and payment for the TARGETS shall
be made at 10:00 AM, New York City time, on June 12, 1998, or at such time on
such later date not more than three Business Days after the foregoing date as
you shall designate (such date and time of delivery and payment for the TARGETS
being herein referred to as the "Closing Date"). Delivery of the TARGETS shall
be made to you, as Underwriter, for your account against payment by you, as
Underwriter, of the purchase price thereof to or upon the order of the Company
by wire transfer payable in same-day funds to an account specified by the
Company. Delivery of the TARGETS shall be made through the facilities of The
Depository Trust Company unless you shall otherwise instruct.
4. Agreements of the Offerors. The Offerors jointly and severally agree
with you, as Underwriter, as follows:
(a) The Offerors will cause the Prospectus to be filed pursuant to Rule
424 under the Act and will notify you promptly of such filing. During the period
in which a prospectus relating to the TARGETS is required to be delivered under
the Act, the Offerors will notify you promptly of the time when any amendment to
the Registration Statement has become effective or any subsequent supplement to
the Prospectus has been filed and of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for additional information; the Offerors will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus, which, in your opinion, may be necessary
or advisable in connection with the distribution of the TARGETS by you, as
Underwriter; the Offerors will file no amendment or supplement to the
Registration Statement or the Prospectus (other than any document required to be
filed under the Exchange Act which upon filing is deemed to be incorporated by
reference therein) to which you shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the filing; and
the Offerors will furnish to you at or prior to the filing thereof a copy of any
such prospectus supplement or any document which upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus.
(b) The Offerors will advise you, promptly after either of them shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the TARGETS for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and they will promptly use their respective best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(c) Within the time during which a prospectus relating to the TARGETS
is required to be delivered under the Act, the Offerors will comply with all
requirements imposed upon the Offerors by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the TARGETS as
contemplated by the provisions hereof and the Prospectus. If during such period
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or the Prospectus to
comply with the Act, the Offerors will promptly notify you and you will amend or
supplement the Registration
3
<PAGE> 4
Statement or the Prospectus (at the expense of the Offerors) so as to correct
such statement or omission or effect such compliance.
(d) The Offerors will use their respective best efforts to qualify the
TARGETS for sale under the securities laws of such jurisdictions as you
reasonably designate, to maintain such qualifications in effect so long as
required for the distribution of the TARGETS and, if requested by you, as
Underwriter, to arrange for the determination of the legality of the TARGETS for
purchase by institutional investors, except that neither the Company nor the
Trust shall be required in connection therewith to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to general or unlimited service of process in any jurisdiction where
it is not now so subject.
(e) The Offerors will furnish to you, as Underwriter, copies of the
Registration Statement and the Prospectus (including all documents incorporated
by reference therein), and all amendments and supplements to the Registration
Statement or the Prospectus which are filed with the Commission during the
period in which a prospectus relating to the TARGETS is required to be delivered
under the Act (including all documents filed with the Commission during such
period which are deemed to be incorporated by reference therein), in each case
in such quantities as you may from time to time reasonably request.
(f) The Company will make generally available to its security holders
and to you as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings statement
(which need not be audited) of the Company covering a 12-month period beginning
after the date upon which the Prospectus is filed pursuant to Rule 424 under the
Act, which shall satisfy the provisions of Section 11(a) of the Act.
(g) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses incident
to the performance of the Offerors' obligations hereunder, including, without
limiting the generality of the foregoing, all costs, taxes and expenses incident
to the issue and delivery of the Securities, all fees and expenses of the
Offerors' counsel and accountants, and all costs and expenses incident to the
preparing, printing, filing and distributing of all documents relating to the
offering, and will reimburse you, as Underwriter, for any expenses (including
fees and disbursements of counsel) incurred by you in connection with the
matters referred to in Section 4(d) hereof and the preparation of memoranda
relating thereto, for any filing fee of the National Association of Securities
Dealers, Inc. relating to the TARGETS, and for any fees charged by investment
rating agencies for rating the TARGETS. If the sale of TARGETS provided for in
this Agreement is not consummated by reason of any failure, refusal or inability
on the part of the Offerors to perform any agreement on its part to be
performed, or because any other condition of the Underwriter's obligations
hereunder required to be fulfilled by the Offerors is not fulfilled, the Company
will reimburse you, as Underwriter, for all reasonable out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by you, as
Underwriter, in connection with the proposed purchase and sale of the TARGETS.
(h) Each of the Trust and the Company agree, during the period
beginning on the date of this Agreement and continuing to and including the
Closing Date, not to offer, sell, contract to offer, sell or otherwise dispose
of any TARGETS or any other securities (including any backup undertakings for
such securities) of the Company or of the Trust, in each case that are
substantially similar to the TARGETS, or any securities convertible into or
exchangeable for the TARGETS or such substantially similar securities of either
the Trust or the Company, without the prior written consent of Smith Barney Inc.
4
<PAGE> 5
5. Conditions of Underwriter's Obligations. The obligations of you, as
Underwriter, to purchase and pay for the TARGETS as provided herein shall be
subject to the accuracy, as of the date of this Agreement and the Closing Date
(as if made at the Closing Date), of the representations and warranties of the
Offerors herein, to the performance by the Offerors of their obligations
hereunder, and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company, the Trust or the
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective change,
in or affecting particularly the business or properties of the Company or its
subsidiaries which, in your judgment, materially impairs the investment quality
of the TARGETS; (ii) any downgrading in the rating of the TARGETS or the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (iv) any banking moratorium declared by Federal
or New York authorities; or (v) any outbreak or escalation of major hostilities
in which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if, in
your judgment, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the TARGETS.
(c) You shall have received an opinion, dated the Closing Date, of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Offerors,
substantially in the form attached hereto as Exhibit A.
(d) You shall have received an opinion, dated the Closing Date, of Joan
Guggenheimer, Deputy General Counsel of the Company, substantially in the form
attached hereto as Exhibit B.
(e) You shall have received an opinion, dated the Closing Date, of
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to the Company and
the Trust, substantially in the form attached hereto as Exhibit C.
(f) You shall have received an opinion, dated the Closing Date, of
Thacher Profitt & Wood, counsel to Chase, substantially in the form attached
hereto as Exhibit D.
(g) You shall have received from Cleary, Gottlieb, Steen & Hamilton,
counsel for the Underwriter, such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus and other related matters as you may reasonably
require, and the Trust and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(h) The Company and the Trust shall each have furnished to you a
certificate, dated the Closing Date, and, in the case of the Company, signed by
either Co-Chairman of the Board, any Vice Chairman, the Chief Financial Officer,
the Treasurer, the Deputy Treasurer or any Vice President and by the Controller
or principal financial or accounting officer of the Company, and, in the case of
the Trust, signed by one of the Regular Trustees, to the effect that each
signatory of
5
<PAGE> 6
such certificate has carefully examined the Registration Statement, as amended
as of the date of such certificate, the Prospectus, as amended and supplemented
as of the date of such certificate, and this Agreement and that:
(i) the representations and warranties of the Company or the
Trust, as the case may be, in this Agreement are true and correct on
and as of the Closing Date with the same effect as if made on the
Closing Date, and the Company and the Trust, as the case may be, has
complied in all material respects with all the agreements and satisfied
all the conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or, to their knowledge, threatened;
(iii) the Registration Statement, including any supplements or
amendments thereto, do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; the
Prospectus, including any supplements or amendments thereto, does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and since the effective date of the
Registration Statement there has not occurred any event concerning
which information is required to be contained in an amended or
supplemented Prospectus concerning which such information is not
contained therein; and
(iv) there have been no material adverse changes in the
general affairs of the Company and its subsidiaries taken as a whole or
the Trust or in their financial position as shown by information
contained in the Registration Statement and the Prospectus, other than
changes disclosed in or contemplated by the Registration Statement and
the Prospectus.
(i) Coopers & Lybrand L.L.P. or another nationally recognized
independent accounting firm, shall have furnished to you a letter or letters,
dated the Closing Date, substantially in the form heretofore approved by you.
(j) The TARGETS shall have been registered under the Exchange Act and
shall have been listed or approved for listing, upon notice of issuance, on the
Chicago Board Options Exchange.
(k) Prior to the Closing Date, the Company shall have furnished to you
such further information, certificates and documents as you may reasonably
request.
6. Indemnification and Contribution. (a) Each of the Trust and the
Company will jointly and severally indemnify and hold harmless you, as
Underwriter, against any losses, claims, damages or liabilities, joint or
several, to which you, as Underwriter, may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and will reimburse you, as
Underwriter, for any legal or other expenses reasonably incurred by you in
connection with investigating or defending against such loss, claim damage,
liability or action; provided, however, that neither of
6
<PAGE> 7
the Offerors shall be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Offerors by or on behalf of you, as Underwriter, specifically for use in the
preparation thereof.
(b) You, as Underwriter, will indemnify and hold harmless each of the
Trust and the Company against any losses, claims, damages or liabilities to
which the Trust or the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made therein in reliance upon and in conformity
with written information furnished to the Offerors by or on behalf of you, as
Underwriter, specifically for use in the preparation thereof, and will reimburse
the Trust and the Company for any legal or other expenses reasonably incurred by
the Trust and the Company in connection with investigating or defending against
any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnified party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Offerors on the one hand and you, as Underwriter, on the other from the
offering of the TARGETS, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Offerors on the one hand and you, as Underwriter, on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Offerors on the one hand
and you, as Underwriter, on the other shall be deemed to be in the same
proportion as the total proceeds from the offering of the TARGETS (before
deducting expenses) received by the Trust bear to the total amount of
Underwriter Compensation received by you, as Underwriter, in each case as set
7
<PAGE> 8
forth in the Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Offerors or you, as Underwriter, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Offerors and you, as Underwriter, agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim (which
shall be limited as provided in subsection (c) above if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), you, as Underwriter, shall be required to
contribute any amount in excess of the amount by which the total price at which
the TARGETS underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which you, as Underwriter, has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
subsection (d) of the notice of the commencement of any action against such
party in respect of which a claim for contribution may be made against an
indemnifying party under this subsection (d), such indemnified party shall
notify the indemnifying party in writing of the commencement thereof if the
notice specified in subsection (c) above has not been given with respect to such
action; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under this subsection (d).
(e) The obligations of the Offerors under this Section 6 shall be in
addition to any liability which the Offerors may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Underwriter within the meaning of the Act or the Exchange Act; and the
obligations of you, as Underwriter, under this Section 6 shall be in addition to
any liability which you, as Underwriter, may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company (including
any person who, with his consent, is named in the Registration Statement as
about to become a director of the Company), to each officer of the Company and
TARGETS Trustee who has signed the Registration Statement, and to each person,
if any, who controls the Company or the Trust within the meaning of the Act or
the Exchange Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company or the Trust herein or
in certificates delivered pursuant hereto, and the agreements of you, as
Underwriter, contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of you, as
Underwriter, or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, or the Trust or the TARGETS Trustees and
shall survive delivery of and payment for the TARGETS.
8. Termination of Agreement. You shall have the right to terminate this
Agreement by giving notice as hereinafter specified at any time at or prior to
the Closing Date if (i) the Company or the Trust shall have failed, refused or
been unable, at or prior to the Closing Date, to perform, in any material
respect, any agreement on its part to be performed hereunder, or (ii) any other
8
<PAGE> 9
condition of the Underwriter's obligations is not fulfilled in all material
respects. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(g) and Section 6 shall at
all times be effective. If you elect to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by you by telephone,
telecopy or telegram, confirmed by letter.
9. Notices. Except as otherwise provided herein, notice given pursuant
to any provision of this Agreement shall be in writing and shall be delivered
(i) if to the Offerors, to the Company, or to the Trust care of the Company, at
the office of the Company at 388 Greenwich Street, New York, New York 10013,
Attention: Treasurer; or (ii) if to you, as Underwriter, care of Smith Barney
Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager,
Investment Banking Division.
10. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company, the Trust and the Underwriter and their respective
successors and the controlling persons, officers and directors referred to in
Section 6 hereof, and no other person shall have any right or obligation
hereunder.
11. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
12. Counterparts. This Agreement may be executed by one or more of you,
the Company and the Trust in one or more counterparts, each of which shall
constitute an original and all of which taken together shall constitute one and
the same Agreement.
9
<PAGE> 10
Please confirm that the foregoing correctly sets forth the agreement
among the Trust, the Company and the Underwriter.
Very truly yours,
TARGETS TRUST I
By /s/ Michael J. Day
Michael J. Day
as Regular Trustee
By /s/ Charles W. Scharf
Charles W. Scharf
as Regular Trustee
SALOMON SMITH BARNEY HOLDINGS INC.
By /s/ Mark I. Kleinman
Name: Mark I. Kleinman
Title: Deputy Treasurer
Confirmed as of the date first above mentioned.
SMITH BARNEY INC., as Underwriter
By /s/Edward Watson
Name: Edward Watson
Title: Director
10
