Pricing Supplement No. Euro H002 Dated 03/27/98 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 30 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 10,000,000,000
Issue Price: 91.80%
Proceeds to Company on original issuance: ITL 9,180,000,000
Commission or Discount on original issuance: USD 15,562.50
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: 03/31/98
Stated Maturity: 03/31/2004
Specified Currency:
(If other than U.S. Dollars)
Authorized Denominations: ITL 1,000,000
(If other than as set forth in the Prospectus Supplement)
Interest Payment Dates:
Accrue to Pay: | | Yes |X| No
Indexed Principal Note: |X| Yes (See Attached) | | No
Type of Interest on Note: | | Fixed Rate | | Floating Rate | | Indexed Rate
(See Attached)
Interest Rate (Fixed Rate Notes): None. See attached.
Initial Interest Rate (Floating Rate Notes): N.A.
Base Rate: | | CD Rate | | Commercial Paper Rate | | Federal Funds Rate
| | LIBOR Telerate | | LIBOR Reuters | | Treasury Rate
| | Treasury Rate Constant Maturity | | Other (See Attached)
Calculation Agent (If other than Citibank): | | Salomon Brothers
|X| Other (See Attached)
Computation of Interest: | | 30 over 360 | | Actual over Actual
| | Actual over 360 | | Other (See Attached)
(If other than as set forth in the Prospectus Supplement)
Interest Reset Dates: N.A.
Rate Determination Dates: N.A.
(If other than as set forth in the Prospectus Supplement)
Index Maturity: N.A.
Spread (+/-): N.A.
Spread Multiplier: N.A.
Change in Spread, Spread Multiplier or Fixed Interest Rate prior to
Stated Maturity: | | Yes (See Attached) |X| No
Maximum Interest Rate: N.A.
Minimimum Interest Rate: N.A.
Amortizing Note: | | Yes (See Attached) |X| No
Optional Redemption: | | Yes |X| No
Optional Redemption Dates:
Redemption Prices:
Redemption: | | In whole only and not in part | | May be in whole or in part
Optional Repayment: | | Yes |X| No
Optional Repayment Dates:
Optional Repayment Prices:
Discount Note: | | Yes |X| No
Total Amount of OID:
Yield to Maturity:
Listed on Luxembourg Stock Exchange: | | Yes |X| No
Common Code: 008326525
ISIN: XS0083265255
Cusip: 99315W9B9
Pricing Supplement No. Euro H002 dated March 27, 1998
(to Prospectus dated December 1, 1997 and
Prospectus Supplement December 5, 1997)
Medium Term Notes, Series H
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 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 the Original Issue Date
and Stated Maturity. As described more fully below under "Indexed
Principal," if the arithmetic average of the published closing
prices of any of the Nikkei 225 Index, the FT-SE(R) 100 Share
Index or the Standard & Poor's 500 Index (each of which equity
indexes is described more fully below) on the 27th of each month
during any of the three successive twenty-four-month periods
commencing April 1, 1998 (or, if any such date is not a Business
Day, the next succeeding Business Day) exceeds a reference level
determined by the Calculation Agent based upon the closing value
of each such index on a specified date in March of the calendar
year during which each twenty-four-month period commences, 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 any such twenty-four-month period 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.
<PAGE>
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) London,
England or (iv) Milan, Italy.
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 [(40% TIMES N) PLUS (30% TIMES F)
PLUS (30% TIMES S)]]; 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).
"N" MEANS N1 PLUS N2 PLUS N3; where
"N1" means 0.8 times the greater of zero and
[(NA1/NB1) minus 1]
"N2" means 0.8 times the greater of zero and
[(NA2/NB2) minus 1]
"N3" means 0.8 times the greater of zero and
[(NA3/NB3) minus 1]
where:
NA1 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 27th
of each month from and including April 1998 through and including
March 2000 (or, if any such date is not a Business Day, the next
succeeding Business Day).
NA2 means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the Nikkei 225 Index,
as published by NKS, on the 27th of each month from and including
April 2000 through and including March 2002 (or, if any such date
is not a Business Day, the next succeeding Business Day).
NA3 means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the Nikkei 225 Index,
as published by NKS, on the 27th of each month from and
2
<PAGE>
including April 2002 through and including March 2004 (or, if any
such date is not a Business Day, the next succeeding Business
Day).
NB1 means the closing price of the Nikkei 225 Index, as
published by NKS, on March 27, 1998 (or, if such date is not a
Business Day, the next succeeding Business Day).
NB2 means the closing price of the Nikkei 225 Index, as
published by NKS, on March 27, 2000 (or, if such date is not a
Business Day, the next succeeding Business Day).
NB3 means the closing price of the Nikkei 225 Index, as
published by NKS, on March 27, 2002 (or, if such date is not a
Business Day, the next succeeding Business Day).
"F" MEANS F1 PLUS F2 PLUS F3; where
"F1" means 0.8 times the greater of zero and
[(FA1/FB1) minus 1]
"F2" means 0.8 times the greater of zero and
[(FA2/FB2) minus 1]
"F3" means 0.8 times the greater of zero and
[(FA3/FB3) minus 1]
FA1 means the arithmetic average, as determined by the
Calculation Agent, of the Official Index Closing Prices of the
FT-SE(R) 100 Share Index, as published by FTSE International
Limited ("FTSE"), on the 27th of each month from and including
April 1998 through and including March 2000 (or, if any such date
is not a Business Day, the next succeeding Business Day).
FA2 means the arithmetic average, as determined by the
Calculation Agent, of the Official Index Closing Prices of the
FT-SE(R) 100 Share Index, as published by FTSE, on the 27th of
each month from and including April 2000 through and including
March 2002 (or, if any such date is not a Business Day, the next
succeeding Business Day).
FA3 means the arithmetic average, as determined by the
Calculation Agent, of the Official Index Closing Prices of the
FT-SE(R) 100 Share Index, as published by FTSE, on the 27th of
each month from and including April 2002 through and including
March 2004 (or, if any such date is not a Business Day, the next
succeeding Business Day).
FB1 means the Official Index Closing Price of the FT-SE(R)
100 Share Index, as published by FTSE, on March 27, 1998 (or, if
such date is not a Business Day, the next succeeding Business
Day).
FB2 means the Official Index Closing Price of the FT-SE(R)
100 Share Index, as published by FTSE, on March 27, 2000 (or, if
such date is not a Business Day, the next succeeding Business
Day).
FB3 means the Official Index Closing Price of the FT-SE(R)
100 Share Index, as published by FTSE, on March 27, 2002 (or, if
such date is not a Business Day, the next succeeding Business
Day).
3
<PAGE>
"S" means S1 plus S2 plus S3; where
"S1" means 0.8 times the greater of zero and
[(SA1/SB1) minus 1]
"S2" means 0.8 times the greater of zero and
[(SA2/SB2) minus 1]
"S3" means 0.8 times the greater of zero and
[(SA3/SB3) minus 1]
where:
SA1 means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the Standard & Poor's
500 Index (the "S&P 500 Index") as published by Standard & Poor's
("S&P"), a Division of the McGraw Hill Companies, Inc., on the
27th of each month from and including April 1998 through and
including March 2000 (or, if any such date is not a Business Day,
the next succeeding Business Day).
SA2 means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the S&P 500 Index, as
published by S&P, on the 27th of each month from and including
April 2000 through and including March 2002 (or, if any such date
is not a Business Day, the next succeeding Business Day).
SA3 means the arithmetic average, as determined by the
Calculation Agent, of the closing prices of the S&P 500 Index, as
published by S&P, on the 27th of each month from and including
April 2002 through and including March 2004 (or, if any such date
is not a Business Day, the next succeeding Business Day).
SB1 means the closing price of the S&P 500 Index, as
published by S&P, on March 27, 1998 (or, if such date is not a
Business Day, the next succeeding Business Day).
SB2 means the closing price of the S&P 500 Index, as
published by S&P, on March 27, 2000 (or, if such date is not a
Business Day, the next succeeding Business Day).
SB3 means the closing price of the S&P 500 Index, as
published by S&P, on March 27, 2002 (or, if such date is not a
Business Day, the next succeeding Business Day).
SUCCESSOR INDEXES
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.
4
<PAGE>
If FTSE discontinues publication of the FT-SE(R) 100 Share
Index and publishes a successor or substitute index that the
Company determines, in its sole discretion, to be comparable to
the FT-SE(R) 100 Share Index (any such successor or substitute
index being hereinafter referred to as a "Successor FTSE Index"),
then the Indexed Principal Amount shall be determined by the
Calculation Agent, on behalf of the Company, based on such
Successor FTSE Index. In the event that the FT-SE(R) 100 Share
Index or any Successor FTSE 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 FT-SE(R)
100 Share Index as of the Original Issue Date of the Notes using
the closing values of appropriate securities traded on the London
Stock Exchange Limited (the "LSE"), 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 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 Nikkei 225 Index or any
Successor Nikkei Index by NKS or any other publisher thereof,
(ii) the FT-SE(R) 100 Share Index or any Successor FTSE Index by
FTSE 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 March 31, 2004. If
Stated Maturity would otherwise be a day that is not a Business
Day, Stated Maturity shall be postponed to the next succeeding
Business Day.
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
5
<PAGE>
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 6.25% 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 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
March 25, 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 March 25, 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 March 25, 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
6
<PAGE>
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 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.
7
<PAGE>
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 March
25, 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.
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 (through
March 25, 1998) 17264.34 14664.44 16658.34
The closing price of the Nikkei 225 Index on March 25, 1998
was 16658.34.
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.
8
<PAGE>
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 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 FT-SE(R) 100 SHARE INDEX
Unless otherwise stated, all information herein relating to
the FT-SE(R) 100 Share Index has been derived from publications
of FTSE, the LSE and other publicly available sources. Such
information reflects the policies of FTSE and the LSE as of March
25, 1998 as stated in such sources; such policies are subject to
change at the discretion of FTSE or the LSE.
The FT-SE(R) 100 Share Index is a stock index regulated and
supervised by the LSE and published, operated and distributed by
FTSE that is intended to measure the composite price performance
of the underlying stocks, which generally consist of the stocks
of the largest 100 United Kingdom companies (determined on the
basis of market capitalization) traded on the LSE. See Appendix B
hereto for a list of the stocks comprising the FT-SE(R) 100 Share
Index as of March 25, 1998. A company's market capitalization is
calculated by multiplying the number of shares outstanding by the
company's current share price. The FT-SE(R) 100 Share Index was
first published on March 3, 1984 (with a base date of December
30, 1983) and is widely reported by newspapers (including The
Wall Street Journal and the Financial Times) and other media. The
underlying stocks represent a broad cross-section of United
Kingdom industry and are among the most actively traded stocks on
the LSE.
9
<PAGE>
The value of the FT-SE(R) 100 Share Index is calculated at
any particular time by multiplying the change in the market
capitalization of the underlying stocks during a prescribed time
period by a base value. The FT-SE(R) 100 Share Index currently is
updated every fifteen seconds between 8:30 A.M. and 4:30 P.M.,
London time.
The FT-SE(R) 100 Share Index is a capital-weighted index
(i.e., an underlying stock's weight in the index is based on the
total market capitalization of the issuer, rather than on its
price per share). Accordingly, a 5 percent price change in the
first ranked underlying stock has a greater effect on the
FT-SE(R) 100 Share Index than a 5 percent price change in the
100th ranked underlying stock. The base value of the index is
recalculated to compensate for replacements of the underlying
stocks or changes in the outstanding share capital of their
issuers that result, for example, from rights issues or new stock
issuances.
Each calendar quarter, the FTSE Actuaries UK Indicies
Committee undertakes a review of the underlying stocks and
determines whether it is necessary to add or delete securities
from the FT-SE(R) 100 Share Index based on the current market
capitalization of their issuers. To maintain continuity, however,
an underlying stock will only be deleted if (i) the market
capitalization of the issuer of such stock has fallen to 111th
place or below, or (ii) the market capitalization of the issuer
of such stock has fallen to below 101st place, but above 111th
place, in which case such stock shall be deleted only if it is
necessary to create a place in the index for the stock of an
issuer that is not included in the index at such time but whose
market capitalization has risen to 90th place or better. A new
underlying stock will be added if (i) the market capitalization
of the issuer of such stock has risen to 90th place or better or
(ii) it is necessary to replace the stock of an issuer whose
market capitalization has fallen to 111th place or below, in
which case stocks of issuers not included in the index at such
time will be added as necessary in the order of their market
capitalization, up to the issuer then in 91st place. The six
highest placed stocks not included in the index comprise a
replacement list to be used in the event that one or more
underlying stocks may be deleted from the index during the period
between quarterly reviews. Such a deletion will result upon the
delisting of an underlying stock, and may result upon a merger or
takeover of its issuer or a suspension of trading in such stock.
A new issue may be added to the index if, in the view of the FTSE
Actuaries UK Indicies Committee, such new issue is so large that
the effectiveness of the index as a market indicator would be
significantly and adversely affected by its omission. In such a
case, the underlying stock of the issuer with the lowest market
capitalization would generally be removed, though the timing of
the inclusion of any such new issue and the decision as to which
underlying stock it shall replace are at the discretion of the
FTSE Actuaries UK Indicies Committee.
The performance of the FT-SE(R) 100 Share Index varies
somewhat from other stock indices, such as the Financial Times
All-Share Index published by The Financial Times Limited (the
"FTL"), that measure the performance of a greater number of
stocks listed on the LSE. Such performance differences reflect a
number of complex factors including, among other things, the
relatively greater volatility of the stocks of smaller companies
that are not included among the underlying stocks and the greater
sensitivity of the FT-SE(R) 100 Share Index to the performance of
industries, such as the petroleum industry, that tend to be
represented by larger companies.
10
<PAGE>
FTSE is under no obligation to continue the calculation and
dissemination of the FT-SE(R) 100 Share Index. The Notes are not
in any way sponsored, endorsed, sold or promoted by FTSE, the LSE
or the Financial Times Ltd. (the "FTL") and none of FTSE, the LSE
or the FTL makes any warranty or representation whatsoever,
expressly or impliedly, either as to the results to be obtained
from the use of the FT-SE(R) 100 Share Index and/or the figure at
which the FT-SE(R) 100 Share Index stands on any particular day
or otherwise. The FT-SE(R) 100 Share Index is compiled and
calculated solely by FTSE. However, none of FTSE, the LSE or the
FTL shall be liable (whether in negligence or otherwise) to any
person for any error in the FT-SE(R) 100 Share Index and neither
FTSE nor the LSE nor the FTL shall be under any obligation to
advise any person, including a purchaser or vendor of any of the
Notes, of any error therein. FTSE has no obligation to take the
needs of the Company or Holders of the Notes into consideration
in determining, composing or calculating the FT-SE(R) 100 Share
Index. FTSE is not responsible for, and has not participated in
the determination of the timing of, prices for, or quantities of,
the Notes to be issued or in the determination or calculation of
the equation by which the Indexed Principal Amount or any other
amount payable with respect to the Notes is set. FTSE has no
obligation or liability in connection with the administration,
marketing or trading of the Notes.
"FTSE(R)" is a registered trade mark of the London Stock
Exchange Limited and the Financial Times Limited and is used by
FTSE International Limited under license. FTSE International
Limited and the Company have entered into a license agreement
providing for a license, in exchange for a fee, of certain trade
and service marks with respect to indices owned and published by
FTSE in connection with the issuance of the Notes. The use of and
reference to the FT-SE(R) 100 Share Index in connection with the
Notes have been consented to by FTSE, the publisher of the
FT-SE(R) 100 Share 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 FT-SE(R) 100 Share Index or any Successor FTSE Index. FTSE
disclaims all responsibility for any errors or omissions in the
calculation and dissemination of the FT-SE(R) 100 Share Index 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 FT-SE(R) 100 Share Index
The following table sets forth the highest and lowest daily
closing price of the FT-SE(R) 100 Share Index, as published by
FTSE, for each quarter during the period from January 1, 1993
through March 25, 1998, as well as the closing price of the
FT-SE(R) 100 Share Index as of the end of each such quarter or
partial quarter. The historical values of the FT-SE(R) 100 Share
Index should not be taken as an indication of future performance.
11
<PAGE>
Daily Closing Prices
-------------------------------
Highest Lowest Period
Level Level End
------- ------ ------
1993:
1st Quarter 2957.32 2737.60 2878.67
2nd Quarter 2907.60 2786.33 2899.95
3rd Quarter 3100.62 2814.12 3037.47
4th Quarter 3461.96 3037.47 3418.42
1994:
1st Quarter 3520.27 3086.40 3086.40
2nd Quarter 3168.30 2876.60 2919.20
3rd Quarter 3265.10 2919.20 3026.30
4th Quarter 3146.50 2943.40 3065.54
1995:
1st Quarter 3176.20 2954.18 3137.90
2nd Quarter 3403.80 3137.90 3314.60
3rd Quarter 3570.78 3314.60 3508.25
4th Quarter 3689.30 3460.10 3689.30
1996:
1st Quarter 3781.30 3639.52 3699.70
2nd Quarter 3587.10 3678.80 3711.00
3rd Quarter 3977.20 3632.30 3953.70
4th Quarter 4118.50 3900.40 4118.50
1997:
1st Quarter 4444.30 4056.60 4312.90
2nd Quarter 4783.10 4214.60 4604.60
3rd Quarter 5244.20 4604.60 5244.20
4th Quarter 5330.80 4711.00 5135.50
1998:
1st Quarter (through
March 25, 1998) 5997.90 5068.80 5967.80
The closing price of the FT-SE(R) 100 Share Index on March
25, 1998 was 5967.80.
Since its inception, the FT-SE(R) 100 Share Index has
experienced significant daily price fluctuations. Any historical
upward or downward trend in the closing level of the FT-SE(R) 100
Share Index during any period set forth above is not any
indication that the FT-SE(R) 100 Share Index is more or less
likely to increase or decline at any time during the term of the
Notes.
The London Stock Exchange, SEAQ and SETS
The LSE is the largest established securities market in the
United Kingdom and one of the world's largest securities
exchanges in terms of market capitalization. Trading on the LSE
takes place in quantity of shares, rather than in round lots. The
rules of the LSE currently place
12
<PAGE>
no limits on daily permissible price movements in the trading of
listed securities. The Stock Exchange Automated Quotations
("SEAQ") service is the LSE's electronic price information
system, which acts as an interface between market-makers and
their customers. Throughout the trading day, 30 registered
market-makers are obliged to display to the market their bid and
offer prices and the maximum bargain size to which these prices
relate. All equity prices displayed on SEAQ are firm. Trading
hours on the LSE and SEAQ currently begin at 8:30 A.M. and end at
4:30 P.M., London time.
Prior to settlement, the LSE requires each member firm to
report details of its transactions to the stock-exchange checking
service to ensure that both parties agree on all aspects of their
transactions. Once through this checking service, transactions
are passed to the LSE's computer-based system for settlement.
On October 20, 1997, the LSE changed the way in which the
stocks of its largest domestic issuers are traded through the
introduction of SETS (Stock Exchange Electronic Trading Service).
SETS was designed to replace the SEAQ structure as the means for
trading in the stocks of issuers that comprise the FT-SE(R) 100
Share Index. At the heart of the changes was the introduction of
an electronic order book, which now enables buyers and sellers to
post their bid and sell prices and to have their trades "matched"
automatically on the screen. The system is designed to allow
investors to place buy and sell orders on to the order book
through a member firm of the LSE. Those orders are displayed
on-screen through a central electronic system and the trade
completed (or "executed") automatically when the order matches
with a corresponding buy or sell order. An LSE working party is
currently considering the most appropriate structure for trading
non-FTSE 100 shares, which in the meantime are expected to
continue to be traded as at present.
Due to the time zone difference between New York City and
London, on any normal trading day, trading on the underlying
stocks of the FT-SE(R) 100 Share Index on the LSE and SETS will
cease prior to the end of the trading day in New York City. The
Official Index Closing Price of the FT-SE(R) 100 Share Index is
generally issued at 3:30 P.M., London time and will therefore
generally be available in the United States shortly after 10:30
A.M., New York City time. The time zone difference between New
York City and London may vary at certain times of the year due to
different beginning and ending dates of Daylight Savings Time in
New York City and the comparable British Summer Time in London.
DESCRIPTION OF THE S&P 500 INDEX
Unless otherwise stated, all information herein relating to
the S&P 500 Index has been derived from publicly-available
material prepared by S&P. Such information reflects the policies
of S&P and is subject to change at the discretion of S&P.
The S&P 500 Index is published by S&P and is intended to
provide a performance benchmark for the U.S. equity markets. 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 (the "Component Stocks") as of a particular time as
compared to the aggregate average Market Value of the common
stocks of 500
13
<PAGE>
similar companies during the base period of the years 1941
through 1943. The "Market Value" of any Component Stock is the
product of the market price per share and the number of the then
outstanding shares of such Component Stock. The 500 companies are
not the 500 largest companies listed on the NYSE and not all 500
companies are listed on such exchange. S&P chooses companies for
inclusion in the S&P 500 Index with an aim of achieving a
distribution by broad industry groupings that approximates the
distribution of these groupings in the common stock population of
the U.S. equity market. 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. Relevant
criteria employed by S&P include the viability of the particular
company, the extent to which that company represents the industry
group to which it is assigned, the extent to which the company's
common stock is widely held and the Market Value and trading
activity of the common stock of that company.
The S&P 500 Index is calculated using a base-weighted
aggregate methodology: the level of the Index reflects the total
Market Value of all 500 Component Stocks relative to the S&P 500
Index's base period of 1941-43 (the "Base Period"). An indexed
number is used to represent the results of this calculation in
order to make the value easier to work with and track over time.
The actual total Market Value of the Component Stocks
during the Base Period has been set equal to an indexed value of
10. This is often indicated by the notation 1941-43=10. In
practice, the daily calculation of the S&P 500 Index is computed
by dividing the total Market Value of the Component Stocks by a
number called the Index Divisor. By itself, the Index Divisor is
an arbitrary number. However, in the context of the calculation
of the S&P 500 Index, it is the only link to the original base
period value of the Index. The Index Divisor keeps the Index
comparable over time and is the manipulation point for all
adjustments to the S&P 500 Index ("Index Maintenance"). Index
Maintenance includes monitoring and completing the adjustments
for company additions and deletions, share changes, stock splits,
stock dividends, and stock price adjustments due to company
restructurings or spin-offs.
To prevent the value of the Index from changing due to
corporate actions, all corporate actions which affect the total
Market Value of the Index require an Index Divisor adjustment. By
adjusting the Index Divisor for the change in total Market Value,
the value of the S&P 500 Index remains constant. This helps
maintain the value of the Index as an accurate barometer of stock
market performance and ensures that the movement of the Index
does not reflect the corporate actions of individual companies in
the Index. All Index Divisor adjustments are made after the close
of trading and after the calculation of the closing value of the
S&P 500 Index. Some corporate actions, such as stock splits and
stock dividends, require simple changes in the common shares
outstanding and the stock prices of the companies in the Index
and do not require Index Divisor adjustments.
The table below summarizes the types of S&P 500 Index
maintenance adjustments and indicates whether or not an Index
Divisor adjustment is required.
14
<PAGE>
Divisor
Type of Corporate Adjustment
Action Adjustment Factor Required
- ----------------- ----------------- ----------
Stock split Shares Outstanding multiplied No
(i.e. 2x1) by 2; Stock Price divided by 2
Share issuance Shares Outstanding plus newly Yes
(i.e. Change > 5%) issued Shares
Share repurchase Shares Outstanding minus Yes
(i.e. Change > 5%) Repurchased Shares
Special cash Share Price minus Special Yes
dividends Dividend
Company change Add new company Market Value
Minus old company Market Value
Rights offering Price of parent company minus Yes
Price of Rights
---------------
Right Ratio
Spin-Offs Price of parent company minus Yes
Price of Spin-Off Co.
---------------------
Share Exchange Ratio
Stock splits and stock dividends do not affect the Index
Divisor of the S&P 500 Index, because following a split or
dividend both the stock price and number of shares outstanding
are adjusted by S&P so that there is no change in the Market
Value of the Component Stock. All stock split and dividend
adjustments are made after the close of trading on the day before
the ex-date.
Each of the corporate events exemplified in the table
requiring an adjustment to the Index Divisor has the effect of
altering the Market Value of the Component Stock and consequently
of altering the aggregate Market Value of the Component Stocks
(the "Post-Event Aggregate Market Value"). In order that the
level of the Index (the "Pre-Event Index Value") not be affected
by the altered Market Value (whether increased or decreased) of
the affected Component Stock, a new Index Divisor ("New Divisor")
is derived as follows:
15
<PAGE>
Post-Event Aggregate
Market Value
-------------------- = Pre-Event Index Value
New Divisor
Post-Event Aggregate
Market Value
New Divisor = ---------------------
Pre-Event Index Value
A large part of the S&P 500 Index maintenance process
involves tracking the changes in the number of shares outstanding
of each of the S&P 500 Index companies. Four times a year, on a
Friday shortly prior to the end of each calendar quarter, the
share totals of companies in the Index are updated as required by
any changes in the number of shares outstanding. After the totals
are updated the Index Divisor is adjusted to compensate for the
net change in the total Market Value of the Index. In addition,
any changes over 5% in the current common shares outstanding for
the S&P 500 Index companies are carefully reviewed on a weekly
basis, and when appropriate, an immediate adjustment is made to
the Index Divisor.
S&P and Salomon Brothers Inc (an affiliate of the Company)
have entered into a non-exclusive license agreement providing for
the license to Salomon Brothers Inc, and any of its affiliated or
subsidiary companies (including the Company), in exchange for a
fee, of the right to use the S&P 500 Index, which is owned and
published by S&P, in connection with certain securities.
including the Notes.
The license agreement between S&P and Salomon Brothers Inc
provides that the following language must be set forth 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 with respect to
the Notes is the licensing of certain trademarks 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,
prices of, 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.
16
<PAGE>
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN. S&P MAKES
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY THE COMPANY, HOLDERS OF THE NOTES OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P
HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard &
Poor's 500," and "500" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by the Company.
None of the Company, the Calculation Agent, the Trustee
under the Senior Debt Indenture or the Agent accepts any
responsibility for the calculation, maintenance or publication of
the S&P 500 Index or any Successor S&P Index or substitute index.
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 March 25,
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.
17
<PAGE>
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 (through
March 25, 1998) 1105.65 927.69 1101.92
The closing level of the S&P 500 Index on March 25, 1998
was 1101.92.
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 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.
18
<PAGE>
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 March 25, 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
1801.00 = $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."
19
<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 March 25, 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 FT-SE(R) 100 SHARE UNDERLYING STOCKS
The following is a list of the companies whose stocks
comprised the FT-SE(R) 100 Share Index as of March 25, 1998.
1. 3i GROUP PLC
2. ABBEY NATIONAL PLC
3. ALLIANCE & LEICESTER
4. ALLIED DOMECQ PLC
5. AMVESCAP PLC
6. ASDA GROUP PLC
7. ASSOCIATED BRITISH FOODS PLC
8. B.A.T. INDUSTRIES PLC
9. BAA PLC
10. BANK OF SCOTLAND (GOVERNOR & CO OF)
11. BARCLAYS PLC
12. BASS PLC
13. BG PLC
14. BILLITON PLC
15. BLUE CIRCLE INDUSTRIES PLC
16. BOC GROUP PLC
17. BOOTS CO PLC
18. BRITISH AEROSPACE PLC
19. BRITISH AIRWAYS PLC
20. BRITISH ENERGY
21. BRITISH LAND CO PLC
22. BRITISH PETROLEUM CO PLC
23. BRITISH SKY BROADCASTING GROUP PLC
24. BRITISH STEEL PLC
25. BRITISH TELECOMMUNICATIONS PLC
26. BTR PLC
27. CABLE & WIRELESS PLC
28. CADBURY SCHWEPPES PLC
29. CARLTON COMMUNICATIONS PLC
30. CENTRICA PLC
31. COMMERCIAL UNION PLC
<PAGE>
32. COMPASS GROUP PLC
33. DIAGEO PLC
34. EMI GROUP PLC
35. ENERGY GROUP PLC
36. ENTERPRISE OIL PLC
37. GENERAL ACCIDENT PLC
38. GENERAL ELECTRIC CO PLC
39. GKN PLC
40. GLAXO WELLCOME PLC
41. GRANADA GROUP PLC
42. GREAT UNIVERSAL STORES PLC
43. GUARDIAN ROYAL EXCHANGE PLC
44. HALIFAX
45. HAYS PLC
46. HSBC HLDGS (75P)
HSBC HLDGS (HK$10)
47. IMPERIAL CHEMICAL INDUSTRIES PLC
48. KINGFISHER PLC
49. LADBROKE GROUP PLC
50. LAND SECURITIES PLC
51. LASMO PLC
52. LEGAL & GENERAL GROUP PLC
53. LLOYDS TSB GROUP PLC
54. LUCAS VARITY
55. MARKS & SPENCER PLC
56. NATIONAL GRID GROUP PLC
57. NATIONAL POWER PLC
58. NATIONAL WESTMINISTER BANK PLC
59. NEXT PLC
60. NORWICH UNION PLC
61. NYCOMED AMERSHAM N/V
NYCOMED AMERSHAM PLC
62. ORANGE PLC
63. PEARSON PLC
64. PENINSULAR & ORIENTAL STEAM NAV CO
65. POWERGEN PLC
2
<PAGE>
66. PRUDENTIAL CORPORATION PLC
67. RAILTRACK GROUP
68. RANK GROUP PLC
69. RECKITT & COLMAN PLC
70. REED INTERNATIONAL PLC
71. RENTOKIL INITIAL PLC
72. REUTERS GROUP PLC
73. RIO TINTO
74. ROLLS-ROYCE PLC
75. ROYAL & SUN ALLIANCE INS GROUP PLC
76. ROYAL BANK OF SCOTLAND GROUP PLC
77. SAFEWAY PLC
78. SAINSBURY (J) PLC
79. SCHRODERS N/V
SCHRODERS ORD
80. SCOTTISH & NEWCASTLE PLC
81. SCOTTISH POWER PLC
82. SEVERN TRENT PLC
83. SHELL TRANSPORT AND TRADING CO PLC
84. SIEBE PLC
85. SMITHKLINE BEECHAM PLC
86. SMITHS INDUSTRIES PLC
87. STANDARD CHARTERED PLC
88. SUN LIFE & PROVINCIAL HOLDINGS PLC
89. TESCO PLC
90. THAMES WATER PLC
91. TOMKINS PLC
92. UNILEVER PLC
93. UNITED NEWS & MEDIA PLC
94. UNITED UTILITIES PLC
95. VODAFONE GROUP PLC
96. WHITBREAD PLC
97. WILLIAMS PLC
98. WOLSELEY PLC
99. WOOLWICH
100. ZENECA GROUP PLC
3
