<PAGE> 1
REGISTRATION NO. 333-
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<TABLE>
<S> <C> <C>
SALOMON SMITH BARNEY HOLDINGS INC. DELAWARE 22-1660266
TARGETS TRUST II DELAWARE 13-7180827
TARGETS TRUST III DELAWARE 13-7180828
TARGETS TRUST IV DELAWARE 13-7180829
TARGETS TRUST V DELAWARE 13-7180831
TARGETS TRUST VI DELAWARE 13-7180832
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(212) 816-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
JOAN GUGGENHEIMER, ESQ.
GENERAL COUNSEL
SALOMON SMITH BARNEY HOLDINGS INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(212) 816-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
WITH COPIES TO:
<TABLE>
<S> <C>
STEPHANIE B. MUDICK, ESQ. ALAN L. BELLER, ESQ.
CITIGROUP INC. CLEARY, GOTTLIEB, STEEN & HAMILTON
153 EAST 53RD STREET ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10043 NEW YORK, NEW YORK 10006
</TABLE>
Approximate date of commencement of proposed sale to public: At such time
(from time to time) after the effective date of this Registration Statement as
agreed upon by Salomon Smith Barney Holdings Inc. and the Underwriters in light
of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Targeted Growth Enhanced Terms Securities of the
Trusts(2).................................................
- ------------------------------------------------------------------------------------------------------------------------------
Forward Contracts of Salomon Smith Barney Holdings
Inc.(2)...................................................
- ------------------------------------------------------------------------------------------------------------------------------
Guarantees of Salomon Smith Barney Holdings Inc. with
respect to the Targeted Growth Enhanced Terms Securities
of the Trusts(3)..........................................
- ------------------------------------------------------------------------------------------------------------------------------
Totals.............................................. $250,000,000 $69,500
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2) Subject to the Proposed Maximum Aggregate Offering Price, there is being
registered hereunder an indeterminate number of Targeted Growth Enhanced
Terms Securities ("TARGETS") of TARGETS Trust II, TARGETS Trust III, TARGETS
Trust IV, TARGETS Trust V and TARGETS Trust VI (each, a "Trust") and Forward
Contracts of Salomon Smith Barney Holdings Inc. as may from time to time be
issued at indeterminate prices. Includes TARGETS which may be purchased by
underwriters to cover over-allotments, if any.
(3) Includes the rights of holders of the TARGETS under any Guarantees and
certain back-up undertakings, comprised of the obligations of Salomon Smith
Barney Holdings Inc. to provide certain indemnities in respect of, and pay
and be responsible for certain costs, expenses, debts and liabilities of,
each Trust (other than with respect to the TARGETS) and such obligations of
Salomon Smith Barney Holdings Inc. as set forth in the Amended and Restated
Declaration of Trust of each Trust and the related Indenture, in each case
as further described in the Registration Statement. The Guarantees, when
taken together with Salomon Smith Barney Holdings Inc.'s obligations under
the Forward Contracts, the related Indenture and the Amended and Restated
Declaration of Trust, will provide a full and unconditional guarantee by
Salomon Smith Barney Holdings Inc. of the Trusts' obligations under the
TARGETS. No separate consideration will be received for any Guarantees or
such back-up obligations.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
[Background of cover page: Salomon Smith Barney trading floor]
SUBJECT TO COMPLETION, DATED FEBRUARY 3, 1999
PROSPECTUS
TARGETS
TRUST [II]
-------------
TARGETED GROWTH With respect to the Common Stock of
ENHANCED TERMS SECURITIES
(TARGETS(R)) Due on
$ per TARGETS
Guaranteed to the extent explained in
this Prospectus by
Salomon Smith Barney Holdings Inc.
- - Preferred securities of a trust paying:
1. Quarterly distributions in the amount of $ , and
2. A maturity payment based on the market price of the common stock of
- - We will apply to list the TARGETS on the Chicago Board Options Exchange
(CBOE) under the symbol " ."
INVESTING IN THE TARGETS INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 9.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the TARGETS or determined that this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
<TABLE>
<CAPTION>
Per TARGETS Total
- ----------------------------------------------------------------------------
<S> <C> <C>
Public Offering Price $ $
- ----------------------------------------------------------------------------
Underwriting Discount $ $
- ----------------------------------------------------------------------------
Proceeds to the Trust (before expenses) $ $
- ----------------------------------------------------------------------------
</TABLE>
The Trust has granted to the Underwriters an option, exercisable for 30 days
from the date of this prospectus, to purchase additional TARGETS at the public
offering price less the underwriting discount.
SALOMON SMITH BARNEY
--------------------
A member of citigroup [graphic]
, 1999
<PAGE> 3
TARGETS(R) (TARGETED GROWTH ENHANCED TERMS SECURITIES)
TARGETS are preferred securities issued by a trust that offer a potential
growth and income investment opportunity. TARGETS provide the growth potential
of a particular stock up to a maximum price, referred to as the appreciation
cap. Although the growth potential of an investment in the TARGETS is capped,
TARGETS investors receive quarterly distributions with a yield greater than the
underlying stock's current dividend yield. TARGETS have a term of 2 to 3 years.
All of the information set forth on this page is qualified in its entirety by
the more detailed information set forth elsewhere in this prospectus.
SELECTED PURCHASE CONSIDERATIONS
- - GROWTH POTENTIAL--TARGETS allow you to participate in the first 30% to 40% of
appreciation in the price of the stock on which the TARGETS are based. At
maturity, you will receive for each TARGETS an amount equal to the price of
the number of shares of stock on which each TARGETS is based, up to the
appreciation cap.
- - CURRENT INCOME--TARGETS pay quarterly distributions with a yield set at a
rate that is significantly higher than the dividend yield currently paid by
the company on whose stock the TARGETS are based.
- - TAX ADVANTAGES--For most investors, a relatively large portion of the
TARGETS' quarterly distributions will be considered a tax-free return of
principal. In addition, the TARGETS generally will be subject to capital
asset treatment upon sale or at maturity. These tax advantages of the TARGETS
have the potential effect of producing a higher after-tax return than would
be produced by a more conventional income-generating security.
- - EXCHANGE LISTING--Although the TARGETS are expected to be "buy and hold"
investments, they are listed on a major exchange.
SELECTED RISK CONSIDERATIONS
An investment in the TARGETS involves significant risks. These risks are
explained in more detail in the "Risk Factors" section of this Prospectus. Some
are summarized here.
- - POTENTIAL LOSSES--Since the maturity payment on the TARGETS is linked to the
price of the underlying stock, if the price of the underlying stock falls,
the maturity payment could be less than your initial investment, even if the
price of the underlying stock at some point over the life of the TARGETS
exceeds the price of the underlying stock at the time of your initial
investment.
- - LIMITED OPPORTUNITY FOR EQUITY APPRECIATION--The opportunity for equity
appreciation afforded by an investment in the TARGETS may be significantly
less than the opportunity for equity appreciation afforded by a direct
investment in the underlying stock due to the appreciation cap.
- - RELATIONSHIP TO THE UNDERLYING STOCK--The market price of the TARGETS at any
time will be affected primarily by changes in the price of the underlying
stock. The yield on the TARGETS is set at a rate that is higher than the
current dividend yield on the underlying stock, but may not remain higher
through the term of the TARGETS if the issuer of the underlying stock
increases its dividends.
- - LIQUIDITY--TARGETS will be listed on a major exchange, but there can be no
guarantee of liquidity in the secondary market. Although Salomon Smith Barney
Inc. intends to make a market in the TARGETS, it is not obligated to do so.
- - POSSIBLE LOSS OF VALUE IN SECONDARY MARKET--The market price of the TARGETS
will be affected by a number of interrelated factors, including, but not
limited to, the price of the underlying stock, the dividend yield on the
underlying stock, the level of interest rates and other economic conditions,
as well as by Salomon Smith Barney Holdings' perceived creditworthiness. For
these reasons, the TARGETS may trade at prices below their initial issue
price and you could thus receive substantially less than the amount of your
original investment if you sell your TARGETS prior to maturity.
<PAGE> 4
SUMMARY INFORMATION -- Q&A
This summary includes questions and answers that highlight selected
information from this prospectus to help you understand the Targeted Growth
Enhanced Terms Securities ("TARGETS")* with respect to the Common Stock of
(" "). You should carefully read the entire prospectus to fully understand
the terms of the TARGETS as well as the principal tax and other considerations
that are important to you in making a decision about whether to invest in the
TARGETS. You should, in particular, carefully review the section entitled "Risk
Factors", which highlights certain risks, to determine whether an investment in
the TARGETS is appropriate for you. All of the information set forth below is
qualified in its entirety by the more detailed explanation set forth elsewhere
in this prospectus.
WHAT IS THE TRUST?
TARGETS Trust [II] (the "Trust") is a recently formed Delaware business
trust. Salomon Smith Barney Holdings Inc. ("Salomon Smith Barney") will own all
of the common undivided interests in the Trust (the "Common Securities"). The
Common Securities will comprise at least 3% of the Trust's capital.
The Trust will not engage in any activities except:
- issuing TARGETS and Common Securities,
- investing approximately % to % of the proceeds of the offering
($ to $ ) in a Forward Contract of Salomon Smith Barney relating
to the Common Stock of (the "Forward Contract," as described below),
- investing approximately % to % of the proceeds of the offering
($ to $ ) in stripped self-amortizing U.S. Treasury Securities
(the "Treasury Securities," as described below), and
- activities incidental to the above.
The Trust will not issue any securities except the Common Securities and
the TARGETS.
The Trust will be managed by trustees elected by Salomon Smith Barney, as
the holder of the Common Securities. The holders of the TARGETS have no right to
elect or remove trustees. Salomon Smith Barney will pay all costs, expenses,
debts and liabilities of the Trust, including fees and expenses related to the
offering of the TARGETS, but not including payments under the TARGETS.
The address and telephone number of the Trust are:
TARGETS Trust [II]
c/o Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, NY 10013
(212) 816-6000
WHAT ARE THE TARGETS?
The TARGETS are preferred undivided interests in the Trust. The TARGETS
mature on (the "Maturity Date"), but will be subject to acceleration to an
Accelerated Maturity Date upon the occurrence of one of the Acceleration Events
described below. If an Acceleration Event occurs or Salomon Smith Barney
defaults on the Guarantee, holders of the TARGETS will have a preference over
holders of the Common Securities for payments.
The TARGETS are designed to provide you with a higher yield than the
current dividend yield paid on the common stock of (the "Common Stock")
while also providing the opportunity for holders to share in any appreciation of
the Common Stock up to a price per share of $ (the "Appreciation Cap").
- ---------------
* Please refer to the "Index of Terms" attached as Appendix A for a listing of
defined terms (which are capitalized) and the pages on which they are defined
in this prospectus.
2
<PAGE> 5
You will not have the right to receive physical certificates evidencing
your ownership of TARGETS except under limited circumstances. Instead, the Trust
will issue the TARGETS in the form of a global certificate, which will be held
by The Depository Trust Company ("DTC") or its nominee. Direct and indirect
participants in DTC will record beneficial ownership of the TARGETS by
individual investors. You should refer to the section "Description of the
TARGETS -- Book-Entry Only Issuance" in this prospectus.
WILL I RECEIVE DISTRIBUTIONS ON THE TARGETS PRIOR TO MATURITY?
You will receive cash distributions of $ per quarter on each TARGETS,
payable on each , , and , beginning , 1999.
The Trust will make payments out of:
- payments received on the Treasury Securities, and
- any Yield Enhancement Payments received from Salomon Smith Barney under
the Forward Contract.
Depending on market conditions at the time of pricing of the TARGETS for
initial sale to the public, the amount of the Yield Enhancement Payments may be
zero or a nominal amount. Of each Quarterly Distribution payable on each
TARGETS, $ will be paid out of payments received on the Treasury Securities
and $ will be paid out of Yield Enhancement Payments.
The ability of the Trust to make Quarterly Distributions on the TARGETS is
entirely dependent on receipt by the Trust of payments under the Treasury
Securities and Yield Enhancement Payments, if any, under the Forward Contract.
If Salomon Smith Barney does not make any Yield Enhancement Payments on the date
they are due under the Forward Contract, it will be allowed to delay making
those payments, with interest, until maturity. You should refer to "Description
of the TARGETS -- Quarterly Distributions".
WHAT WILL I RECEIVE AT MATURITY OF THE TARGETS?
At maturity, you will receive for each TARGETS the Maturity Payment and the
final Quarterly Distribution, plus any accrued and unpaid Yield Enhancement
Payments.
Maturity Payment
The "Maturity Payment" per TARGETS will equal the product of (A) the
Current Market Price of the Common Stock as of the Maturity Date times (B) the
Exchange Rate.
"Exchange Rate" means (A) if the Current Market Price of the Common Stock
as of the Maturity Date is less than or equal to the Appreciation Cap, ,
and (B) if the Current Market Price of the Common Stock as of the Maturity Date
is greater than the Appreciation Cap, the following fraction:
Appreciation Cap x
-------------------------------------------------------------------------
Current Market Price of the Common Stock as of the Maturity Date
The Exchange Rate and the Appreciation Cap are subject to adjustment upon the
occurrence of certain events involving and its capital structure, as
described in the section "Description of the TARGETS -- Dilution Adjustments" in
this prospectus.
"Current Market Price" means the average daily closing sale price (or, if
no closing sale price is reported, the last reported sale price) of the Common
Stock for the 10 trading days immediately prior to but not including the date
one business day before the Maturity Date.
The amount payable to holders of the TARGETS at maturity is dependent upon
the Current Market Price of the Common Stock at maturity. If the Current Market
Price on the Maturity Date is less than $ , the Maturity Payment on each
TARGETS will be less than the amount originally invested.
3
<PAGE> 6
In addition, the TARGETS provide less opportunity for equity appreciation
than a direct investment in the Common Stock because the Maturity Payment on
each TARGETS will be limited by the Appreciation Cap to % of the amount
originally invested.
The Maturity Payment with respect to each TARGETS will be paid by the Trust
out of the funds received by the Trust from Salomon Smith Barney under the
Forward Contract. The Trust's ability to make the Maturity Payments is entirely
dependent upon the Trust receiving payment under the Forward Contract from
Salomon Smith Barney. You should refer to the section "Description of the
TARGETS -- Maturity Payment" in this prospectus.
Maturity Payment -- Examples
Here are three examples of hypothetical Maturity Payment calculations:
Example 1: The Current Market Price of the Common Stock is less than the
Appreciation Cap (and less than the price of the Common Stock
when the TARGETS are issued):
<TABLE>
<S> <C>
Hypothetical market price of Common Stock upon issuance of
TARGETS................................................... $[A]
Hypothetical Appreciation Cap............................... $[B]
Hypothetical Current Market Price........................... $[C]
</TABLE>
Exchange Rate = [E] (since the Current Market Price is less than the
Appreciation Cap)
Maturity Payment = [E] x $[C] = $
Example 2: The Current Market Price of the Common Stock is less than the
Appreciation Cap (and greater than the price of the Common Stock
when the TARGETS are issued):
<TABLE>
<S> <C>
Hypothetical market price of Common Stock upon issuance of
TARGETS................................................... $[A]
Hypothetical Appreciation Cap............................... $[B]
Hypothetical Current Market Price........................... $[D]
</TABLE>
Exchange Rate = [E] (since the Current Market Price is less than the
Appreciation Cap)
Maturity Payment = [E] x $[D] = $
Example 3: The Current Market Price of the Common Stock is greater than the
Appreciation Cap:
<TABLE>
<S> <C>
Hypothetical market price of Common Stock upon issuance of
TARGETS................................................... $[A]
Hypothetical Appreciation Cap............................... $[B]
Hypothetical Current Market Price........................... $[F]
</TABLE>
Exchange Rate = [E] x $[B] = [G] (since the Current Market Price is greater
than the Appreciation Cap)
----------------------------
$[F]
Maturity Payment = [G] x $[F] = $
WHAT IF THE MATURITY OF THE TARGETS IS ACCELERATED?
If one of the Acceleration Events described below occurs, the Treasury
Securities will be sold and the Trust will be liquidated. You will receive for
each TARGETS the Accelerated Maturity Payment and a pro rata portion of the
proceeds of the sale of the Treasury Securities, plus any accrued and unpaid
Yield Enhancement Payments.
The "Accelerated Maturity Payment" per TARGETS will be calculated in the
same manner as the Maturity Payment and as though the date on which the
Acceleration Event occurred (the "Accelerated Maturity Date") were the Maturity
Date.
You will receive payment before holders of the Common Securities if (i) an
Acceleration Event occurs or (ii) Salomon Smith Barney defaults on any of its
obligations under the Guarantee.
4
<PAGE> 7
Any of the following will constitute an "Acceleration Event":
- the occurrence of certain adverse tax consequences to the Trust,
- the classification of the Trust as an "investment company" under the
Investment Company Act of 1940, or
- the initiation of bankruptcy proceedings regarding Salomon Smith Barney.
ARE PAYMENTS ON THE TARGETS GUARANTEED?
Salomon Smith Barney has guaranteed (the "Guarantee") that if a payment on
the Forward Contract or the Treasury Securities is made to the Trust but, for
any reason, the Trust does not make the corresponding payment to you, then
Salomon Smith Barney will make the payment directly to you. You should refer to
the sections "Description of the Guarantee" and "Risk Factors -- Limited
Enforcement Rights" in this prospectus.
WILL I HAVE VOTING RIGHTS?
You will have limited voting rights with respect to the Trust and will not
be entitled to vote to appoint, remove or replace, or increase or decrease the
number of, the trustees. These voting rights will be held exclusively by Salomon
Smith Barney, as the holder of the Common Securities. You will, however, have
the right to direct The Chase Manhattan Bank, as trustee of the Trust and as
holder of the Forward Contract and the Treasury Securities, to exercise its
rights as trustee and to direct the time, method and place of any proceeding for
any remedy available to the trustee.
You will have no voting rights and no ownership interest in any Common
Stock.
HOW HAS THE COMMON STOCK OF PERFORMED HISTORICALLY?
We have provided a table showing the high and low sales prices for the
Common Stock and the cash dividends per share of Common Stock for each quarter
since the beginning of 1995. You can find this table in the section "Historical
Data on the Common Stock" in this Prospectus. We have provided this historical
information to help you evaluate the behavior of the Common Stock in recent
years; however, past performance is not necessarily indicative of how the Common
Stock will perform in the future. You should refer to the section "Risk
Factors -- Relationship of the TARGETS and the Common Stock" in this prospectus.
The TARGETS are obligations of the Trust and, to the extent of the
Guarantee, of Salomon Smith Barney. Even though the Maturity Payment will
reflect the market price of the Common Stock of at maturity, has no
obligations under the TARGETS or the Guarantee.
CAN YOU TELL ME MORE ABOUT THE FORWARD CONTRACT?
The Forward Contract will be issued under an indenture between Salomon
Smith Barney and The Chase Manhattan Bank, as trustee. Salomon Smith Barney has
certain banking relationships with The Chase Manhattan Bank.
The Trust will purchase the Forward Contract from Salomon Smith Barney on
the date the TARGETS are issued. Under the Forward Contract, Salomon Smith
Barney will be required to pay to the Trust the total Maturity Payments (or the
total Accelerated Maturity Payments) and any Yield Enhancement Payments. The
Forward Contract is a prepaid "cash-settled" forward contract under which
Salomon Smith Barney will settle its obligations in cash rather than in
securities. The proceeds from the sale of the Forward Contract will be used by
Salomon Smith Barney for general corporate purposes. You should refer to the
sections in this prospectus "Use of Proceeds and Hedging Activities",
"Description of the Forward Contract" and "Risk Factors -- Purchases and Sales
by Affiliates of Salomon Smith Barney".
WHAT ABOUT TAXES?
If you are a U.S. individual or taxable entity, you generally will be
required to pay taxes on only a relatively small portion of each quarterly cash
distribution you receive from the Trust, which will be ordinary income. The
5
<PAGE> 8
remaining portion of each quarterly cash distribution that you receive from the
Trust will be treated as a tax-free return of your investment in the TARGETS and
will reduce your tax basis in them. If you hold your TARGETS until they mature
or if you sell your TARGETS, you will have a capital gain or loss equal to the
difference between your tax basis in the TARGETS and the cash you receive. You
should refer to the section "Certain United States Federal Income Tax
Considerations" in this prospectus.
WILL THE TARGETS BE LISTED ON A STOCK EXCHANGE?
We will apply to list the TARGETS on the Exchange (the "Exchange")
under the symbol " ". You should be aware that the listing of the TARGETS on
the Exchange will not ensure that a liquid trading market will be available for
the TARGETS. You should review the section "Risk Factors -- Possible Illiquidity
of Secondary Market" in this prospectus.
WHAT IS THE ROLE OF SALOMON SMITH BARNEY'S SUBSIDIARY, SALOMON SMITH BARNEY
INC.?
Salomon Smith Barney's subsidiary, Salomon Smith Barney Inc., is an
underwriter for the offering and sale of the TARGETS. After the initial
offering, Salomon Smith Barney Inc. and/or other broker-dealer affiliates of
Salomon Smith Barney intend to buy and sell TARGETS to create a secondary market
for holders of the TARGETS, and may engage in other activities described in
"Underwriting". However, neither Salomon Smith Barney Inc. nor any of these
affiliates will be obligated to engage in any market-making activities, or
continue them once it has started.
CAN YOU TELL ME ABOUT SALOMON SMITH BARNEY?
Salomon Smith Barney Holdings Inc. is a holding company that provides
investment banking, securities and commodities trading, brokerage, asset
management and other financial services through its subsidiaries. Salomon Smith
Barney is a subsidiary of Citigroup Inc. (formerly Travelers Group Inc.)
("Citigroup"), a diversified financial services holding company. On October 8,
1998, Travelers Group Inc. ("Travelers Group") and Citicorp completed a merger,
pursuant to which Citicorp was merged into a subsidiary of Travelers Group and
Travelers Group changed its name to Citigroup Inc.
Salomon Smith Barney's ratios of earnings to fixed charges and preferred
stock dividends since 1993 are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
QUARTER ENDED -------------------------------------
SEPTEMBER 30, 1998 1997 1996 1995 1994 1993
------------------ ---- ---- ---- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges and
preferred stock dividends........... 1.14 1.17 1.37 1.20 0.98* 1.32
</TABLE>
- ---------------
* For the year ended December 31, 1994, earnings as defined were inadequate to
cover fixed charges. The amount by which fixed charges exceeded earnings as
defined for the year was $173 million.
ARE THERE ANY ERISA RESTRICTIONS ON INVESTMENTS IN THE TARGETS?
It is our view that employee benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and individual
retirement accounts, Keogh plans and other plans subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), can, generally, purchase
TARGETS. However, each plan and account should consider whether the purchase of
TARGETS is prudent and consistent with the documents governing the plan or
account. The fiduciary rules governing plans and accounts are complex and
individual considerations may apply to a particular plan or account.
Accordingly, any fiduciary of any plan or account should consult with its legal
advisers to determine whether the purchase of TARGETS is permissible under the
fiduciary rules. You should refer to the section "ERISA Considerations" in this
prospectus.
6
<PAGE> 9
WHERE CAN I FIND OUT MORE INFORMATION?
Salomon Smith Barney files annual, quarterly and special reports, proxy
statements and other information (File No. 1-4346) with the Securities and
Exchange Commission (the "SEC"). You may read and copy any document Salomon
Smith Barney files at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Salomon Smith Barney's SEC
filings are also available to the public from the SEC's web site at
http://www.sec.gov.
Separate financial statements of the Trust have not been included in this
prospectus. Salomon Smith Barney does not believe that these financial
statements would be material to you because (i) Salomon Smith Barney, an SEC
reporting company, owns all the voting securities of the Trust, (ii) the Trust
has no independent operations, (iii) Salomon Smith Barney is the obligor under
the Forward Contract, and (iv) Salomon Smith Barney has fully and
unconditionally guaranteed the Trust's obligations under the TARGETS to the
extent that the Trust has funds available to meet its obligations.
In its future filings under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), a footnote to Salomon Smith Barney's annual financial
statements will state that the Trust is consolidated with Salomon Smith Barney,
that the sole assets of the Trust are the Forward Contract and the Treasury
Securities, and that the Guarantee when taken together with the Forward
Contract, the related Indenture, the Declaration of the Trust and Salomon Smith
Barney's obligations to pay all fees and expenses of the Trust constitutes a
full and unconditional guarantee by Salomon Smith Barney of the Trust's
obligations under the TARGETS.
The Company and the Trusts have filed with the SEC a registration statement
(No. 333- ) which contains additional information not included in this
prospectus. A copy of the registration statement can be obtained from the SEC as
described above or from Salomon Smith Barney.
The SEC allows Salomon Smith Barney to "incorporate by reference" the
information it files, which means that Salomon Smith Barney can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information filed with the SEC will update and supersede
this information. We incorporate by reference the documents filed by Salomon
Smith Barney listed below and any future filings made with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Exchange Act until the offering is completed:
(a) Annual Report on Form 10-K for the year ended December 31, 1997,
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998, and
(c) Current Reports on Form 8-K filed on January 9, 1998, January 26,
1998, February 2, 1998, March 3, 1998, April 17, 1998, April 20,
1998, May 13, 1998, June 8, 1998, June 10, 1998, June 17, 1998, July
17, 1998, July 20, 1998, July 22, 1998, July 30, 1998, September 1,
1998, October 14, 1998, October 23, 1998, October 29, 1998, November
3, 1998 and January 25, 1999.
You may request a copy of these filings, at no cost, by writing or
telephoning Salomon Smith Barney at the following address:
Treasurer
Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, NY 10013
212-816-6000
You should rely only on the information incorporated by reference or
provided in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
7
<PAGE> 10
RISK FACTORS
You should carefully consider the following risk factors in addition to the
other information contained in this prospectus before investing in the TARGETS.
POTENTIAL LOSSES DUE TO DECLINE IN PRICE OF COMMON STOCK
The amount of cash that you receive at maturity will depend on the Current
Market Price of the Common Stock at the time of maturity. The amount of the
Maturity Payments may be less than the amount you paid for your TARGETS (except
to the extent of any Quarterly Distributions). For example, if at maturity the
Current Market Price of the Common Stock is less than $ per share, the
Maturity Payment for each TARGETS will be less than the initial offering price
of each TARGETS, in which case your investment in the TARGETS will result in a
loss (again, except to the extent of any Quarterly Distributions). If
becomes insolvent or bankrupt, an investment in the TARGETS could result in a
total loss of the amount invested (again, except to the extent of any Quarterly
Distributions).
EFFECT OF APPRECIATION CAP
As a result of the limitation provided by the Appreciation Cap, you will
only receive at maturity an amount representing a maximum of % of any
increase in the value of the Common Stock. If the current market price of the
common stock exceeds the Appreciation Cap, your return on the TARGETS will
therefore be less than your return on a similar security that was directly
linked to the Common Stock but was not subject to an Appreciation Cap.
RELATIONSHIP OF THE TARGETS AND THE COMMON STOCK
The historical Common Stock price is not an indicator of the future
performance of the Common Stock during the term of the TARGETS. Changes in the
price of the Common Stock will affect the trading price of the TARGETS, but it
is impossible to predict whether the price of the Common Stock will rise or
fall.
The yield on the TARGETS is higher than the current dividend yield on the
Common Stock. However, it may not remain higher through the term of the TARGETS
if increases its dividends. In addition, you will not receive dividends or
other distributions paid on the Common Stock.
is not in any way involved with this offering and has no
obligations relating to the TARGETS or holders of the TARGETS.
is currently subject to SEC reporting requirements, and
distributes reports, proxy statements and other information to its stockholders.
In the event that ceases to be subject to these reporting requirements,
pricing information for the TARGETS may be more difficult to obtain and the
value, trading price and liquidity of the Common Stock and the TARGETS may be
adversely affected.
FACTORS AFFECTING TRADING VALUE OF THE TARGETS
We believe that the trading value of the TARGETS will depend on the price
of the Common Stock and on a number of other factors. Some of these factors are
interrelated in complex ways; as a result, the effect of any one factor may be
offset or magnified by the effect of another factor. The price at which you will
be able to sell the TARGETS prior to maturity may be substantially less than the
amount you originally invest if the value of the Common Stock at that time is
less than the price of the Common Stock when the TARGETS are purchased. The
following paragraphs describe what we expect to be the impact on the market
value of the TARGETS of a change in a specific factor, assuming all other
conditions remain constant.
Common Stock Price. We expect that the market value of the TARGETS will
depend substantially on the amount, if any, by which the current Common Stock
price changes from the price of the Common Stock when the TARGETS are issued. If
you choose to sell your TARGETS when the current Common Stock price exceeds the
Common Stock price at the time the TARGETS were issued, you may receive
substantially less than the amount that would be payable at maturity based on
that current Common Stock price because of expectations that the
8
<PAGE> 11
Common Stock will continue to fluctuate until the Maturity Payment is
determined. In addition, if you choose to sell your TARGETS when the current
Common Stock price is below the Common Stock price at the time the TARGETS were
issued, you can expect to receive less than the amount you originally invested
(except to the extent of any Quarterly Distributions).
Trading prices of the Common Stock will be influenced by 's results of
operations and by complex and interrelated political, economic, financial and
other factors that can affect the capital markets generally, 's market
segment and the stock exchange on which the Common Stock is traded. Salomon
Smith Barney's hedging activities in the Common Stock of its obligations under
the Forward Contract, and the issuance of securities similar to the TARGETS and
other trading activities by Salomon Smith Barney, its affiliates and other
market participants, can affect the price of the Common Stock.
Interest Rates. Because the TARGETS pay Quarterly Distributions, we expect
that the trading value of the TARGETS will be affected by changes in interest
rates. In general, if U.S. interest rates increase, the trading value of the
TARGETS may decrease. If U.S. interest rates decrease, the trading value of the
TARGETS may increase. Interest rates may also affect the U.S. economy and, in
turn, the price of the Common Stock, which (for the reasons discussed above)
would affect the value of the TARGETS. Rising U.S. interest rates may result in
a lower Common Stock price and, thus, a lower value of the TARGETS. Falling U.S.
interest rates may result in a higher Common Stock price and, thus, a higher
value of the TARGETS.
Dividend Yields. If the dividend yield on the Common Stock increases, we
expect that the value of the TARGETS may decrease, since the TARGETS do not
incorporate the value of such payments. Conversely, if the dividend yield on the
Common Stock decreases, the value of the TARGETS may increase.
Salomon Smith Barney Credit Ratings, Financial Condition and
Results. Actual or anticipated changes in Salomon Smith Barney's credit
ratings, financial condition or results may affect the market value of the
TARGETS.
Economic Conditions and Earnings Performance of . General economic
conditions and the earnings results of and real or anticipated
changes in such conditions or results may affect the market value of the
TARGETS.
The impact of one of the factors specified above, such as an increase in
interest rates, may offset some or all of any change in the trading value of the
TARGETS attributable to another factor, such as an increase in the price of the
Common Stock.
In general, assuming all relevant factors are held constant, we expect that
the effect on the trading value of the TARGETS of a given change in most of the
factors listed above will be less if it occurs later in the term of the TARGETS
than if it occurs earlier in the term of the TARGETS, except that we expect that
the effect on the trading value of the TARGETS of a given increase in the price
of the Common Stock will be greater if it occurs later in the term of the
TARGETS than if it occurs earlier in the term of the TARGETS.
ACCELERATION OF MATURITY DATE
If an Acceleration Event occurs, the maturity of the TARGETS will be
accelerated and you will receive with respect to each TARGETS the Accelerated
Maturity Payment and a pro rata portion of the proceeds of the sale of the
Treasury Securities. Because the amount that would be payable on the Accelerated
Maturity Date is uncertain (since it would depend on when an Acceleration Event
occurs), the trading price of the TARGETS may be less than what you would
otherwise expect based on the price of the Common Stock and the level of
interest rates at a particular time.
DELAY IN YIELD ENHANCEMENT PAYMENTS
The failure by Salomon Smith Barney to make any Yield Enhancement Payments
on the date they are due will not constitute an Acceleration Event. Salomon
Smith Barney will be allowed under the Forward Contract to delay making any
unpaid Yield Enhancement Payments until the Maturity Date or the Accelerated
Maturity Date.
9
<PAGE> 12
LIMITED VOTING RIGHTS
You will have limited voting rights with respect to the Trust and will not
be entitled to vote to appoint, remove or replace, or increase or decrease the
number of, the trustees. These voting rights will be held exclusively by Salomon
Smith Barney, as the holder of the Common Securities. You should refer to the
section "Description of the TARGETS -- Voting Rights" in this prospectus. In
addition, you will have no voting rights with respect to the Common Stock.
DILUTION OF THE COMMON STOCK
The Maturity Payment (and Accelerated Maturity Payment) are subject to
adjustment for certain events arising from stock splits and combinations, stock
dividends, certain other actions of that modify its capital structure and
certain other transactions involving , as well as for a liquidation,
dissolution or winding up of . You should refer to the section "Description
of the TARGETS -- Dilution Adjustments". The Maturity Payment (and Accelerated
Maturity Payment) will not be adjusted for other events that may adversely
affect the price of the Common Stock, such as offerings of Common Stock for cash
or in connection with acquisitions. Because of the relationship of the Maturity
Payment (and Accelerated Maturity Payment) to the price of the Common Stock,
such other events may reduce the trading price of the TARGETS and the Maturity
Payment on the TARGETS.
POTENTIAL FEDERAL INCOME TAX CONSEQUENCES
No statutory, judicial or administrative authority directly addresses the
characterization of the TARGETS or instruments similar to the TARGETS for U.S.
federal income tax purposes. As a result, significant aspects of the U.S.
federal income tax consequences of an investment in the TARGETS are not certain.
There is no ruling from the Internal Revenue Service with respect to the TARGETS
and the Internal Revenue Service may not agree with the conclusions expressed
under the section "Certain Federal Income Tax Considerations" in this
prospectus.
POSSIBLE ILLIQUIDITY OF SECONDARY MARKET
We will apply to list the TARGETS on the Exchange. However, there may
not be a secondary market in the TARGETS and, if there is a secondary market, it
may not be liquid. If the secondary market for the TARGETS is limited, there may
be few buyers should you choose to sell your TARGETS prior to maturity. This may
affect the price you receive. There is currently no secondary market for the
Forward Contract.
In addition, any market that develops for the TARGETS may influence and is
likely to be influenced by the market for the Common Stock. For example, the
price of the Common Stock could be affected by (i) sales of Common Stock by
investors who view the TARGETS as a more attractive means of equity
participation in
and (ii) hedging or arbitrage trading activity that may develop involving the
TARGETS and the Common Stock.
PURCHASES AND SALES BY AFFILIATES OF SALOMON SMITH BARNEY
Salomon Smith Barney's affiliates, including Salomon Smith Barney Inc., may
from time to time buy or sell the Common Stock or derivative instruments
relating to the Common Stock for their own accounts in connection with their
normal business practices or in connection with hedging Salomon Smith Barney's
obligations under the Forward Contract. These transactions could affect the
price of the Common Stock. You should refer to the section "Use of Proceeds and
Hedging Activities" in this prospectus.
Salomon Smith Barney Inc. or an affiliate may enter into a swap agreement
with one of Salomon Smith Barney's other affiliates in connection with the sale
of the TARGETS and may earn additional income as a result of payments pursuant
to the swap or related hedge transactions.
RISK RELATING TO BANKRUPTCY OF SALOMON SMITH BARNEY
Although the TARGETS are securities of the Trust, the ability of the Trust
to make payments under the TARGETS depends upon its receipt from Salomon Smith
Barney under the Forward Contract of (i) the total Maturity Payments (or total
Accelerated Maturity Payments) and (ii) any Yield Enhancement Payments. The
ability of Salomon Smith Barney to meet its obligations under the Forward
Contract and, in turn, the ability of the
10
<PAGE> 13
Trust to meet its obligations under the TARGETS, therefore depends on the
solvency and creditworthiness of Salomon Smith Barney. In the event of a
bankruptcy of Salomon Smith Barney, any recovery by the holders of TARGETS will
likely be substantially delayed and may be less than each holder's pro rata
portion of the Forward Contract.
11
<PAGE> 14
SALOMON SMITH BARNEY
Salomon Smith Barney is a holding company that provides investment banking,
securities and commodities trading, brokerage, asset management and other
financial services through its subsidiaries. As used in this section, unless the
context otherwise requires, "Salomon Smith Barney" refers to Salomon Smith
Barney Holdings Inc. and its subsidiaries.
Salomon Smith Barney is a global investment bank and broker-dealer that
operates through over 450 offices throughout the United States and 45 offices in
26 foreign countries. Salomon Smith Barney's global investment banking services
encompass a full range of capital market activities, including the underwriting
and distribution of debt and equity securities for United States and foreign
corporations and for state, local and other governmental and government
sponsored authorities. It also provides financial advice to investment banking
clients on a wide variety of transactions including mergers and acquisitions,
divestitures, leveraged buyouts, financial restructurings and a variety of
cross-border transactions.
Salomon Smith Barney executes securities and commodity futures brokerage
transactions on all major United States and international securities and futures
exchanges on behalf of customers and for its own account. Salomon Smith Barney
also trades for its own account in various markets throughout the world, and
uses many different strategies involving a broad spectrum of financial
instruments and derivative products.
Salomon Smith Barney's retail brokerage services include providing
investment advice and financial planning and brokerage services. Salomon Smith
Barney's financial consultants also sell proprietary and non-proprietary mutual
funds, and many offer individual insurance products, primarily variable
annuities. With approximately 10,300 financial consultants and approximately 875
institutional brokers, Salomon Smith Barney believes that it is currently the
second largest brokerage firm in the United States.
Salomon Smith Barney's asset management services include providing
discretionary and non-discretionary asset management services to a wide array of
mutual funds and institutional and individual investors, sponsoring and acting
as advisor to mutual funds and sponsoring and overseeing the portfolios of unit
investment trusts. Client relationships may be introduced either through Salomon
Smith Barney's network of financial consultants or independently of that
network.
On October 8, 1998, Citicorp and Salomon Smith Barney's parent Travelers
Group completed a merger, pursuant to which Citicorp was merged into a
subsidiary of Travelers Group and Travelers Group changed its name to Citigroup
Inc.
The principal offices of Salomon Smith Barney are located at 388 Greenwich
Street, New York, New York 10013 (telephone number: (212) 816-6000). Salomon
Smith Barney was incorporated in Delaware in 1960.
12
<PAGE> 15
USE OF PROCEEDS AND HEDGING ACTIVITIES
Of the total proceeds to be received by the Trust from the sale of the
TARGETS and the Common Securities (the "Trust Securities"), approximately %
to % ($ to $ ) will be used by the Trust to purchase the Forward
Contract from Salomon Smith Barney and approximately % to % ($ to
$ ) will be used by the Trust to purchase the Treasury Securities. A portion
of the net proceeds to be received by Salomon Smith Barney from the sale of the
Forward Contract will be used for general corporate purposes, which may include
capital contributions to subsidiaries of Salomon Smith Barney and/or the
reduction or refinancing of borrowings of Salomon Smith Barney or its
subsidiaries. In order to fund its investment brokerage business, Salomon Smith
Barney expects to incur additional indebtedness in the future. To the extent
that TARGETS being purchased for resale by the Underwriters are not sold, the
aggregate proceeds to Salomon Smith Barney and its subsidiaries would be
reduced. Salomon Smith Barney or an affiliate may enter into a swap agreement
with one of Salomon Smith Barney's affiliates in connection with the sale of the
TARGETS and may earn additional income as a result of payments pursuant to such
swap or related hedge transactions.
The remainder of the net proceeds to be received by Salomon Smith Barney
from the sale of the Forward Contract will be used, in part, by Salomon Smith
Barney or one or more of its subsidiaries for hedging activities related to
Salomon Smith Barney's obligations under the Forward Contract. On or prior to
the Closing Date (as defined herein), Salomon Smith Barney, directly or through
its subsidiaries, will hedge its anticipated exposure under the Forward Contract
by the purchase or sale of Common Stock or options, futures contracts, forward
contracts or swaps or options on the foregoing, or other derivative or synthetic
instruments related to, the Common Stock. From time to time after the initial
sale of the TARGETS and prior to the Maturity Date or Accelerated Maturity Date,
depending on market conditions (including the price of the Common Stock),
Salomon Smith Barney expects that it or its subsidiaries will increase or
decrease their initial hedge positions through various transactions and may
purchase or sell Common Stock or options, swaps, futures contracts, forward
contracts or other derivative or synthetic instruments related to the Common
Stock. In addition, Salomon Smith Barney and its subsidiaries may purchase or
sell TARGETS from time to time. Salomon Smith Barney or its subsidiaries may
also take positions in other types of appropriate financial instruments that may
become available in the future. To the extent that Salomon Smith Barney or its
subsidiaries have a long or short hedge position in the Common Stock or options,
swaps, futures contracts, forward contracts or other derivative or synthetic
instruments related to the Common Stock, Salomon Smith Barney or one or more of
its subsidiaries may liquidate all or a portion of their holdings close to
maturity of the Forward Contract and the TARGETS. Depending on, among other
things, future market conditions, the aggregate amount and composition of such
positions are likely to vary over time. Profits or losses from any such position
cannot be ascertained until such position is closed out and any offsetting
position or positions are taken into account. Although Salomon Smith Barney has
no reason to believe that such hedging activity will have a material effect on
the price of TARGETS, such options, swaps, futures contracts, forward contracts
or other derivative or synthetic instruments or on the value of the Common
Stock, there can be no assurance that the hedging activities of Salomon Smith
Barney and its subsidiaries will not affect such prices or value.
13
<PAGE> 16
CAPITALIZATION
The following table sets forth the consolidated capitalization of Salomon
Smith Barney at September 30, 1998, as adjusted to give effect to the issuance
of the TARGETS, the issuance and sale of additional long-term debt of Salomon
Smith Barney after September 30, 1998 through the date hereof, and the
application of the proceeds from each of these transactions to the repayment of
short-term borrowings, as if such transactions had occurred on September 30,
1998.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1998
--------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN MILLIONS)
(UNAUDITED)
<S> <C> <C>
Short-term borrowings....................................... $16,128 $
Notes payable............................................... 10 10
Long-term debt.............................................. 20,905
------- ------
Total debt........................................ $37,043 $
======= ======
Salomon Smith Barney -- Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust holding solely
Subordinated Debt Securities of Salomon Smith Barney(1)... 345 345
Salomon Smith Barney -- Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust holding solely
subordinated deferrable interest debt securities of
Salomon Smith Barney(2)................................... 400 400
Stockholder's equity:
Common Stock(3) and additional paid-in capital............ 1,589 1,589
Retained earnings......................................... 7,120 7,120
Cumulative translation adjustment......................... 6 6
------- ------
Total stockholder's equity........................ 8,715 8,715
------- ------
Total capitalization........................................ $46,503 $
======= ======
</TABLE>
- ---------------
(1) The sole asset of SI Financing Trust I is $355,700,000 aggregate principal
amount of 9.25% Subordinated Debt Securities issued by Salomon Smith Barney
due June 30, 2026.
(2) The sole asset of SSBH Capital I is $412,372,000 aggregate principal amount
of 7.200% junior subordinated deferrable interest debt securities issued by
Salomon Smith Barney due January 28, 2038.
(3) Par value $.01 per share; 1,000 shares authorized; 1,000 shares issued and
outstanding.
ISSUER OF THE COMMON STOCK
According to publicly available documents, is engaged in the business
of . is currently subject to the informational requirements of the
Exchange Act. Accordingly, files reports (including its Annual Report on
Form 10-K for the fiscal year ended and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended ), proxy statements and other information
with the SEC. Copies of 's registration statements, reports, proxy
statements and other information may be inspected and copied at offices of the
SEC at the addresses listed above under "Summary Information -- Q&A -- Where Can
I Find Out More Information?"
is not affiliated with the Trust, will not receive any of the
proceeds from the sale of the TARGETS and will have no obligations with respect
to the TARGETS, the Treasury Securities or the Forward Contract. This Prospectus
relates only to the TARGETS offered hereby and does not relate to or the
Common Stock.
14
<PAGE> 17
HISTORICAL DATA ON THE COMMON STOCK
The Common Stock is traded on the Exchange under the symbol " ".
The following table sets forth, for each of the quarterly periods indicated, the
high and low sales price for the Common Stock, as reported on the , and the
cash dividends per share of Common Stock.
<TABLE>
<CAPTION>
DIVIDEND
DECLARED
HIGH LOW PER SHARE
------- ------- ---------
<S> <C> <C> <C>
1994
Quarter
First..................................................... $ $ $
Second....................................................
Third.....................................................
Fourth....................................................
1995
Quarter
First.....................................................
Second....................................................
Third.....................................................
Fourth....................................................
1996
Quarter
First.....................................................
Second....................................................
Third.....................................................
Fourth....................................................
1997
Quarter
First.....................................................
Second....................................................
Third.....................................................
Fourth....................................................
1998
Quarter
First.....................................................
Second....................................................
Third.....................................................
Fourth....................................................
1999
Quarter
First (through , 1999)........................
</TABLE>
- ---------------
According to 's Quarterly Report on Form 10-Q for the fiscal quarter
ended , 1998, as of , 1998, there were shares of Common Stock
outstanding.
Holders of TARGETS will not be entitled to any rights with respect to the
Common Stock (including, without limitation, voting rights or rights to receive
dividends or other distributions in respect thereof).
15
<PAGE> 18
TARGETS TRUST [II]
TARGETS Trust [II] is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust executed by Salomon Smith Barney, as
sponsor (in such capacity, the "Sponsor"), and the trustees of TARGETS Trust
[II] (as described below) and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware. Such declaration will be amended
and restated in its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The Declaration will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Upon issuance of the TARGETS, the purchasers thereof will own
all the TARGETS. See "Description of the TARGETS -- Book-Entry Only Issuance".
Salomon Smith Barney will directly or indirectly acquire all of the Common
Securities in an aggregate amount equal to 3% or more of the total capital of
the Trust. The Trust will use all the proceeds derived from the issuance of the
TARGETS and the Common Securities to purchase the Forward Contract and Treasury
Securities and, accordingly, the assets of the Trust will consist solely of the
Forward Contract and Treasury Securities. Of the total proceeds from the sale of
the Trust Securities, $ will be invested by the Trust in the Forward
Contract and $ will be invested by the Trust in the Treasury Securities. The
Trust exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Trust Securities in the Forward Contract and
the Treasury Securities, and (iii) engaging in only those other activities
necessary or incidental thereto.
The Trust's business and affairs are conducted by its Trustees, each
appointed by Salomon Smith Barney as holder of the Common Securities. Pursuant
to the Declaration, the number of trustees of the Trust will be four: The Chase
Manhattan Bank, a New York banking corporation that is unaffiliated with Salomon
Smith Barney, as the Institutional Trustee (the "Institutional Trustee"), Chase
Manhattan Bank Delaware, a Delaware state banking corporation with its principal
place of business in the State of Delaware, as the Delaware trustee (the
"Delaware Trustee"), and two individual trustees (the "Regular Trustees" and,
together with the Institutional Trustee and the Delaware Trustee, the
"Trustees") who will be persons who are employees or officers of, or who are
affiliated with Salomon Smith Barney. Initially the Regular Trustees will be
Michael J. Day and Charles W. Scharf, each of whom is an officer of Salomon
Smith Barney. The Institutional Trustee will act as the sole indenture trustee
under the Declaration for purposes of compliance with the Trust Indenture Act
until removed or replaced by the holder of the Common Securities. The Chase
Manhattan Bank will also act as indenture trustee (the "Guarantee Trustee")
under the Guarantee. See "Description of the Forward Contract" and "Description
of the Guarantee".
The Institutional Trustee will hold title to the Forward Contract for the
benefit of the holders of the Trust Securities and, in its capacity as the
holder, the Institutional Trustee will have the power to exercise all rights,
powers and privileges under the Indenture pursuant to which the Forward Contract
is issued. In addition, the Institutional Trustee will maintain exclusive
control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments made in respect of the Forward Contract and the
Treasury Securities for the benefit of the holders of the Trust Securities. The
Institutional Trustee will make payments of distributions and payments on
liquidation and otherwise to the holders of the Trust Securities out of funds
from the Property Account. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the TARGETS. Salomon Smith Barney, as direct or
indirect holder of all the Common Securities, will have the right, subject to
certain restrictions contained in the Declaration, to appoint, remove or replace
any Trustees and to increase or decrease the number of Trustees. Salomon Smith
Barney will pay all fees and expenses related to the Trust and the offering of
the Trust Securities. See "Description of the TARGETS -- Miscellaneous".
The rights of the holders of the TARGETS, including economic rights, rights
to information and voting rights, are set forth in the Declaration, the Delaware
Business Trust Act, (the "Trust Act") and the Trust Indenture Act. See
"Description of the TARGETS".
The location of the principal executive office of the Trust is c/o Salomon
Smith Barney Holdings Inc., 388 Greenwich Street, New York, New York 10013 and
its telephone number is (212) 816-6000.
16
<PAGE> 19
DESCRIPTION OF THE TARGETS
The TARGETS will be issued pursuant to the terms of the Declaration. The
Declaration will be qualified as an indenture under the Trust Indenture Act. The
Institutional Trustee, The Chase Manhattan Bank, will act as the institutional
trustee for the TARGETS under the Declaration for purposes of compliance with
the provisions of the Trust Indenture Act. The terms of the TARGETS will include
those stated in the Declaration and those made part of the Declaration by the
Trust Indenture Act. Pursuant to the Declaration, every holder of TARGETS will
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, the Declaration. The following summary of the material terms and
provisions of the TARGETS does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Declaration and the Guarantee
(forms of which are filed as exhibits to the Registration Statement of which
this Prospectus is a part), the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue, on behalf of the
Trust, the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned, directly or
indirectly, by Salomon Smith Barney. The Common Securities rank pari passu with,
and payments will be made thereon on a pro rata basis with, the TARGETS, except
that upon the occurrence of an Acceleration Event, the rights of the holders of
the Common Securities to receive payments will be subordinated to the rights of
the holders of the TARGETS. The Declaration does not permit the issuance by the
Trust of any securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust. Pursuant to the Declaration, the Institutional
Trustee will hold title to the Forward Contract and the Treasury Securities for
the benefit of the holders of the Trust Securities. The payment of distributions
out of money held by the Trust and payments upon maturity of the TARGETS out of
money held by the Trust are guaranteed by Salomon Smith Barney to the extent
described under "Description of the Guarantee". The Guarantee will be held by
The Chase Manhattan Bank, the Guarantee Trustee, for the benefit of the holders
of the TARGETS. The Guarantee does not cover payment of distributions when the
Trust does not have sufficient available funds to pay such distributions. In
such event, the remedies of a holder of the TARGETS are to (i) vote to direct
the Institutional Trustee to enforce the Institutional Trustee's rights under
the Forward Contract and Treasury Securities, (ii) if the Institutional Trustee
fails to enforce its rights against Salomon Smith Barney, initiate a proceeding
against Salomon Smith Barney to enforce the Institutional Trustee's rights under
the Forward Contract or (iii) if the failure by the Trust to pay distributions
is attributable to the failure of Salomon Smith Barney to pay amounts in respect
of the Forward Contract, institute a proceeding directly against Salomon Smith
Barney for enforcement of payment to such holder of the amounts owed on such
holder's pro rata interest in the Forward Contract. See "-- Acceleration of
Maturity Date; Enforcement of Rights" and "-- Voting Rights".
The aggregate number of TARGETS to be issued will be (see
"Underwriting"). The TARGETS will be issued in fully registered form. TARGETS
will not be issued in bearer form. See "-- Book-Entry Only Issuance".
MATURITY PAYMENT
The TARGETS will mature on the Maturity Date, subject to acceleration to
the Accelerated Maturity Date upon an Acceleration Event. See "-- Acceleration
of Maturity Date; Enforcement of Rights". On the Maturity Date, holders of the
TARGETS will be entitled to receive, to the extent the Trust has assets
available therefor, the Maturity Payment with respect to each TARGETS. On the
Maturity Date, holders of TARGETS will also receive a final Quarterly
Distribution with respect to each TARGETS, plus any accrued and unpaid Yield
Enhancement Payments.
The "Maturity Payment" with respect to each TARGETS will be an amount equal
to the product of (A) the Current Market Price of the Common Stock as of the
Maturity Date multiplied by (B) the Exchange Rate as of the Maturity Date.
The "Current Market Price" will be the average daily closing sale price
(or, if no closing sale price is reported, the last reported sale price) of the
Common Stock as reported on the Exchange for the 10 Trading Days (as
defined herein) immediately prior to but not including the date one Business Day
before the Maturity Date or the Accelerated Maturity Date, as the case may be,
or, if the Common Stock is not traded on the Exchange on any
17
<PAGE> 20
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securities
exchange, the last quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar organization.
If the Current Market Price of the Common Stock as of the Maturity Date is
less than or equal to the Appreciation Cap, then the Exchange Rate shall be
, and if the Current Market Price of the Common Stock as of the Maturity
Date is greater than the Appreciation Cap, then the Exchange Rate shall be a
fraction (rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th), the numerator of which
is the Appreciation Cap times and the denominator of which is the Current
Market Price of the Common Stock as of the Maturity Date. The Exchange Rate and
the Appreciation Cap are subject to certain dilution adjustments as described
below. See "-- Dilution Adjustments".
ACCELERATION OF MATURITY DATE; ENFORCEMENT OF RIGHTS
If at any time an Acceleration Event shall occur and be continuing, the
Regular Trustees shall give written instructions to the Institutional Trustee to
sell the Treasury Securities, dissolve the Trust and, after satisfaction of
creditors of the Trust, cause to be distributed, as soon as is practicable
following the occurrence of such Acceleration Event, to the holders of the
TARGETS in liquidation of such holders' interests in the Trust, the Accelerated
Maturity Payment with respect to each TARGETS and a pro rata portion of the
Treasury Proceeds, plus any accrued and unpaid Yield Enhancement Payments.
The "Accelerated Maturity Payment" with respect to each TARGETS will be
paid out of amounts received by the Trust from Salomon Smith Barney in respect
of the Forward Contract and will be equal to the product of (A) the Current
Market Price of the Common Stock as of the Accelerated Maturity Date multiplied
by (B) the Exchange Rate as of the Accelerated Maturity Date. The "Accelerated
Maturity Date" will be the date of the occurrence of the event or events
constituting such Acceleration Event.
The "Treasury Proceeds" will be the amount received by the Trust as
proceeds from the sale of the Treasury Securities upon the occurrence of an
Acceleration Event. The Regular Trustees will send the Institutional Trustee
written notice and instructions to liquidate the Treasury Securities on an
Accelerated Maturity Date. Upon receiving such notice, the Institutional Trustee
will solicit at least three bids and sell and transfer the Treasury Securities
to the highest of the three bidders.
There can be no assurance as to the amount of either any Accelerated
Maturity Payment or the Treasury Proceeds which, in either case, may be
distributed to holders of the TARGETS upon a dissolution and liquidation of the
Trust. Accordingly, there can be no assurance as to the amount that a holder of
TARGETS may receive on the Accelerated Maturity Date.
"Acceleration Event" means any one of the following events (whatever the
reason for such Acceleration Event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (i) a Tax Event, (ii) an Investment
Company Event or (iii) a Bankruptcy Event.
"Tax Event" means that Salomon Smith Barney shall have requested and
received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent tax counsel experienced in such matters (a
"Trust Dissolution Tax Opinion") to the effect that there has been (a) an
amendment to, change in or announced proposed change in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of Salomon
Smith Barney or any of its subsidiaries or the Trust, or a threatened challenge
asserted in writing against any other taxpayer that has raised capital through
the issuance of securities that are substantially similar to the Forward
Contract or the TARGETS, which amendment or change is adopted or which proposed
change, decision or pronouncement is announced or which action, clarification or
challenge occurs on or after the date of this Prospectus
18
<PAGE> 21
(collectively a "Tax Action"), which Tax Action relates to any of the items
described in (i) and (ii) below, and that there is more than an insubstantial
risk that (i) the Trust is, or will be, subject to United States federal income
tax with respect to income accrued or received on the Forward Contract or the
Treasury Securities, or (ii) the Trust is, or will be, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means that Salomon Smith Barney shall have
requested and received and shall have delivered to the Regular Trustees an
opinion of nationally recognized independent legal counsel experienced in such
matters to the effect that as a result of the occurrence on or after the date
hereof of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
"Bankruptcy Event" means either of the following shall have occurred: (i)
the entry of a decree or order (a) of relief in respect of Salomon Smith Barney
by a court having jurisdiction in the premises in an involuntary case under the
federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or (b)
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of Salomon Smith Barney or of any substantial part
of its property, or (c) ordering the winding up or liquidation of its affairs,
and, in each case, the continuance of any such decree or order unstayed and in
effect for a period of 90 consecutive days; or (ii) the commencement by Salomon
Smith Barney of a voluntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or State bankruptcy,
insolvency or other similar law, or the consent by it to the entry of an order
for relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of Salomon Smith Barney or of any substantial part of its
property, or the making by it of an assignment for the benefit of its creditors,
or the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by Salomon Smith Barney in
furtherance of any action.
"Pro rata" means, with respect to any payment, distribution, or treatment,
proportionately to each holder of Trust Securities according to the aggregate
beneficial interests in the assets of the Trust represented by the Trust
Securities held by the relevant holder in relation to the aggregate beneficial
interests in the assets of the Trust represented by all Trust Securities
outstanding unless, in relation to a payment, an Acceleration Event has occurred
and is continuing, in which case any funds available to make such payment will
be paid first to each holder of the TARGETS proportionately according to the
aggregate beneficial interests in the assets of the Trust represented by the
TARGETS held by the relevant holder relative to the aggregate beneficial
interests in the assets of the Trust represented by all TARGETS outstanding, and
then only after satisfaction of all amounts owed to the holders of the TARGETS,
to each holder of Common Securities proportionately according to the aggregate
beneficial interests in the assets of the Trust represented by the Common
Securities held by the relevant holder relative to the aggregate beneficial
interests in the assets of the Trust represented by all Common Securities
outstanding.
On the date fixed for any payment of the Accelerated Maturity Payment or
the Treasury Proceeds, (i) the TARGETS and the Common Securities will no longer
be deemed to be outstanding and (ii) each TARGETS and Common Security will be
deemed to represent the right to receive an Accelerated Maturity Payment and a
pro rata portion of the Treasury Proceeds, plus any accrued and unpaid Yield
Enhancement Payments. If the Accelerated Maturity Payments (or any accrued and
unpaid Yield Enhancement Payments) can be paid only in part because the Trust
has insufficient assets available to pay in full such amounts, then the amounts
payable directly by the Trust in respect of the TARGETS will be paid on a pro
rata basis. In addition, in the case of a default by Salomon Smith Barney on its
obligations under the Guarantee, the holders of the TARGETS will have a
preference over the holders of the Common Securities with respect to amounts
owed on the Trust Securities.
Subject to the requirements of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority of the TARGETS have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee, or direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Forward Contract and
the Treasury Securities, to (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or exercising
any trust or power conferred on the Indenture Trustee with respect to the
Forward Contract, (ii) direct
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<PAGE> 22
the time, method and place of conducting any proceeding for any remedy available
to the Institutional Trustee or exercise any trust or power conferred on the
Institutional Trustee with respect to the Treasury Securities, (iii) waive the
consequences of any Acceleration Event under the Indenture that are waivable
under the Indenture, (iv) exercise any right to rescind or annul a declaration
that any Accelerated Maturity Payment shall be due and payable or (v) consent to
any amendment, modification or termination of the Indenture or the Forward
Contract where such consent shall be required, provided, however, that, where a
consent or action under the Indenture would require the consent or act of
holders of more than a majority of the beneficial interests in the Forward
Contract (a "Super Majority"), only the holders of at least a Super Majority of
the TARGETS may direct the Institutional Trustee to give such consent or take
such action. The Institutional Trustee shall notify all holders of TARGETS of
any notice of default received from the Indenture Trustee with respect to the
Forward Contract. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy available to the Institutional Trustee, the
Institutional Trustee, as holder of the Forward Contract and the Treasury
Securities, shall not take any of the actions described in clauses (i), (ii),
(iii), (iv) or (v) above unless the Institutional Trustee has obtained an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that as a result of such action, the Trust will not fail
to be classified as a grantor trust for United States federal income tax
purposes.
If the Institutional Trustee fails to enforce its rights under the Forward
Contract, any holder of TARGETS may directly institute a legal proceeding
against Salomon Smith Barney to enforce the Institutional Trustee's rights under
the Forward Contract, without first instituting a legal proceeding against the
Institutional Trustee or any other person or entity. If Salomon Smith Barney
fails to pay amounts owed on the Forward Contract on the date such amounts are
otherwise payable, then a holder of TARGETS may also directly institute a direct
action in respect of the amounts owed on such holder's pro rata interest in the
Forward Contract on or after the due date specified in the Forward Contract,
without first (i) directing the Institutional Trustee to enforce the terms of
the Forward Contract or (ii) instituting a legal proceeding directly against
Salomon Smith Barney to enforce the Institutional Trustee's rights under the
Forward Contract. Except as provided in the preceding sentence, the holders of
TARGETS will not be able to exercise directly any other remedy available to the
holder of the Forward Contract. In connection with such direct action, Salomon
Smith Barney will be subrogated to the rights of such holder of TARGETS under
the Declaration to the extent of any payment made by Salomon Smith Barney to
such holder of TARGETS in such direct action.
A waiver of an Acceleration Event under the Indenture by the Institutional
Trustee at the direction of the holders of the TARGETS will constitute a waiver
of the corresponding Acceleration Event under the Declaration.
Any required approval or direction of holders of TARGETS may be given at a
separate meeting of holders of TARGETS convened for such purpose, at a meeting
of holders of Trust Securities or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which holders of TARGETS are
entitled to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be mailed to each holder of record of TARGETS. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of TARGETS will be required for the Trust to cancel TARGETS in
accordance with the Declaration. It is anticipated that the only holder of
TARGETS issued in book-entry form will be Cede & Co., as nominee of DTC, and
each Beneficial Owner (as defined herein) of TARGETS will be permitted to
exercise the rights of holders of TARGETS only indirectly through DTC and its
Participants (as defined herein).
Notwithstanding that holders of TARGETS are entitled to vote or consent
under any of the circumstances described above, any of the TARGETS that are
owned at such time by Salomon Smith Barney or any entity directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
Salomon Smith Barney, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
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<PAGE> 23
QUARTERLY DISTRIBUTIONS
Holders of TARGETS will be entitled to receive distributions at the rate
per TARGETS of $ per quarter, payable on each , , and ,
commencing , 1999.
The Quarterly Distributions will be paid by the Trust out of (i) payments
under the Treasury Securities and (ii) the Yield Enhancement Payments made to
the Trust by Salomon Smith Barney under the Forward Contract. Depending on
market conditions at the time of pricing of the TARGETS for initial sale to the
public, the amount of the Yield Enhancement Payments may be zero or a nominal
amount. Of each Quarterly Distribution payable to holders of the TARGETS, $
will be paid out of payments received by the Trust under the Treasury Securities
and $ will be paid out of Yield Enhancement Payments received by the Trust
from Salomon Smith Barney under the Forward Contract.
The Treasury Securities and the Forward Contract will be the sole assets of
the Trust and will be held by the Institutional Trustee on behalf of the Trust.
The ability of the Trust to make Quarterly Distributions on the TARGETS is
therefore entirely dependent on receipt by the Trust of payments with respect to
both the Treasury Securities and the Forward Contract.
Under the Forward Contract, any Yield Enhancement Payments which are
payable, but are not punctually paid, by Salomon Smith Barney on their scheduled
due date will cease to be due and payable and may instead be paid, together with
interest thereon at % per annum compounded quarterly, on a future date
chosen by Salomon Smith Barney in its sole discretion. Any such Yield
Enhancement Payments that are not paid by Salomon Smith Barney prior to maturity
will become due and payable on the Maturity Date or the Accelerated Maturity
Date, as the case may be.
Assuming Quarterly Distributions on the TARGETS with a yield of % per
annum, set forth below is an example of how the cash flows on the TARGETS would
be comprised. The Trust will invest approximately % to % of the
proceeds of the offering in the Treasury Securities. The Quarterly Distributions
may require a larger cash flow than will be provided by the Treasury Securities,
in which case Yield Enhancement Payments would be paid by the obligor of the
Forward Contract pursuant to the following schedule and based on the following
assumptions:
<TABLE>
<S> <C>
Offering Size:.............................................. $
Annual Cash Flow:........................................... %
Payment Frequency:.......................................... Quarterly
Settlement Date:............................................ , 1999
Maturity Date:..............................................
</TABLE>
<TABLE>
<CAPTION>
TREASURY YIELD
SECURITY TREASURY ENHANCEMENT
MATURITY UNIT PURCHASE PURCHASE SECURITY PAYMENTS TOTAL EQUIVALENT
DATE COST AMOUNT COST CASH FLOW CASH FLOW CASH FLOW COUPON
- -------- ---- -------- -------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
% $ $ $ $ %
% %
% %
% %
% %
% %
% %
% %
-------- ------- ------- -------
$ $ $ $
======== ======= ======= =======
</TABLE>
A portion of each Quarterly Distribution should represent a return to the
holder of a TARGETS of that holder's initial investment in the TARGETS for tax
purposes. The following table sets forth information regarding the distributions
to be received on the Treasury Securities to be acquired by the Trust with a
portion of the proceeds received by the Trust from the sale of the Trust
Securities, the portion of each year's distributions that should
21
<PAGE> 24
constitute a return of capital for U.S. federal income tax purposes and the
amount of original issue discount that should accrue on such Treasury Securities
with respect to a holder who acquires its Trust Securities at the issue price
from the Underwriters pursuant to the original offering. See "Certain Federal
Income Tax Considerations".
<TABLE>
<CAPTION>
ANNUAL GROSS ANNUAL INCLUSION OF
ANNUAL GROSS DISTRIBUTIONS FROM ANNUAL RETURN OF ORIGINAL ISSUE
DISTRIBUTIONS FROM TREASURY SECURITIES CAPITAL PER DISCOUNT IN INCOME
YEAR TREASURY SECURITIES PER TARGETS TARGETS PER TARGETS
- ---- ------------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
$ $ $ $
</TABLE>
DILUTION ADJUSTMENTS
The Exchange Rate and the Appreciation Cap will be subject to adjustment
from time to time in certain situations. Any such adjustments could have an
impact on the Maturity Payments or Accelerated Maturity Payments to be paid by
Salomon Smith Barney to the Trust upon maturity of the Forward Contract and,
therefore, on the Maturity Payments or Accelerated Maturity Payments to be paid
by the Trust to the holders of TARGETS.
If shall, after the date of the closing of the offering contemplated
hereby (the "Closing Date"), (i) pay a stock dividend or make a distribution
with respect to the Common Stock in shares of such stock; (ii) subdivide or
split the outstanding shares of the Common Stock into a greater number of
shares; (iii) combine the outstanding shares of the Common Stock into a smaller
number of shares; or (iv) issue by reclassification of shares of the Common
Stock any shares of other common stock of , then, in each such case, the
Exchange Rate shall be multiplied by a dilution adjustment equal to the number
of shares of Common Stock (or in the case of a reclassification referred to in
clause (iv) above, the number of shares of other common stock of issued
pursuant thereto), or the fraction thereof, that a holder who held one share of
Common Stock immediately prior to such event would be entitled solely by reason
of such event to hold immediately after such event. The Appreciation Cap will
also be adjusted in such case in the manner described below.
If shall, after the Closing Date, issue, or declare a record date in
respect of an issuance of, rights or warrants to all holders of Common Stock
entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the Then-Current Market Price of the Common Stock (other
than rights to purchase Common Stock pursuant to a plan for the reinvestment of
dividends or interest), then, in each such case, the Exchange Rate shall be
multiplied by a dilution adjustment equal to a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
the time the adjustment is effected by reason of the issuance of such rights or
warrants, plus the number of additional shares of Common Stock offered for
subscription or purchase pursuant to such rights or warrants, and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to the time the adjustment is effected, plus the number of
additional shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so offered for subscription or purchase
pursuant to such rights or warrants would purchase at the Then-Current Market
Price of the Common Stock, which shall be determined by multiplying the total
number of shares so offered for subscription or purchase by the exercise price
of such rights or warrants and dividing the product so obtained by such
Then-Current Market Price. To the extent that, after the expiration of such
rights or warrants, the shares of Common Stock offered thereby shall not have
been delivered, the Exchange Rate shall be further adjusted to equal the
Exchange Rate which would have been in effect had such adjustment for the
issuance of such rights or warrants been made upon the basis of delivery of only
the number of shares of Common Stock actually delivered. The Appreciation Cap
shall also be adjusted in the manner described below.
If shall, after the Closing Date, declare or pay a dividend or make a
distribution to all holders of Common Stock, in either case, of evidences of its
indebtedness or other non-cash assets (excluding any dividends or distributions
referred to above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to above), then, in each such case, the Exchange Rate shall
be multiplied by a dilution adjustment equal to a fraction, the numerator of
which shall be the Then-Current Market Price of the Common Stock, and the
denominator of which shall be such Then-Current Market Price less the fair
market value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by Salomon Smith Barney, whose
determination shall be final) as of the time the adjustment is effected of the
portion of the assets, evidences of indebtedness, rights or warrants so
distributed or issued applicable to one share of Common Stock. The Appreciation
Cap shall also be adjusted in the manner
22
<PAGE> 25
described below. Notwithstanding the foregoing, in the event that, with respect
to any dividend or distribution to which this paragraph would otherwise apply,
the denominator in the fraction referred to in the above formula is less than
$1.00 (or is a negative number), then Salomon Smith Barney may, at its option,
elect to have the adjustment provided by this paragraph not be made and in lieu
of such adjustment, on the Maturity Date, the holders of the TARGETS shall be
entitled to receive an additional amount of cash equal to the product of the
number of TARGETS held by such holder multiplied by the fair market value of
such indebtedness, assets, rights or warrants (determined, as of the date such
dividend or distribution is made, by a nationally recognized independent
investment banking firm retained for this purpose by Salomon Smith Barney, whose
determination shall be final) so distributed or issued applicable to one share
of Common Stock.
If, after the Closing Date, declares a record date in respect of a
distribution of cash (other than any Permitted Dividends (as defined herein),
any cash distributed in consideration of fractional shares of Common Stock and
any cash distributed in a Reorganization Event (as defined herein)), by dividend
or otherwise, to all holders of the Common Stock, or makes an Excess Purchase
Payment (as defined herein), then the Exchange Rate shall be multiplied by a
dilution adjustment equal to a fraction, the numerator of which shall be the
Then-Current Market Price of the Common Stock on such record date, and the
denominator of which shall be such Then-Current Market Price less the amount of
such distribution applicable to one share of Common Stock which would not be a
Permitted Dividend (or in the case of an Excess Purchase Payment, less the
aggregate amount of such Excess Purchase Payment for which adjustment is being
made at such time divided by the number of shares of Common Stock outstanding on
such record date).
For purposes of these adjustments, (A) "Permitted Dividend" means any
quarterly cash dividend in respect of the Common Stock, other than a quarterly
cash dividend that exceeds the immediately preceding quarterly cash dividend,
and then only to the extent that the per share amount of such dividend results
in an annualized dividend yield on the Common Stock in excess of 10% and (B)
"Excess Purchase Payment" means the excess, if any, of (x) the cash and the
value (as determined by a nationally recognized independent investment banking
firm retained for this purpose by Salomon Smith Barney, whose determination
shall be final) of all other consideration paid by with respect to one
share of Common Stock acquired in a tender offer or exchange offer by ,
over (y) the Then-Current Market Price of the Common Stock. The Appreciation Cap
shall also be adjusted in the manner described in the following paragraph.
Notwithstanding the foregoing, in the event that, with respect to any dividend
or distribution or Excess Purchase Payment to which this paragraph would
otherwise apply, the denominator in the fraction referred to in the formula in
the preceding paragraph is less than $1.00 (or is a negative number), then
Salomon Smith Barney may, at its option, elect to have the adjustment provided
by this paragraph not be made and in lieu of such adjustment, on the Maturity
Date, the holders of the TARGETS shall be entitled to receive an additional
amount of cash equal to the product of the number of TARGETS held by such holder
multiplied by the sum of the amount of cash plus the fair market value of such
other consideration (determined, as of the date such dividend or distribution is
made, by a nationally recognized independent investment banking firm retained
for this purpose by Salomon Smith Barney, whose determination shall be final) so
distributed (or applied to the acquisition of the Common Stock in such a tender
offer or exchange offer) applicable to one share of Common Stock.
If any adjustment is made to the Exchange Rate pursuant to the preceding
five paragraphs, an adjustment will also be made to the Appreciation Cap. The
required adjustment will be made by dividing the Appreciation Cap by the
relevant dilution adjustment. If, during any Calculation Period used in
calculating the Current Market Price, the Then-Current Market Price or the
Transaction Value (as defined herein), there occurs any event requiring an
adjustment to be effected as described herein, then the Closing Price for each
Trading Day in such Calculation Period occurring prior to the day on which such
adjustment is effected will be adjusted by being divided by the relevant
dilution adjustment.
Each dilution adjustment shall be effected as follows: (i) in the case of
any dividend, distribution or issuance, at the opening of business on the
Business Day next following the record date for determination of holders of
Common Stock entitled to receive such dividend, distribution or issuance or, if
the announcement of any such dividend, distribution, or issuance is after such
record date, at the time such dividend, distribution or issuance shall be
announced by ; (ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction; (iii) in the case
of any Excess Purchase Payment for which announces, at or prior to the time
it commences the relevant share repurchase, the repurchase price per share for
shares proposed to be repurchased,
23
<PAGE> 26
on the date of such announcement; and (iv) in the case of any other Excess
Purchase Payment on the date that the holders of the repurchased shares become
entitled to payment in respect thereof.
All dilution adjustments will be rounded upward or downward to the nearest
1/10,000th (or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th). No adjustment in the Exchange Rate will be required unless such
adjustment would require an increase or decrease of at least one percent
therein, provided, however, that any adjustments which by reason of this
sentence are not required to be made will be carried forward and taken into
account in any subsequent adjustment. If any announcement or declaration of a
record date in respect of a dividend, distribution, issuance or repurchase
requiring an adjustment as described herein is subsequently canceled by ,
or such dividend, distribution, issuance or repurchase fails to receive
requisite approvals or fails to occur for any other reason, then, upon such
cancellation, failure of approval or failure to occur, the Exchange Rate will be
further adjusted to the Exchange Rate which would then have been in effect had
adjustment for such event not been made. If a Reorganization Event occurs after
the occurrence of one or more events requiring an adjustment as described
herein, the dilution adjustments previously applied to the Exchange Rate in
respect of such events will not be rescinded but will be applied to the new
Exchange Rate provided for below.
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any dilution adjustment, means the average Closing Price per share of
Common Stock for the Calculation Period of 10 Trading Days (as defined below)
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date, immediately prior to the earlier of the time such
adjustment is effected and the related ex-date), provided that if no Closing
Price for the Common Stock is determined for one or more (but not all) of such
Trading Days, such Trading Day shall be disregarded in the calculation of the
Then-Current Market Price (but no additional trading days shall be added to the
Calculation Period). If no Closing Price for the Common Stock may be determined
for any of such Trading Days, the Then-Current Market Price shall be the Closing
Price for the Common Stock for the most recent Trading Day prior to such 10
Trading Days for which a Closing Price for the Common Stock may be determined
pursuant to the "Closing Price" definition. The "ex-date" with respect to any
dividend, distribution or issuance shall mean the first date on which the shares
of the Common Stock trade regular way on their principal market without the
right to receive such dividend, distribution or issuance.
"Trading Day" means a day on which the Common Stock (A) is not suspended
from trading on any national or regional securities exchange, securities market
or association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security. "Calculation Period" means any period of Trading Days
for which an average security price must be determined pursuant to the
Indenture. "Closing Price" of the Common Stock or any marketable security on any
Trading Day in the Calculation Period means the daily closing sale price (or, if
no closing sale price is reported, the last reported sale price) of such
security as reported on the on any such day in the Calculation Period or,
if such security is not traded on the on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which if such security is so listed, or if such security is not so listed on a
United States national or regional securities exchange, the last quoted bid
price in the over-the-counter market as reported by the National Quotation
Bureau or similar organization.
In the event of (i) any consolidation or merger of , or any surviving
entity or subsequent surviving entity of (a " Successor"), with or into
another entity (other than a merger or consolidation in which is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of or another issuer), (ii) any sale, transfer, lease or
conveyance to another corporation of the property of or any Successor
as an entirety or substantially as an entirety, (iii) any statutory exchange of
securities of or any Successor with another issuer (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution or
winding up of or any Successor (any such event described in clause
(i), (ii), (iii) or (iv), a "Reorganization Event"), the Exchange Rate shall be
adjusted so that, on the Maturity Date or Accelerated Maturity Date, each holder
of the TARGETS shall receive cash in an amount equal to the product of the
number of TARGETS held by such holder multiplied by (i) if the Transaction Value
(as defined herein) is less than or equal to the Appreciation Cap,
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times the Transaction Value, and (ii) if the Transaction Value is greater than
the Appreciation Cap, times the Appreciation Cap.
"Transaction Value" means the sum of: (a) for any cash received in any such
Reorganization Event, the amount of cash received per share of Common Stock; (b)
for any property other than cash or Marketable Securities (as defined herein)
received in any such Reorganization Event, an amount equal to the market value
on the date the Reorganization Event is consummated of such property received
per share of Common Stock (as determined by a nationally recognized independent
investment banking firm retained for this purpose by Salomon Smith Barney, whose
determination shall be final); and (c) for any Marketable Securities received in
any such Reorganization Event, an amount equal to the average Closing Price per
share of such Marketable Securities for the Calculation Period of 10 Trading
Days immediately prior to the Maturity Date or Accelerated Maturity Date
multiplied by the number of such Marketable Securities received for each share
of Common Stock, provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days
such Trading Day shall be disregarded in the calculation of such average Closing
Price (but no additional Trading Days shall be added to the Calculation Period).
If no Closing Price for the Marketable Securities may be determined for all such
Trading Days, the calculation in the preceding clause (c) shall be based on the
most recently available Closing Price for the Marketable Securities prior to
such 10 Trading Days.
"Marketable Securities" means any perpetual equity securities or debt
securities with a stated maturity after the Maturity Date, in each case that are
listed on a U.S. national securities exchange or reported by the Nasdaq Stock
Market, Inc. The number of shares of any equity securities constituting
Marketable Securities included in the calculation of Transaction Value pursuant
to clause (c) of the preceding paragraph shall be subject to adjustment if any
event that would, had it occurred with respect to the Common Stock or ,
have required an adjustment as described above shall occur with respect to such
Marketable Securities or the issuer thereof between the time of the
Reorganization Event and the Maturity Date (or Accelerated Maturity Date).
Adjustment for such subsequent events shall be as nearly equivalent as
practicable to the adjustments described above.
Salomon Smith Barney shall be responsible for the effectuation and
calculation of any adjustment described herein and shall furnish the Indenture
Trustee with notice of any such adjustment.
PAYMENT PROCEDURES
Distributions on the TARGETS will be payable to the holders thereof as they
appear on the books and records of the Trust at the close of business on the
relevant record dates. While the TARGETS remain in book-entry only form, the
relevant record dates for distributions of any Maturity Payments or Accelerated
Maturity Payments (and any accrued and unpaid Yield Enhancement Payments) with
respect to the TARGETS shall be one Business Day prior to the date such Maturity
Payments or Accelerated Maturity Payments, as the case may be, are received by
the Trust with respect to the Forward Contract. While the TARGETS remain in
book-entry only form, the relevant record date for distribution of the Treasury
Proceeds to holders of TARGETS shall be one Business Day prior to the date such
Treasury Proceeds are received by the Trust upon liquidation of the Treasury
Securities. While the TARGETS remain in book-entry only form, the relevant
record dates for any Quarterly Distributions shall be one Business Day prior to
the relevant payment dates, which payment dates shall correspond to the dates on
which payments are received by the Trust in respect of, and in accordance with
the terms of, the Treasury Securities and the Forward Contract. The relevant
record dates for the Common Securities shall be the same record dates as for the
TARGETS. If the TARGETS shall not continue to remain in book-entry only form,
the relevant record dates shall conform to the rules of any securities exchange
on which they are listed and, if none, shall be 15 days before the relevant
payment dates, which payment dates shall correspond to the dates on which
payments are made in respect of, and in accordance with the terms of, the
Treasury Securities and the Forward Contract. Distributions payable on any
TARGETS that are not punctually paid on any payment date, as a result of either
Salomon Smith Barney having failed to make a payment under the Forward Contract
or the U.S. Government having failed to make a payment in respect of the
Treasury Securities, will cease to be payable to the person in whose name such
TARGETS are registered on the relevant record date, and such defaulted
distribution will instead be payable to the person in whose name such TARGETS
are registered on a special record date which shall be the date on which the
amount of the defaulted distributions are actually received by the Trust. If any
date on which distributions are payable on the TARGETS is not a Business Day,
then payment of the distribution payable on such date will be
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made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. A "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in The City of New York
are authorized or required by law to close.
Payments in respect of the TARGETS represented by global certificates (as
defined below under "Book-Entry Only Issuance") shall be made to DTC, which will
credit the relevant accounts at DTC on the scheduled payment dates or, in the
case of TARGETS in the form of certificated securities, if any, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the register.
VOTING RIGHTS
Except as described in this Prospectus under "Description of the
TARGETS -- Acceleration of Maturity Date; Enforcement of Rights" and
"Description of the Guarantee -- Modification of the Guarantee; Assignment", and
except as provided under the Trust Act, the Trust Indenture Act and as otherwise
required by law and the Declaration, the holders of the TARGETS will have no
voting rights.
In the event the consent of the Institutional Trustee, as the holder of the
Forward Contract, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture, the Institutional Trustee shall
request the written direction of the holders of the Trust Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a majority
of the Trust Securities voting together as a single class, provided, however,
that where any amendment, modification or termination under the Indenture would
require the consent of a Super Majority, the Institutional Trustee may only give
such consent at the direction of the holders of at least the proportionate
number of the Trust Securities represented by the relevant Super Majority of the
aggregate beneficial interests in the Forward Contract. The Institutional
Trustee will be under no obligation to take any such action in accordance with
the directions of the holders of the Trust Securities unless the Institutional
Trustee has obtained an opinion of a nationally recognized independent tax
counsel experienced in such matters to the effect that for United States federal
income tax purposes the Trust will not be classified as other than a grantor
trust.
The procedures by which holders of TARGETS may exercise their voting rights
are described below. See "--Book-Entry Only Issuance".
Holders of the TARGETS will have no rights to appoint or remove the
Trustees, who may be appointed, removed or replaced solely by Salomon Smith
Barney as the indirect or direct holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee and the
Delaware Trustee), provided that, if any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to effect, (i) any
action that would adversely affect the powers, preferences or special rights of
the Trust Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust other
than pursuant to the terms of the Declaration, then the holders of the Trust
Securities, voting together as a single class, will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the holders of at least a majority of the Trust
Securities affected thereby, provided that if any amendment or proposal referred
to in clause (i) above would adversely affect only the TARGETS or the Common
Securities, then only holders of the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a majority of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
fail to be classified as a grantor trust for United States federal income tax
purposes, (ii) reduce or otherwise adversely affect the powers of the
Institutional Trustee in
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contravention of the Trust Indenture Act or (iii) cause the Trust to be deemed
an "investment company" which is required to be registered under the 1940 Act.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE TRUST
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity, except as
described below. The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the holders of the Trust Securities, the Delaware Trustee or the
Institutional Trustee consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State, provided that
(i) such successor entity either (x) expressly assumes all of the obligations of
the Trust under the Trust Securities or (y) substitutes for the TARGETS other
securities having substantially the same terms as the Trust Securities (the
"Successor Securities"), so long as the Successor Securities rank the same as
the Trust Securities with respect to distributions and payments upon
liquidation, maturity and otherwise, (ii) Salomon Smith Barney expressly
acknowledges a trustee of such successor entity possessing the same powers and
duties as the Institutional Trustee in its capacity as the holder of the Forward
Contract and the Treasury Securities, (iii) Successor Securities to the TARGETS
are listed, or any Successor Securities to the TARGETS will be listed upon
notification of issuance, on any national securities exchange or with any
organization on which the TARGETS are then listed or quoted, (iv) such merger,
consolidation, amalgamation or replacement does not cause the TARGETS (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holder's
interest in the new entity), (vi) such successor entity has a purpose identical
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement will not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the holders' interest in the new entity),
(B) following such merger, consolidation, amalgamation or replacement, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (C) following such merger,
consolidation, amalgamation or replacement, the Trust (or the successor entity)
will continue to be classified as a grantor trust for U.S. federal income tax
purposes and (viii) Salomon Smith Barney guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, without
the consent of holders of all of the Trust Securities, consolidate, amalgamate,
merge with or into, or be replaced by any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it, if in the
opinion of a nationally recognized independent tax counsel experienced in such
matters such consolidation, amalgamation, merger or replacement would cause the
Trust or the Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes. In addition, so long as any TARGETS
are outstanding and are not held entirely by Salomon Smith Barney, the Trust may
not voluntarily liquidate, dissolve, wind-up or terminate except as described
above under "-- Acceleration of Maturity Date; Enforcement of Rights".
BOOK-ENTRY ONLY ISSUANCE
DTC will act as securities depositary for the TARGETS. The TARGETS will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global TARGETS certificates,
representing the total aggregate number of TARGETS, will be issued and will be
deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global TARGETS as
represented by a global certificate.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code
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and a "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants in DTC include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. (the "NASD"). Access to the DTC system
is also available to others, such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the Commission.
Purchases of TARGETS within the DTC system must be made by or through
Direct Participants, which will receive a credit for the TARGETS on DTC's
records. The ownership interest of each actual purchaser of TARGETS ("Beneficial
Owner") is in turn to be recorded on the Direct Participants' and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased TARGETS. Transfers of ownership interests
in the TARGETS are to be accomplished by entries made on the books of
Participants and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in TARGETS, except in the event that use of the book-entry system for
the TARGETS is discontinued.
To facilitate subsequent transfers, all the TARGETS deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of TARGETS with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership, and DTC has no knowledge of the actual
Beneficial Owners of the TARGETS. DTC's records reflect only the identity of the
Direct Participants to whose accounts such TARGETS are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Although voting with respect to the TARGETS is limited, in those cases
where a vote is required, neither DTC nor Cede & Co. will itself consent or vote
with respect to TARGETS. Under its usual procedures, DTC would mail an Omnibus
Proxy to the Trust as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co. consenting or voting rights for those Direct Participants to
whose accounts the TARGETS are credited on the record date (identified in a
listing attached to the Omnibus Proxy). Salomon Smith Barney and the Trust
believe that the arrangements among DTC, Direct and Indirect Participants, and
Beneficial Owners will enable the Beneficial Owners to exercise rights
equivalent in substance to the rights that can be directly exercised by a holder
of a beneficial interest in the Trust.
Payments on the TARGETS will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name," and such payments will
be the responsibility of such Participant and not of DTC, the Trust or Salomon
Smith Barney, subject to any statutory or regulatory requirements to the
contrary that may be in effect from time to time. Payment of distributions to
DTC is the responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided in the next paragraph, a Beneficial Owner in a global
TARGETS will not be entitled to receive physical delivery of TARGETS.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the TARGETS.
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DTC may discontinue providing its services as securities depositary with
respect to the TARGETS at any time by giving reasonable notice to the Trust.
Under such circumstances, in the event that a successor securities depositary is
not obtained, TARGETS certificates are required to be printed and delivered.
Additionally, the Regular Trustees (with the consent of Salomon Smith Barney)
may decide to discontinue use of the system of book-entry transfers through DTC
(or any successor depositary) with respect to the TARGETS. In that event,
certificates for the TARGETS will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Salomon Smith Barney and the Trust believe
to be reliable, but neither Salomon Smith Barney nor the Trust takes
responsibility for the accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with
respect to the Trust Securities, and after the curing of all defaults that may
have occurred, undertakes to perform only such duties as are specifically set
forth in the Declaration and, after such a default of which the Institutional
Trustee has actual knowledge, shall exercise such of the rights and powers
vested in it by the Declaration, and use the same degree of care and skill in
the exercise of such rights and powers as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the
Institutional Trustee is under no obligation to exercise any of the rights or
powers vested in it by the Declaration at the request of any holder of TARGETS,
unless offered reasonable security and indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. Notwithstanding
the foregoing, the holders of TARGETS will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Institutional Trustee to take any action following an Acceleration Event.
PAYING AGENT
In the event that the TARGETS do not remain in book-entry only form, the
Institutional Trustee will act as paying agent for the TARGETS and may designate
an additional or substitute paying agent at any time. In addition, registration
of transfers of TARGETS will be effected without charge by or on behalf of the
Trust, but upon payment (with the giving of such indemnity as the Trust or
Salomon Smith Barney may require) in respect of any tax or other government
charges which may be imposed in relation to it.
GOVERNING LAW
The Declaration and the TARGETS will be governed by, and construed in
accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or be characterized as other than a grantor trust
for United States federal income tax purposes. In this connection, Salomon Smith
Barney and the Regular Trustees are authorized to take any action, not
inconsistent with applicable law, the Declaration or the amended and restated
certificate of incorporation of Salomon Smith Barney, that each of Salomon Smith
Barney and the Regular Trustees in their discretion to be necessary or desirable
to achieve such end as long as such action does not adversely affect the
interests of the holders of the TARGETS or vary the terms thereof.
Holders of the TARGETS have no preemptive rights.
DESCRIPTION OF THE FORWARD CONTRACT
Salomon Smith Barney Holdings Inc. is also by this Prospectus offering its
related Forward Contract. The terms of the Forward Contract will be set forth in
an Indenture (the "Indenture") between Salomon Smith Barney and The Chase
Manhattan Bank (in such capacity, the "Indenture Trustee"). The Indenture will
be qualified under the Trust Indenture Act. The Indenture Trustee, The Chase
Manhattan Bank, will act as trustee for the Forward Contract under the Indenture
for purposes of compliance with the provisions of the Trust Indenture Act. The
terms
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of the Forward Contract will include those stated in the Indenture and those
made part of the Indenture by the Trust Indenture Act.
Subject to certain anti-dilution adjustments, the Forward Contract relates
to an aggregate of shares of Common Stock. Pursuant to the terms of the
Forward Contract, Salomon Smith Barney will pay an amount equal to the aggregate
Maturity Payments or the aggregate Accelerated Maturity Payments, as the case
may be, to the Trust at maturity of the Forward Contract as described above. The
Forward Contract provides, among other things, for a payment by the Company to
the Trust of an amount determined by reference to the Current Market Price as of
the Maturity Date or Accelerated Maturity Date, as the case may be. See
"Description of the TARGETS".
Pursuant to the terms of the Forward Contract, Salomon Smith Barney will,
in appropriate cases, pay additional return on the amount paid by the Trust to
Salomon Smith Barney for the Forward Contract in the form of quarterly cash
payments ("Yield Enhancement Payments") in the amount of approximately $ ,
accruing from the date of issuance of the TARGETS, computed on the basis of a
360-day year of twelve 30-day months and, for any period less than a full
calendar month, the number of days elapsed in such month. Depending on market
conditions at the time of pricing of the TARGETS for initial sale to the public,
the amount of the Yield Enhancement Payments may be zero or a nominal amount.
The Yield Enhancement Payments, together with distributions received by the
Trust with respect to the Treasury Securities, will be used by the Trust to pay
the Quarterly Distributions to the holders of the TARGETS. See "Description of
TARGETS -- Quarterly Distributions".
The Forward Contract is a contract in the form of an Indenture between the
Company and a trustee for the benefit of the holder of the interests in the
Forward Contract. The Forward Contract is a prepaid "cash-settled" forward
contract, whereby the obligor settles its obligation in cash rather than in
securities. The Indenture will provide that Salomon Smith Barney will pay all
fees and expenses related to (i) the offering of the Trust Securities and the
Forward Contract, (ii) the organization, maintenance and dissolution of the
Trust, (iii) the retention of the Trustees and (iv) the enforcement by the
Institutional Trustee of the rights of the holders of the TARGETS.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by Salomon Smith Barney for the benefit of the
holders of TARGETS. The Guarantee will be qualified as an indenture under the
Trust Indenture Act. The Chase Manhattan Bank will act as indenture trustee
under the Guarantee (in such capacity, the "Guarantee Trustee"). The terms of
the Guarantee will be those set forth in the Guarantee and those made part of
the Guarantee by the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. The Guarantee will be held by the Guarantee Trustee for
the benefit of the holders of the TARGETS.
GENERAL
Pursuant to and to the extent set forth in the Guarantee, Salomon Smith
Barney will irrevocably and unconditionally agree to pay in full to the holders
of the TARGETS (except to the extent paid by the Trust), as and when due,
regardless of any defense, right of set off or counterclaim which the Trust may
have or assert, the following payments (the "Guarantee Payments"), without
duplication: (i) any Maturity Payment that is required to be made in respect of
the TARGETS, to the extent the Trust has funds available therefor, (ii) any
Accelerated Maturity Payment that is required to be made in respect of the
TARGETS, to the extent the Trust has funds available therefor, (iii) any
Treasury Proceeds that are required to be distributed in respect of the TARGETS,
to the extent that the Trust has funds available therefor, (iv) any Quarterly
Distributions that are required to be made in respect of the TARGETS, to the
extent the Trust has funds available therefor, (v) any accrued and unpaid Yield
Enhancement Payments as of the Maturity Date or Accelerated Maturity, as the
case may be, to the extent the Trust has funds available therefor, and (vi) any
other remaining assets of the Trust upon liquidation of the Trust. Salomon Smith
Barney's obligation to make a Guarantee Payment may be satisfied by direct
payment of the
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required amounts by Salomon Smith Barney to the holders of TARGETS or by causing
the Trust to pay such amounts to such holders.
The Guarantee will be a guarantee with respect to the TARGETS from the time
of issuance of the TARGETS but will not apply to any payment of Quarterly
Distributions, Maturity Payments, Accelerated Maturity Payments, Treasury
Proceeds, accrued and unpaid Yield Enhancement Payments at maturity or to
payments upon the dissolution, winding-up or termination of the Trust, except to
the extent the Trust shall have funds available therefor. If Salomon Smith
Barney does not pay the aggregate Maturity Payments or the aggregate Accelerated
Maturity Payments to the Trust upon maturity of the Forward Contract, including
maturity as a result of acceleration or otherwise, the Trust will not pay any
Maturity Payment or Accelerated Maturity Payment to holders of the TARGETS and
will not have funds available therefor. If either the U.S. federal government,
as the issuer of the Treasury Securities, does not make periodic payments to the
Trust with respect to the Treasury Securities or Salomon Smith Barney does not
pay the Yield Enhancement Payments to the Trust with respect to the Forward
Contract then, in either event, the Trust will not pay the full amount of the
Quarterly Distributions to holders of the TARGETS and will not have funds
available therefor. See "Description of the TARGETS" and "Description of the
Forward Contract". The Guarantee, when taken together with Salomon Smith
Barney's obligations under the Forward Contract, the Indenture and the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to Trust Securities), will
provide a full and unconditional guarantee by Salomon Smith Barney of the
Trust's obligations under the TARGETS.
MODIFICATIONS OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of TARGETS (in which case no vote will be required), the Guarantee
may be amended only with the prior approval of the holders of a majority of the
outstanding TARGETS. All guarantees and agreements contained in the Guarantee
shall bind the successors, assignees, receivers, trustees and representatives of
Salomon Smith Barney and shall inure to the benefit of the holders of the
TARGETS then outstanding.
GUARANTEE ENFORCEMENT EVENTS
An enforcement event under the Guarantee will occur upon the failure of
Salomon Smith Barney to perform any of its payment or other obligations
thereunder. The holders of a majority of the TARGETS have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of the Guarantee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee Trustee's rights under
the Guarantee any holder of TARGETS may directly institute a legal proceeding
against Salomon Smith Barney to enforce the Guarantee Trustee's rights under the
Guarantee, without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. A holder of TARGETS may also
directly institute a legal proceeding against Salomon Smith Barney to enforce
such holder's right to receive payment under the Guarantee without first (i)
directing the Guarantee Trustee to enforce the terms of the Guarantee or (ii)
instituting a legal proceeding against the Trust or any other person or entity.
Salomon Smith Barney will be required to provide annually to the Guarantee
Trustee a statement as to the performance by Salomon Smith Barney of certain of
its obligations under the Guarantee and as to any default in such performance.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee and after the curing of all defaults that may have occurred,
undertakes to perform only such duties as are specifically set forth in the
Guarantee and, after any default with respect to the Guarantee (that has not
been cured or waived) of which the Guarantee Trustee has actual knowledge, shall
exercise its rights and powers under the Guarantee, and use the same degree of
care and skill in the exercise of such rights and powers as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provision, the Guarantee Trustee is under no obligation to exercise
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<PAGE> 34
any of the powers vested in it by the Guarantee at the request of any holder of
TARGETS unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to the TARGETS upon full payment to the
holders of the TARGETS of (i) the Maturity Payments and any accrued and unpaid
Yield Enhancement Payments, (ii) the Accelerated Maturity Payments, the Treasury
Proceeds and any accrued and unpaid Yield Enhancement Payments or (iii) the
amounts payable in accordance with the Declaration upon liquidation of the
Trust. The Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of TARGETS must restore payment of any
sum paid under such TARGETS or such Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
DESCRIPTION OF THE TREASURY SECURITIES
The Treasury Securities will consist of a portfolio of stripped
self-amortizing securities issued by the U.S. Treasury and maturing on a
quarterly basis through the Maturity Date. The Treasury Securities will bear
quarterly payments corresponding to the payment dates of the Quarterly
Distributions payable on the TARGETS. Upon acceleration of maturity to an
Accelerated Maturity Date, any Treasury Securities then held by the
Institutional Trustee on behalf of the Trust will be sold and the Treasury
Proceeds will be distributed to holders of the Trust Securities. See
"Description of the TARGETS -- Acceleration of Maturity".
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain U.S. federal income tax consequences
of the purchase, ownership and disposition of TARGETS. Unless otherwise
specifically indicated herein, this summary only addresses a holder of TARGETS
that is an individual who is a citizen or resident of the United States, a U.S.
domestic corporation, or any other person that is subject to U.S. federal income
taxation on a net income basis in respect of its investment in TARGETS (a "U.S.
Holder"). The discussion below is based on the advice of Cleary, Gottlieb, Steen
& Hamilton.
The summary is based on U.S. federal income tax laws, regulations, rulings
and decisions now in effect, all of which are subject to change, possibly on a
retroactive basis. Except to the extent discussed below in "-- Tax Consequences
to Non-U.S. Holders" and "-- Backup Withholding and Information Reporting," the
summary deals only with U.S. Holders that will hold TARGETS as capital assets
and that purchased TARGETS in the initial offering. The summary does not address
tax considerations that may be relevant to a particular holder in light of such
holder's individual circumstances or that are applicable to holders subject to
special tax rules, such as banks, tax-exempt entities, insurance companies,
dealers in securities or currencies, traders in securities electing to mark to
market, persons that will hold the TARGETS as a position in a "straddle" for tax
purposes or as part of a "synthetic security" or a "conversion transaction" or
other integrated investment comprised of TARGETS and one or more other
investments, or persons that have a functional currency other than the U.S.
dollar. It does not include any description of the tax laws of any state, local
or foreign government that may be applicable to the TARGETS or to the holders
thereof. Prospective purchasers of TARGETS should consult their tax advisors in
determining the tax consequences to them of purchasing, owning or disposing of
TARGETS, including the application to their particular situation of the U.S.
federal income tax considerations discussed below, as well as the application of
state, local, foreign income or other tax laws.
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<PAGE> 35
There are no regulations, published rulings or judicial decisions
addressing the characterization for U.S. federal income tax purposes of TARGETS
or instruments with terms substantially similar to TARGETS. Pursuant to the
Declaration, every holder of TARGETS and the Trust agree to treat TARGETS for
U.S. federal income tax purposes as a beneficial interest in a trust that holds
the Treasury Securities and the Forward Contract. In addition, pursuant to the
Forward Contract and the Declaration, every holder of TARGETS, the Trust and
Salomon Smith Barney agree to characterize for U.S. federal income tax purposes
(in the absence of an administrative determination or judicial ruling to the
contrary) (i) the Forward Contract as a cash-settled forward purchase contract
and (ii) an amount equal to the purchase price of the TARGETS less the purchase
price of the Treasury Securities as a cash deposit to be applied on the Maturity
Date or Accelerated Maturity Date in full satisfaction of the holder's payment
obligation under the Forward Contract. The Trust intends to report holders'
income to the Internal Revenue Service in accordance with this agreed treatment.
Under this agreed approach, the tax consequences of holding a TARGETS
should be as described below. Prospective investors in the TARGETS should be
aware, however, that no ruling is being requested from the Internal Revenue
Service with respect to the TARGETS and the Internal Revenue Service might take
a different view as to the proper characterization of the TARGETS or of the
Forward Contract and of the U.S. federal income tax consequences to a holder
thereof.
TAX STATUS OF THE TRUST
The Trust will be treated as a grantor trust owned solely by the present
and future holders of Trust Securities for U.S. federal income tax purposes, and
accordingly, income received by the Trust will be treated as income of the
holders of the TARGETS in the manner set forth below.
TAX CONSEQUENCES TO U.S. HOLDERS
Tax Basis in the Treasury Securities and the Forward Contract. Each U.S.
Holder should be considered the owner of its pro rata portion of the Treasury
Securities and the Forward Contract in the Trust. The cost to the U.S. Holder of
its TARGETS should be allocated among the holder's pro rata portion of the
Treasury Securities and the Forward Contract (in proportion to the fair market
values thereof on the date on which the holder acquires its TARGETS) in order to
determine the holder's tax basis in such assets. It is currently anticipated
that approximately % to % and % to % of the net proceeds of
the offering will be used by the Trust to purchase the Treasury Securities and
the Forward Contract, respectively.
Recognition of Original Issue Discount on the Treasury Securities. The
Treasury Securities in the Trust will consist of stripped, self-amortizing U.S.
Treasury securities. A U.S. Holder should be required to treat its pro rata
portion of each Treasury Security in the Trust as a bond that was originally
issued on the date the holder purchased its TARGETS and at an original issue
discount equal to the excess of the holder's pro rata portion of the amounts
payable on such Treasury Security over the holder's tax basis therein, as
discussed above. The amount of such excess, however, should constitute only a
portion of the total amounts payable with respect to the Treasury Securities
held by the Trust and, accordingly, a substantial portion of the quarterly cash
distributions from the Trust to holders should be treated as a tax-free return
of the holder's investment in the Treasury Securities and should reduce the
holder's tax basis in its pro rata portion of the Treasury Securities. A U.S.
Holder (whether using the cash or accrual method of tax accounting) should be
required to include original issue discount (other than original issue discount
on short-term Treasury Securities as described below) in gross income for U.S.
federal income tax purposes as it accrues, in accordance with a constant yield
method, prior to the receipt of cash attributable to such income. A U.S.
Holder's tax basis in a Treasury Security held by the Trust should be increased
by the amount of any original issue discount included in gross income by the
holder with respect to such Treasury Security and reduced to the extent that any
payment received on maturity, sale or other disposition of the TARGETS
represents a repayment of accrued original issue discount.
With respect to any short-term Treasury Security (i.e., any Treasury
Security with a maturity of one year or less from the date it is purchased) held
by the Trust, U.S. Holders using the cash method of tax accounting should
generally be required to include interest payments on such Treasury Securities
in gross income as such payments are
33
<PAGE> 36
received. In addition, such cash method U.S. Holders may be denied a deduction
for any related interest expense until such payments are received. U.S. Holders
using the accrual method of tax accounting should be required to include
original issue discount on any short-term Treasury Security held by the Trust in
gross income as such original issue discount accrues. Unless a U.S. Holder
elects to accrue the original issue discount on a short-term Treasury Security
according to a constant yield method based on daily compounding, such original
issue discount should be accrued on a straight-line basis.
Treatment of the Forward Contract. Each U.S. Holder should be treated as
having entered into a pro rata portion of the Forward Contract and, at the
Maturity Date or Accelerated Maturity Date, as having received a pro rata
portion of the Maturity Payment or Accelerated Maturity Payment, as the case may
be, received by the Trust. A U.S. Holder should not recognize income, gain or
loss upon entry into the Forward Contract and should not be required to include
in gross income additional amounts over the term of the Forward Contract (except
with respect to the Yield Enhancement Payments, as described below). See,
however, "-- Possible Alternative Characterizations" below.
Treatment of the Yield Enhancement Payments. Consistent with the agreed
characterization, any Yield Enhancement Payments (including amounts payable with
respect to any deferred Yield Enhancement Payments) should be characterized as
interest payable on the amount of cash paid by the Trust which is allocable to
the Forward Contract and should generally be includible in the income of a U.S.
Holder on an accrual basis.
Sale or Other Disposition of the TARGETS. Upon a sale or other disposition
of all or some of a U.S. Holder's TARGETS, such holder should be treated as
having sold its pro rata portions of the Treasury Securities and the Forward
Contract underlying the TARGETS. The selling U.S. Holder should recognize
capital gain or loss equal to the difference between the amount realized from
such sale or other disposition and the holder's aggregate tax bases in its pro
rata portions of the Treasury Securities and the Forward Contract (except to the
extent of any (i) accrued interest with respect to the holder's pro rata portion
of the Treasury Securities includible in gross income as ordinary income and
(ii) possibly any accrued but unpaid Yield Enhancement Payments, as described
above). Any such gain or loss will be long-term capital gain or loss if the U.S.
Holder's holding period for the TARGETS is more than one year. The distinction
between capital gain or loss and ordinary income or loss is important for
purposes of the limitations on a holder's ability to offset capital losses
against ordinary income. In addition, long-term capital gains recognized by an
individual U.S. Holder generally are subject to a maximum rate of 20 percent.
Distributions Of Cash at the Maturity Date or Accelerated Maturity
Date. On the receipt of cash by the Trust with respect to the Forward Contract
on the Maturity Date or Accelerated Maturity Date, a U.S. Holder should realize
capital gain or loss equal to the difference between the holder's pro rata
portion of the amount of cash received by the Trust and the holder's tax basis
in its pro rata portion of the Forward Contract at that time (except to the
extent such cash is attributable to Yield Enhancement Payments, as described
above). Under certain circumstances, on or following the Accelerated Maturity
Date, the Trust may sell all or a portion of the Treasury Securities and
distribute the Treasury Proceeds to holders. Upon such a sale by the Trust, a
U.S. Holder should realize capital gain or loss equal to the difference between
the amount of cash received by the holder (except to the extent of any accrued
interest with respect to the holder's pro rata portion of the Treasury
Securities or accrued but unpaid Yield Enhancement Payments includible in gross
income as ordinary income) and the holder's tax basis in its pro rata portion of
the Treasury Securities sold by the Trust. Any such capital gain or loss
described in this paragraph will be long-term capital gain or loss if the U.S.
Holder's holding period for the TARGETS is more than one year and will be
subject to the same maximum U.S. federal income tax rates for individuals
discussed above under "-- Sale or Other Disposition of the TARGETS".
Possible Alternative Characterizations. The Internal Revenue Service may
contend that TARGETS should be characterized for U.S. federal income tax
purposes in a manner different than the approach described above. For example,
the Internal Revenue Service might assert that the Forward Contract should be
treated as a contingent debt obligation of Salomon Smith Barney that is subject
to Treasury regulations governing contingent payment debt instruments. If the
Internal Revenue Service were to prevail in making such an assertion, original
issue discount would accrue with respect to the Forward Contract at a
"comparable yield" for Salomon Smith Barney under the Forward Contract,
determined at the time the Forward Contract is entered into. A U.S. Holder's pro
rata portion of
34
<PAGE> 37
original issue discount with respect to the Forward Contract and the Treasury
Securities might exceed the aggregate amount of the Quarterly Distributions
received by the holder. In addition, under this treatment, a U.S. Holder would
be required to treat any gain realized on the sale or other disposition of the
TARGETS as ordinary income to the extent that such gain is allocable to the
holder's pro rata portion of the Forward Contract. Any loss realized on such
sale or other disposition that is allocable to the U.S. Holder's pro rata
portion of the Forward Contract would be treated as an ordinary loss to the
extent of the holder's original issue discount inclusions with respect to the
Forward Contract and as capital loss to the extent of loss in excess of such
inclusions. It is also possible that the Internal Revenue Service could take the
view that a U.S. Holder should include in gross income the amount of cash
actually received each year in respect of the TARGETS or that the TARGETS as a
whole constitute a contingent payment debt instrument subject to the rules
described above.
Proposed Legislation on Constructive Ownership. A bill introduced in 1998
by a member of the House of Representatives (H.R. 3170) would have treated some
or all of the net long-term capital gain arising from "constructive ownership"
transactions involving certain derivative financial instruments as short-term
capital gain, and would have imposed an interest charge on such short-term
capital gain. The proposed legislation would have been effective with respect to
gain recognized after the date the legislation was enacted into law, without
regard to when the constructive ownership transaction was entered into. In its
proposed form, the legislation would not have applied to the TARGETS transaction
(and, even if the legislation in its proposed form were extended to cover the
TARGETS transaction, would have had no material effect on the TARGETS
transaction). It is not possible to predict whether legislation addressing
constructive ownership transactions will be enacted, or what form any such
legislation might take (including with respect to effective dates).
TAX CONSEQUENCES TO NON-U.S. HOLDERS
In the case of a holder of TARGETS that is a non-resident alien individual
or foreign corporation (a "Non-U.S. Holder"): (a) Quarterly Distributions made
with respect to the TARGETS should not be subject to U.S. withholding tax,
provided that such holder complies with applicable certification requirements
(including in general the furnishing of an Internal Revenue Service Form W-8 or
a substitute form); and (b) any capital gain realized upon the sale or other
disposition of the TARGETS should not be subject to U.S. federal income tax
unless (i) such gain is effectively connected with a U.S. trade or business of
such holder or (ii) in the case of an individual, such individual is present in
the United States for 183 days or more in the taxable year of the sale or other
disposition or the gain is not attributable to a fixed place of business
maintained by such individual in the United States.
Recently issued Treasury regulations may change the certification
procedures relating to withholding on certain amounts paid to Non-U.S. Holders
after December 31, 1999. Prospective investors should consult their tax advisors
regarding the effect, if any, of such new Treasury regulations on an investment
in the TARGETS.
A Non-U.S. Holder that is subject to U.S. federal income taxation on a net
income basis with respect to its investment in the TARGETS should see the
discussion in "-- Tax Consequences to U.S. Holders."
BACKUP WITHHOLDING AND INFORMATION REPORTING
A holder of TARGETS (including a Non-U.S. Holder) may be subject to
information reporting and to backup withholding tax at a rate of 31 percent of
certain amounts paid to the holder unless such holder (a) is a corporation or
comes within certain other exempt categories and, when required, provides proof
of such exemption or (b) provides a correct taxpayer identification number,
certifies as to no loss of exemption from backup withholding tax and otherwise
complies with applicable requirements of the backup withholding rules. Backup
withholding is not an additional tax and any amounts withheld may be credited
against the holder's U.S. federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service.
35
<PAGE> 38
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended, imposes
certain requirements on "employee benefit plans" (as defined in Section 3(3) of
ERISA) subject to ERISA, including entities such as collective investment funds
and separate accounts whose underlying assets include the assets of such plans
(collectively, "ERISA Plans") and on those persons who are fiduciaries with
respect to ERISA Plans. Section 406 of ERISA and Section 4975 of the Code
prohibit certain transactions involving the assets of an ERISA Plan or a plan
(such as a Keogh plan or an individual retirement account) that are not subject
to ERISA but which are subject to Section 4975 of the Code (together with ERISA
Plans, "Plans") and certain persons (referred to as "parties in interest" under
ERISA or "disqualified persons" under the Code) having certain relationships to
such Plans, unless a statutory or administrative exception or exemption is
applicable to the transaction.
The U.S. Department of Labor has promulgated a regulation, 29 C.F.R.
Section 2510.3-101 (the "Plan Asset Regulation"), describing what constitutes
the assets of a Plan with respect to the Plan's investment in an entity for
purposes of certain provisions of ERISA, including the fiduciary responsibility
provisions of Title I of ERISA and Section 4975 of the Code. Under the Plan
Asset Regulation, if a Plan invests in a beneficial interest in a trust or a
profits interest in a partnership, the Plan's assets include both the equity
interest and an undivided interest in each of the entity's underlying assets,
unless the interest is a "publicly-offered security" or certain other conditions
are satisfied. It is anticipated that the TARGETS should constitute
"publicly-offered securities" within the meaning of the Plan Asset Regulation,
and that, consequently, transactions engaged in by the Trust, including the
Forward Contract, should not be subject to the provisions of ERISA or Section
4975 of the Code.
Any Plan fiduciary which proposes to cause a Plan to purchase the TARGETS
should consult with its counsel regarding the applicability of the fiduciary
responsibility and prohibited transaction provisions of ERISA and Section 4975
of the Code to such an investment, and to confirm that such investment will not
constitute or result in a prohibited transaction or any other violation of an
applicable requirement of ERISA or the Code for which an exemption is not
available. Governmental plans and certain church plans not subject to the
fiduciary responsibility provisions of ERISA or the provisions of Section 4975
of the Code but subject to state or other federal laws that are substantially
similar to the foregoing provisions of ERISA and the Code should also consult
with their counsel before purchasing any TARGETS.
36
<PAGE> 39
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement
dated (the "Underwriting Agreement"), each underwriter named below
(the "Underwriters") has severally agreed to purchase from the Trust, and the
Trust has agreed to sell to such Underwriters, the number of TARGETS set forth
opposite the name of such Underwriters.
<TABLE>
<CAPTION>
NUMBER OF
NAME TARGETS
---- ---------
<S> <C>
Salomon Smith Barney Inc. .................................. $
--------
Total............................................. $
========
</TABLE>
The Underwriting Agreement provides that the obligation of the several
Underwriters to purchase the TARGETS included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to purchase all of the TARGETS (other than those
covered by the over-allotment option described below) if they purchase any
TARGETS. In the event of default by any Underwriter, the Underwriting Agreement
provides that, in certain circumstances, purchase commitments of the
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.
The Underwriters propose to offer some of the TARGETS directly to the
public at the public offering price set forth on the cover page of this
Prospectus and some of the TARGETS to certain dealers at the public offering
price less a concession not in excess of $ per TARGETS. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
TARGETS on sales to certain other brokers and dealers. After the initial
offering of the TARGETS to the public, the public offering price and such
concessions may be changed by the Underwriters.
The Trust has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to additional
TARGETS at the public offering price less the underwriting discount. Salomon
Smith Barney will pay the underwriting discount in the amount per TARGETS set
forth on the cover page hereof with respect to such additional TARGETS. The
Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, in connection with this offering. To the extent such
option is exercised, each Underwriter will be obligated, subject to certain
conditions, to purchase a number of additional TARGETS approximately
proportionate to such Underwriter's initial purchase commitment.
The Trust and Salomon Smith Barney have agreed that, for the period
beginning on the date of the Underwriting Agreement and continuing to and
including the closing date for the purchase of the TARGETS, they will not offer,
sell, contract to sell, or otherwise dispose of, any securities (including any
backup undertakings of such securities) of Salomon Smith Barney 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 Salomon Smith Barney.
The Underwriting Agreement provides that the Trust and Salomon Smith Barney
will indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and will make certain
contributions in respect thereof, or will contribute to payments that the
Underwriters may be required to make in respect of any of those liabilities and
will reimburse each of the Underwriters for certain legal and other expenses.
Prior to this offering, there has been no public market for the TARGETS.
Consequently, the initial public offering price for the TARGETS was determined
by negotiations among the Company, the Trust and the Underwriters. There can be
no assurance, however, that the prices at which the TARGETS will sell in the
public market after this offering will not be lower than the price at which they
are sold by the Underwriters or that an active trading market in the TARGETS
will develop and continue after this offering.
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<PAGE> 40
Salomon Smith Barney and the Trust have applied to list the TARGETS on the
Exchange under the symbol " ".
In view of the fact that the proceeds of the sale of the TARGETS will
ultimately be used by the Trust to purchase the Forward Contract, the
Underwriting Agreement provides that Salomon Smith Barney will pay as
compensation to the Underwriters $ per TARGETS for the accounts of the
several Underwriters.
In connection with the offering, Salomon Smith Barney Inc., on behalf of
the Underwriters, may over-allot, or engage in syndicate covering transactions,
stabilizing transactions and penalty bids. Over-allotment involves syndicate
sales of TARGETS in excess of the number of shares to be purchased by the
Underwriters in the offering, which creates a syndicate short position.
Syndicate covering transactions involve purchases of the TARGETS in the open
market after the distribution has been completed in order to cover syndicate
short positions. Stabilizing transactions consist of certain bids or purchases
of TARGETS made for the purpose of preventing or retarding a decline in the
market price of the TARGETS while the offering is in progress. Penalty bids
permit the underwriters to reclaim a selling concession from a syndicate member
when Salomon Smith Barney Inc., in covering syndicate short positions or making
stabilizing purchases, repurchases shares originally sold by that syndicate
member. These activities may cause the price of the TARGETS to be higher than
the price that otherwise would exist in the open market in the absence of such
transactions. These transactions may be effected on the or in the over-the-
counter market or otherwise and, if commenced, may be discontinued at any time.
The participation of any affiliate of Salomon Smith Barney in the offer and
sale of TARGETS will comply with the requirements of Rule 2720 of the Conduct
Rules of the National Association of Securities Dealers, Inc. regarding the
underwriting by an affiliate of securities of its parent. The offer and sale of
the TARGETS will comply with the requirements of Rule 2810 of the Conduct Rules
of the National Association of Securities Dealers, Inc. regarding direct
participation programs.
This Prospectus may be used by Salomon Smith Barney or any Underwriter that
is an affiliate or other affiliates of Salomon Smith Barney in connection with
offers and sales of the TARGETS (subject to obtaining any necessary approval of
the Exchange for any such offers and sales) in market-making transactions
at negotiated prices related to prevailing market prices at the time of sale.
Any such entity may act as principal or agent in such transactions. No such
entity is obligated to make a market in the TARGETS and any such entity may
discontinue any market-making at any time without notice, at its sole
discretion. There can be no assurance of the liquidity or existence of a
secondary market for any TARGETS.
LEGAL MATTERS
The validity of the TARGETS, the Forward Contract, the Guarantee and
certain matters relating thereto and certain United States federal income tax
matters will be passed upon for Salomon Smith Barney and the Trust by Joan
Guggenheimer, Esq. Ms. Guggenheimer, General Counsel of Salomon Smith Barney,
beneficially owns or has rights to acquire under Citigroup employee benefit
plans, an aggregate of less than one percent of the common stock of Citigroup.
Certain legal matters will be passed upon for the Underwriters by Cleary,
Gottlieb, Steen and Hamilton, New York, New York. Cleary, Gottlieb, Steen &
Hamilton has also acted as special tax counsel to Salomon Smith Barney in
connection with the TARGETS. Cleary, Gottlieb, Steen and Hamilton has from time
to time acted as counsel for Salomon Smith Barney and certain of its affiliates
and may do so in the future.
EXPERTS
The consolidated financial statements of Salomon Smith Barney and its
subsidiaries for the fiscal years ended December 31, 1997 and 1996 and for each
of the three years in the period ended December 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent certified public accountants, as set
forth in their report thereon, included therein and incorporated herein by
reference, which report states that PricewaterhouseCoopers LLP did not audit the
consolidated financial statements of Salomon Inc as of December 31, 1996 and
1995, and for each of the years in the three-year period ended December 31, 1996
(the "Salomon Financials"), and that their opinion with respect to any amounts
contained in the Salomon Financials is based on the report of Arthur Andersen
LLP. Such financial statements are incorporated by reference herein in reliance
upon such report given upon the authority of said firm as experts in accounting
and auditing.
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<PAGE> 41
APPENDIX A
INDEX OF TERMS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Accelerated Maturity Date................ 4
Accelerated Maturity Payment............. 4, 18
Acceleration Event....................... 5, 18
Appreciation Cap......................... 2
Bankruptcy Event......................... 19
Beneficial Owner......................... 28
Business Day............................. 26
Calculation Period....................... 24
Citigroup................................ 6
Closing Date............................. 22
Closing Price............................ 24
Code..................................... 6
Common Securities........................ 2
Common Stock............................. 2
Current Market Price..................... 3, 17
Declaration.............................. 16
Delaware Trustee......................... 16
Direct Participants...................... 28
DTC...................................... 3
ERISA.................................... 6
ERISA Plans.............................. 36
Excess Purchase Payment.................. 23
Exchange................................. 6
Exchange Act............................. 7
Exchange Rate............................ 3
Forward Contract......................... 2
Guarantee................................ 5
Guarantee Payment........................ 30
Guarantee Trustee........................ 16, 30
Indenture................................ 29
Indenture Trustee........................ 29
Indirect Participant..................... 28
Institutional Trustee.................... 16
Investment Company Event................. 19
Marketable Securities.................... 25
Maturity Date............................ 2
Maturity Payment......................... 3, 17
</TABLE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
NASD..................................... 28
1940 Act................................. 19
Non-U.S. Holder.......................... 35
Participants............................. 28
Permitted Dividend....................... 23
Plans.................................... 36
Plan Asset Regulation.................... 36
Property Account......................... 16
Pro rata................................. 19
Quarterly Distributions.................. 21
Regular Trustees......................... 18
Reorganization Event..................... 24
Salomon Financials....................... 38
Salomon Smith Barney..................... 2, 12
SEC...................................... 7
Sponsor.................................. 16
Successor Securities..................... 27
Super Majority........................... 20
TARGETS.................................. 2
Tax Action............................... 19
Tax Event................................ 18
Then-Current Market Price................ 24
Trading Day.............................. 24
Transaction Value........................ 25
Travelers Group.......................... 6
Treasury Proceeds........................ 18
Treasury Securities...................... 2
Trust.................................... 2
Trust Act................................ 16
Trust Dissolution Tax Opinion............ 18
Trustee.................................. 16
Trust Indenture Act...................... 16
Trust Securities......................... 13
Underwriters............................. 37
Underwriting Agreement................... 37
U.S. Holder.............................. 32
Yield Enhancement Payment................ 30
</TABLE>
A-1
<PAGE> 42
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information contained or incorporated by reference in this prospectus is
accurate as of any date other than the date on the cover of this prospectus.
TABLE OF CONTENTS
Page
Summary Information -- Q&A 2
Risk Factors 8
Salomon Smith Barney 12
Use of Proceeds and Hedging Activities 13
Capitalization 14
Issuer of the Common Stock 14
Historical Data on the Common Stock 15
TARGETS Trust [II] 16
Description of the TARGETS 17
Description of the Forward Contract 29
Description of the Guarantee 30
Description of the Treasury Securities 32
Certain Federal Income Tax Considerations 32
ERISA Considerations 36
Underwriting 37
Legal Matters 38
Experts 38
Index of Terms A-1
TARGETS TRUST [II]
TARGETED GROWTH
ENHANCED TERMS SECURITIES
(TARGETS(R))
WITH RESPECT TO
THE COMMON STOCK OF
DUE ON
GUARANTEED TO THE
EXTENT EXPLAINED IN
THIS PROSPECTUS BY
SALOMON SMITH BARNEY
HOLDINGS INC.
PROSPECTUS
,1999
SALOMON SMITH BARNEY
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Commission Registration Fee................................. $ 69,500
Accounting Fees............................................. 32,500
Trustees' Fees and Expenses................................. 48,000
Blue Sky Fees and Expenses.................................. 5,000
Printing and Engraving Fees................................. 100,000
NASD Fee.................................................... 30,500
Legal Fees and Expenses..................................... 300,000
Miscellaneous............................................... 4,500
--------
Total............................................. $590,000
</TABLE>
- ---------------
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware (the "DGCL") empowers a corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
of Section 145, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized and ratified, continue as
to such person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of such person's heirs, executors and administrators;
and empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out
II-1
<PAGE> 44
of his status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
Section 102(b) (7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Eight of Salomon Smith Barney's By-Laws provides for indemnification of
directors and officers of Salomon Smith Barney against certain liabilities
incurred as a result of their duties as such and Article Fifth of Salomon Smith
Barney's Amended and Restated Certificate of Incorporation provides that no
directors of Salomon Smith Barney shall be liable for monetary damages for
breach of fiduciary duty as a director.
The Declaration of Trust of each Trust provides that no Institutional
Trustee or any of its affiliates, Delaware Trustee or any of its affiliates, or
officer, director, shareholder, member, partner, employee, representative,
custodian, nominee or agent of the Institutional Trustee or the Delaware Trustee
(each a "Fiduciary Indemnified Person"), and no Regular Trustee, affiliate of
any Regular Trustee, or any officer, director, shareholder, member, partner,
employee, representative or agent of any Regular Trustee, or any employee or
agent of the Trust or its affiliates (each a "Company Indemnified Person") shall
be liable, responsible or accountable in damages or otherwise to the Trust, any
Affiliate of the Trust or any holder of securities issued by the Trust, or to
any officer, director, shareholder, partner, member, representative, employee or
agent of the Trust or its Affiliates for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Fiduciary Indemnified
Person or Company Indemnified Person in good faith on behalf of the Trust and,
in a manner such Fiduciary Indemnified Person or Company Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Fiduciary Indemnified Person or Company Indemnified Person by such Declaration
or by law, except that a Fiduciary Indemnified Person or Company Indemnified
Person shall be liable for any loss, damage, or claim incurred by reason of such
Fiduciary Indemnified Person's or Company Indemnified Person's gross negligence
(or in the case of a Fiduciary Indemnified Person, negligence) or willful
misconduct with respect to such acts or omissions. The Declaration of the Trust
also provides that, to the full extent permitted by law, Salomon Smith Barney
shall indemnify any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in right of the Trust) by reason of the fact that he
is or was a Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
Declaration of Trust also provides that to the full extent permitted by law,
Salomon Smith Barney shall indemnify any Company Indemnified Person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper. The
Declaration of Trust further provides that expenses (including attorneys' fees)
incurred by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or pr oceeding referred to in the
immediately preceding two sentences shall be paid by Salomon Smith Barney in
advance of the final disposition of such action, suit or
II-2
<PAGE> 45
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by Salomon Smith Barney as authorized
in the Declaration. The directors and officers of Salomon Smith Barney and the
Regular Trustee are covered by insurance policies indemnifying them against
certain liabilities, including certain liabilities arising under the Securities
Act, which might be incurred by them in such capacities and against which they
cannot be indemnified by Salomon Smith Barney or the Trust. Any agents, dealers
or underwriters who execute any of the agreements filed as Exhibit 1(a) to this
Registration Statement will agree to indemnify Salomon Smith Barney's directors
and their officers and the Trustees who signed the Registration Statement
against certain liabilities that may arise under the Securities Act with respect
to information furnished to Salomon Smith Barney or the Trust by or on behalf of
such indemnifying party.
For the undertaking with respect to indemnification, see Item 17 herein.
See the Form of proposed Underwriting Agreement, filed or to be filed as
Exhibit 1, for certain indemnification provisions.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C> <C>
1 -- Form of Underwriting Agreement for the offering of the
TARGETS being registered under this Registration Statement.
3.01 -- Amended and Restated Certificate of Incorporation of Salomon
Smith Barney Holdings Inc. ("Salomon Smith Barney"),
effective December 1, 1997, incorporated by reference to
Exhibit 4(a) to Amendment No. 2 to Salomon Smith Barney's
Registration Statement on Form S-3 (No. 333-38931).
3.02 -- By-Laws of Salomon Smith Barney, incorporated by reference
to Exhibit 4(b) to Amendment No. 2 to Salomon Smith Barney's
Registration Statement on Form S-3 (No. 333-38931).
4(a) -- Certificate of Trust of TARGETS Trust II.
4(b) -- Certificate of Trust of TARGETS Trust III.
4(c) -- Certificate of Trust of TARGETS Trust IV.
4(d) -- Certificate of Trust of TARGETS Trust V.
4(e) -- Certificate of Trust of TARGETS Trust VI.
4(f) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust II.
4(g) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust III.
4(h) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust IV.
4(i) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust V.
4(j) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust VI.
4(k) -- Form of TARGETS Guarantee Agreement for TARGETS Trust II.
4(l) -- Form of TARGETS Guarantee Agreement for TARGETS Trust III.
4(m) -- Form of TARGETS Guarantee Agreement for TARGETS Trust IV.
4(n) -- Form of TARGETS Guarantee Agreement for TARGETS Trust V.
4(o) -- Form of TARGETS Guarantee Agreement for TARGETS Trust VI.
4(p) -- Form of Indenture for TARGETS Trust II.
4(q) -- Form of Indenture for TARGETS Trust III.
4(r) -- Form of Indenture for TARGETS Trust IV.
4(s) -- Form of Indenture for TARGETS Trust V.
4(t) -- Form of Indenture for TARGETS Trust VI.
4(u) -- Form of TARGETS (included in Exhibits 4(f)-(j)).
4(v) -- Form of Common Securities (included in Exhibits 4(f)-(j)).
4(w) -- Form of Forward Contract (included in Exhibits 4(p)-(t)).
5 -- Opinion of counsel as to certain corporate law matters.
8 -- Opinion of counsel as to certain federal income tax matters.
</TABLE>
II-3
<PAGE> 46
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C> <C>
12 -- Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends of Salomon Smith Barney
(incorporated by reference to Exhibit 12.01 to Salomon Smith
Barney's Annual Report on Form 10-K for the year ended
December 31, 1997 and Exhibit 12.01 to Salomon Smith
Barney's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998).
23(a) -- Consent of PricewaterhouseCoopers LLP, independent certified
public accountants.
23(b) -- Consent of Arthur Andersen LLP, independent certified public
accountants.
23(c) -- Consent of counsel (to be contained in Exhibits No. 5 and
8).
25(a) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust II.
25(b) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust III.
25(c) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust IV.
25(d) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust V.
25(e) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust VI.
25(f) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust II.
25(g) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust III.
25(h) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust IV.
25(i) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust V.
25(j) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust VI.
25(k) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust II.
25(l) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust III.
25(m) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust IV.
25(n) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust V.
25(o) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust VI.
</TABLE>
- ---------------
* A Form T-1 Statement of Eligibility and Qualification of Trustees other than
those as to which Form T-1s are filed herewith may be filed as an Exhibit to a
Current Report on Form 8-K and incorporated herein by reference.
II-4
<PAGE> 47
ITEM 17. UNDERTAKINGS.
(a) Each of Salomon Smith Barney, TARGETS Trust II, TARGETS Trust III,
TARGETS Trust IV, TARGETS Trust V and TARGETS Trust VI hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Each of Salomon Smith Barney, TARGETS Trust II, TARGETS Trust III,
TARGETS Trust IV, TARGETS Trust V and TARGETS Trust VI hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933, each
filing of Salomon Smith Barney's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of a
registrant pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by a registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against a
registrant by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(d) Each of Salomon Smith Barney, TARGETS Trust II, TARGETS Trust III,
TARGETS Trust IV, TARGETS Trust V and TARGETS Trust VI hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933 the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933 each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TARGETS Trust
II certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 3rd day of February, 1999.
TARGETS TRUST II
By: /s/ MICHAEL J. DAY
------------------------------------
Name: Michael J. Day
Title: Regular Trustee
By: /s/ CHARLES W. SCHARF
------------------------------------
Name: Charles W. Scharf
Title: Regular Trustee
II-6
<PAGE> 49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TARGETS Trust
III certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 3rd day of February, 1999.
TARGETS TRUST III
By: /s/ MICHAEL J. DAY
------------------------------------
Name: Michael J. Day
Title: Regular Trustee
By: /s/ CHARLES W. SCHARF
------------------------------------
Name: Charles W. Scharf
Title: Regular Trustee
II-7
<PAGE> 50
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TARGETS Trust
IV certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 3rd day of February, 1999.
TARGETS TRUST IV
By: /s/ MICHAEL J. DAY
------------------------------------
Name: Michael J. Day
Title: Regular Trustee
By: /s/ CHARLES W. SCHARF
------------------------------------
Name: Charles W. Scharf
Title: Regular Trustee
II-8
<PAGE> 51
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TARGETS Trust V
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 3rd day of February, 1999.
TARGETS TRUST V
By: /s/ MICHAEL J. DAY
------------------------------------
Name: Michael J. Day
Title: Regular Trustee
By: /s/ CHARLES W. SCHARF
------------------------------------
Name: Charles W. Scharf
Title: Regular Trustee
II-9
<PAGE> 52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TARGETS Trust
VI certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 3rd day of February, 1999.
TARGETS TRUST VI
By: /s/ MICHAEL J. DAY
------------------------------------
Name: Michael J. Day
Title: Regular Trustee
By: /s/ CHARLES W. SCHARF
------------------------------------
Name: Charles W. Scharf
Title: Regular Trustee
II-10
<PAGE> 53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Salomon Smith
Barney Holdings Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on form S-3 and has duly caused this
Registration Statement or Amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 3rd day of February, 1999.
SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ CHARLES W. SCHARF
------------------------------------
Name: Charles W. Scharf
Title: Senior Executive Vice
President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment thereto has been signed below by the
following persons in the capacities with Salomon Smith Barney Holdings Inc. on
the 3rd day of February, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
/s/ MICHAEL A. CARPENTER Chairman of the Board, Chief Executive
- -------------------------------------------- Officer (Principal Executive Officer) and
(Michael A. Carpenter) Director
/s/ DERYCK C. MAUGHAN Director
- --------------------------------------------
(Deryck C. Maughan)
/s/ CHARLES W. SCHARF Senior Executive Vice President and Chief
- -------------------------------------------- Financial Officer (Principal Financial
(Charles W. Scharf) Officer)
/s/ MICHAEL J. DAY Executive Vice President and Controller
- -------------------------------------------- (Principal Accounting Officer)
(Michael J. Day)
</TABLE>
II-11
<PAGE> 54
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<S> <C> <C> <C>
1 -- Form of Underwriting Agreement for the offering of the
TARGETS being registered under this Registration Statement.
3.01 -- Amended and Restated Certificate of Incorporation of Salomon
Smith Barney Holdings Inc. ("Salomon Smith Barney"),
effective December 1, 1997, incorporated by reference to
Exhibit 4(a) to Amendment No. 2 to Salomon Smith Barney's
Registration Statement on Form S-3 (No. 333-38931).
3.02 -- By-Laws of Salomon Smith Barney, incorporated by reference
to Exhibit 4(b) to Amendment No. 2 to Salomon Smith Barney's
Registration Statement on Form S-3 (No. 333-38931).
4(a) -- Certificate of Trust of TARGETS Trust II.
4(b) -- Certificate of Trust of TARGETS Trust III.
4(c) -- Certificate of Trust of TARGETS Trust IV.
4(d) -- Certificate of Trust of TARGETS Trust V.
4(e) -- Certificate of Trust of TARGETS Trust VI.
4(f) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust II.
4(g) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust III.
4(h) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust IV.
4(i) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust V.
4(j) -- Form of Amended and Restated Declaration of Trust for
TARGETS Trust VI.
4(k) -- Form of TARGETS Guarantee Agreement for TARGETS Trust II.
4(l) -- Form of TARGETS Guarantee Agreement for TARGETS Trust III.
4(m) -- Form of TARGETS Guarantee Agreement for TARGETS Trust IV.
4(n) -- Form of TARGETS Guarantee Agreement for TARGETS Trust V.
4(o) -- Form of TARGETS Guarantee Agreement for TARGETS Trust VI.
4(p) -- Form of Indenture for TARGETS Trust II.
4(q) -- Form of Indenture for TARGETS Trust III.
4(r) -- Form of Indenture for TARGETS Trust IV.
4(s) -- Form of Indenture for TARGETS Trust V.
4(t) -- Form of Indenture for TARGETS Trust VI.
4(u) -- Form of TARGETS (included in Exhibits 4(f)-(j)).
4(v) -- Form of Common Securities (included in Exhibits 4(f)-(j)).
4(w) -- Form of Forward Contract (included in Exhibits 4(p)-(t)).
5 -- Opinion of counsel as to certain corporate law matters.
8 -- Opinion of counsel as to certain federal income tax matters.
12 -- Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends of Salomon Smith Barney
(incorporated by reference to Exhibit 12.01 to Salomon Smith
Barney's Annual Report on Form 10-K for the year ended
December 31, 1997 and Exhibit 12.01 to Salomon Smith
Barney's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998).
23(a) -- Consent of PricewaterhouseCoopers LLP, independent certified
public accountants.
23(b) -- Consent of Arthur Andersen LLP, independent certified public
accountants.
23(c) -- Consent of counsel (to be contained in Exhibits No. 5 and
8).
25(a) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust II.
</TABLE>
II-12
<PAGE> 55
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<S> <C> <C> <C>
25(b) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust III.
25(c) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust IV.
25(d) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust V.
25(e) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Declaration of Trust of TARGETS Trust VI.
25(f) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust II.
25(g) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust III.
25(h) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust IV.
25(i) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust V.
25(j) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the TARGETS Guarantee Agreement with respect to TARGETS
Trust VI.
25(k) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust II.
25(l) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust III.
25(m) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust IV.
25(n) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust V.
25(o) -- Form T-1, Statement of Eligibility Under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, under
the Indenture with respect to TARGETS Trust VI.
</TABLE>
- ---------------
* A Form T-1 Statement of Eligibility and Qualification of Trustees other than
those as to which Form T-1s are filed herewith may be filed as an Exhibit to a
Current Report on Form 8-K and incorporated herein by reference.
II-13
<PAGE> 1
EXHIBIT 1
TARGETS
TARGETS TRUST II
Targeted Growth Enhanced Terms Securities (TARGETS(Registered))
With Respect to the Common Stock of
Due on
guaranteed to the extent explained
in the Prospectus dated , 1999 by
SALOMON SMITH BARNEY HOLDINGS INC.
FORM OF UNDERWRITING AGREEMENT
, 1999
SALOMON SMITH BARNEY INC.
As Representative of the
Several Underwriters
c/o SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
TARGETS Trust II (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 of
its Targeted Growth Enhanced Terms Securities (TARGETS(Registered)) (the
"TARGETS") to [you, as underwriter] [the several underwriters named on Schedule
I hereto] (the "Underwriter[s]") [for whom you (the "Representative") are acting
as representative].
The TARGETS are to be issued pursuant to the terms of a declaration of
trust, dated as of , 1999, as amended and restated as of ,
1999 (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 , 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 , 1999 (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
<PAGE> 2
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[s].
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- ), including a
form of 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 form of prospectus may have been amended or
supplemented from time to time prior to the date of this Agreement; any such
amendment to such registration statement was so prepared and filed and any such
amendment has become effective. A final prospectus (the "Prospectus") relating
to the Securities has been so prepared and will be filed pursuant to Rule 424
under the Act. Copies of such registration statement and form of prospectus, any
such amendment or supplement, the Prospectus 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 as amended or
supplemented to the date hereof, is hereinafter referred to as the "Registration
Statement". 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
<PAGE> 3
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] [each Underwriter
and each Underwriter agrees, severally and not jointly], to purchase from the
Trust, at a purchase price of $ per TARGETS, plus accrued distributions,
if any, from , 1999, [ TARGETS] [the number of TARGETS set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
TARGETS increased as set forth in Section 8 hereof)]
(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,] [the Underwriters] as compensation ("Underwriter[s]
Compensation") for [your] [their] arranging the investment of the proceeds
therein, on the Closing Date (as hereinafter defined), $o per TARGETS.
3. Delivery and Payment. Delivery of and payment for the TARGETS shall be
made at 10:00 AM, New York City time, on , 1999, 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,] [the Representative] for [your] [the
respective] account[s] against payment by [you, as Underwriter,] [the several
Underwriters through the Representative] 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,] [the several Underwriters] 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 Underwriters]; 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
3
<PAGE> 4
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 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,] [the Underwriters] 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,] [the Underwriters]
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,] [the Underwriters] for any
expenses (including fees and disbursements of counsel) incurred by [you] [them]
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
4
<PAGE> 5
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 [Underwriters']
obligations hereunder required to be fulfilled by the Offerors is not fulfilled,
the Company will reimburse [you, as Underwriter,] [the Underwriters] for all
reasonable out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by [you, as Underwriter,] [the Underwriters] 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 Salomon Smith Barney Inc.
5. Conditions of Underwriter's Obligations. The obligations of [you, as
Underwriter,] [the several Underwriters] 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] [any]
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] [the] judgment [of a majority in interest of the
Underwriters], 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 Joan
Guggenheimer, General Counsel of the Company and 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 Cleary,
Gottlieb, Steen & Hamilton, special tax counsel to the Company and counsel to
the Offerors and the Trust, substantially in the form attached hereto as Exhibit
B.
5
<PAGE> 6
(e) You shall have received an opinion, dated the Closing Date, of
Thacher Proffitt & Wood, counsel to The Chase Manhattan Bank, substantially in
the form attached hereto as Exhibit C.
(f) You shall have received from Cleary, Gottlieb, Steen & Hamilton,
counsel for the Underwriter[s], such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the TARGETS, 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.
(g) 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
the Chairman of the Board, any Vice Chairman, any Vice President, the Treasurer
or the Deputy Treasurer 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 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.
(h) PricewaterhouseCoopers LLP 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.
6
<PAGE> 7
(i) 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
o.
(j) 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,]
[each Underwriter] against any losses, claims, damages or liabilities, joint or
several, to which [you, as Underwriter,] [such 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,] [each Underwriter] for any legal or other
expenses reasonably incurred by [you][it] in connection with investigating or
defending against such loss, claim, damage, liability or action; provided,
however, that the Offerors shall not 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,] [any
Underwriter] specifically for use in the preparation thereof.
(b) [You, as Underwriter,] [Each 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,] [any 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
7
<PAGE> 8
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,] [the Underwriters] 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,]
[the Underwriters] 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,] [the Underwriters] 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[s] Compensation received by [you, as
Underwriter,] [the Underwriters] in each case as set 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,] [the Underwriters] 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,] [no 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,] [such Underwriter] [have] [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).
8
<PAGE> 9
(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] [any] Underwriter within the meaning of the Act or the Exchange Act; and
the obligations of [you, as Underwriter,] [the Underwriters] under this Section
6 shall be in addition to any liability which [you, as Underwriter,] [the
Underwriters] 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,] [the several Underwriters] 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,] [any 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. Substitution of Underwriters. (a) If any Underwriter or Underwriters
shall fail to take up and pay for the principal amount of TARGETS agreed by such
Underwriter or Underwriters to be purchased hereunder, upon tender of such
TARGETS in accordance with the terms hereof, and the principal amount of TARGETS
not purchased does not aggregate more than 10% of the total principal amount of
the TARGETS, the remaining Underwriters shall be obligated to take up and pay
for (in proportion to the respective underwriting obligations hereunder as set
forth herein except as may otherwise be determined by you) the TARGETS which the
withdrawing or defaulting Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for
the principal amount of TARGETS agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such TARGETS in accordance with the terms
hereof, and the principal amount of TARGETS not purchased aggregates more than
10% of the total principal amount of TARGETS, and arrangements satisfactory to
you and the Offerors for the purchase of such TARGETS by other persons are not
made within 36 hours thereafter, this Agreement shall terminate. In the event of
a default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not to exceed seven full business days, as
you shall determine in order that the required changes in the Registration
Statement and the Prospectus or in any other documents or arrangements may be
effected. In the event of any such termination, the Offerors shall not be under
any liability to any Underwriter (except to the extent provided in Section 4(g)
and Section 6 hereof) nor shall any Underwriter (other than an Underwriter who
shall have failed, otherwise than for some reason permitted under this
Agreement, to purchase the principal amount of TARGETS agreed by such
Underwriter to be purchased under this Agreement) be under any liability to the
Offerors (except to the extent provided in Section 6 hereof). Nothing contained
in this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Offerors and any non-defaulting Underwriter for damages occasioned
by its default hereunder.]
[8.] [9.] 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,
9
<PAGE> 10
or (ii) any other condition of the [Underwriter's] [Underwriters'] 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.] [10.] 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,] [as
Representative of the several Underwriters,] care of Salomon Smith Barney Inc.,
388 Greenwich Street, New York, New York 10013, Attention: Manager, Investment
Banking Division.
[10.] [11.] Parties. This Agreement shall inure to the benefit of and be
binding upon the Company, the Trust and the Underwriter[s] 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.] [12.] Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[12.] (13.] 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.
10
<PAGE> 11
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Company and the Underwriter[s].
Very truly yours,
TARGETS TRUST II
By ____________________________________
as Regular Trustee
By ____________________________________
as Regular Trustee
SALOMON SMITH BARNEY HOLDINGS INC.
By ____________________________________
Name:
Title:
Confirmed as of the date first above mentioned
[on behalf of itself and the other several
Underwriters named in Schedule I hereto.]
SALOMON SMITH BARNEY INC., as [Underwriter]
[Representative of the Several Underwriters]
By ____________________________________
Name:
Title:
11
<PAGE> 1
EXHIBIT 4(a)
CERTIFICATE OF TRUST
The undersigned, the trustees of TARGETS TRUST II, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss. 3810,
hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "TARGETS TRUST II".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: January 22, 1999
/s/ Michael J. Day
-----------------------------------------
Name: Michael J. Day, as Regular
Trustee
/s/ Charles W. Scharf
-----------------------------------------
Name: Charles W. Scharf, as Regular
Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: /s/ Denis Kelly
--------------------------------------
Name: Denis Kelly
Title: Trust Officer
SALOMON SMITH BARNEY HOLDINGS INC., as
Sponsor
By: /s/ Michael J. Day
--------------------------------------
Name: Michael J. Day
<PAGE> 1
EXHIBIT 4(b)
CERTIFICATE OF TRUST
The undersigned, the trustees of TARGETS TRUST III, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss. 3810,
hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "TARGETS TRUST III".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: January 22, 1999
/s/ Michael J. Day
-----------------------------------------
Name: Michael J. Day, as Regular
Trustee
/s/ Charles W. Scharf
-----------------------------------------
Name: Charles W. Scharf, as Regular
Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: /s/ Denis Kelly
--------------------------------------
Name: Denis Kelly
Title: Trust Officer
SALOMON SMITH BARNEY HOLDINGS INC., as
Sponsor
By: /s/ Michael J. Day
--------------------------------------
Name: Michael J. Day
<PAGE> 1
EXHIBIT 4(c)
CERTIFICATE OF TRUST
The undersigned, the trustees of TARGETS TRUST IV, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss. 3810,
hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "TARGETS TRUST IV".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: January 22, 1999
/s/ Michael J. Day
-----------------------------------------
Name: Michael J. Day, as Regular
Trustee
/s/ Charles W. Scharf
-----------------------------------------
Name: Charles W. Scharf, as Regular
Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: /s/ Denis Kelly
--------------------------------------
Name: Denis Kelly
Title: Trust Officer
SALOMON SMITH BARNEY HOLDINGS INC., as
Sponsor
By: /s/ Michael J. Day
--------------------------------------
Name: Michael J. Day
<PAGE> 1
EXHIBIT 4(d)
CERTIFICATE OF TRUST
The undersigned, the trustees of TARGETS TRUST V, desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss. 3810,
hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "TARGETS TRUST V".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: January 22, 1999
/s/ Michael J. Day
-----------------------------------------
Name: Michael J. Day, as Regular
Trustee
/s/ Charles W. Scharf
-----------------------------------------
Name: Charles W. Scharf, as Regular
Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: /s/ Denis Kelly
--------------------------------------
Name: Denis Kelly
Title: Trust Officer
SALOMON SMITH BARNEY HOLDINGS INC., as
Sponsor
By: /s/ Michael J. Day
--------------------------------------
Name: Michael J. Day
<PAGE> 1
EXHIBIT 4(e)
CERTIFICATE OF TRUST
The undersigned, the trustees of TARGETS TRUST VI, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss. 3810,
hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "TARGETS TRUST VI".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: January 22, 1999
/s/ Michael J. Day
-----------------------------------------
Name: Michael J. Day, as Regular
Trustee
/s/ Charles W. Scharf
-----------------------------------------
Name: Charles W. Scharf, as Regular
Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: Denis Kelly
--------------------------------------
Name: Denis Kelly
Title: Trust Officer
SALOMON SMITH BARNEY HOLDINGS INC., as
Sponsor
By: /s/ Michael J. Day
--------------------------------------
Name: Michael J. Day
<PAGE> 1
EXHIBIT 4(f)
===========================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
TARGETS TRUST II
Dated as of , 1999
===========================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................7
SECTION 2.2 Lists of Holders of Securities...................................8
SECTION 2.3 Reports by the Institutional Trustee.............................8
SECTION 2.4 Quarterly Reports to Institutional Trustee.......................8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................8
SECTION 2.6 Acceleration Events; Waiver......................................8
SECTION 2.7 Acceleration Event; Notice......................................10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name............................................................10
SECTION 3.2 Office..........................................................11
SECTION 3.3 Purpose.........................................................11
SECTION 3.4 Authority.......................................................11
SECTION 3.5 Title to Property of the Trust..................................11
SECTION 3.6 Powers and Duties of the Regular Trustees.......................11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............14
SECTION 3.8 Powers and Duties of the Institutional Trustee..................15
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee....................................................17
SECTION 3.10 Certain Rights of Institutional Trustee........................19
SECTION 3.11 Delaware Trustee...............................................21
SECTION 3.12 Execution of Documents.........................................21
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........21
SECTION 3.14 Duration of Trust..............................................21
SECTION 3.15 Mergers........................................................22
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.........................23
SECTION 4.2 Responsibilities of the Sponsor.................................23
i
<PAGE> 3
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..............................................24
SECTION 5.2 Delaware Trustee................................................25
SECTION 5.3 Institutional Trustee; Eligibility..............................25
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally..................................................26
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.........26
SECTION 5.6 Appointment, Removal and Resignation of Trustees................26
SECTION 5.7 Vacancies among Trustees........................................28
SECTION 5.8 Effect of Vacancies.............................................28
SECTION 5.9 Meetings........................................................28
SECTION 5.10 Delegation of Power............................................29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business...................................................29
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions...................................................29
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.........................30
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust............................................31
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..........................................32
SECTION 9.2 Transfer of Trust Certificates..................................32
SECTION 9.3 Deemed Security Holders.........................................32
SECTION 9.4 Book-Entry Interests............................................33
SECTION 9.5 Notices to Clearing Agency......................................33
SECTION 9.6 Appointment of Successor Clearing Agency........................34
SECTION 9.7 Definitive TARGETS Certificates.................................34
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.........34
ii
<PAGE> 4
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability......................................................35
SECTION 10.2 Exculpation....................................................35
SECTION 10.3 Fiduciary Duty.................................................36
SECTION 10.4 Indemnification................................................37
SECTION 10.5 Outside Businesses.............................................39
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year....................................................40
SECTION 11.2 Certain Accounting Matters.....................................40
SECTION 11.3 Banking........................................................41
SECTION 11.4 Withholding....................................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.....................................................41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................43
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices........................................................44
SECTION 13.2 Governing Law..................................................45
SECTION 13.3 Intention of the Parties.......................................45
SECTION 13.4 Headings.......................................................45
SECTION 13.5 Successors and Assigns.........................................46
SECTION 13.6 Partial Enforceability.........................................46
SECTION 13.7 Counterparts...................................................46
ANNEX I TERMS OF SECURITIES................................... I-1
EXHIBIT A-1 FORM OF TARGETS CERTIFICATE........................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................... A2-1
EXHIBIT B SPECIMEN OF FORWARD CONTRACT CERTIFICATE.............. B-1
EXHIBIT C UNDERWRITING AGREEMENT................................ C-1
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
Section of
Trust Indenture
Act
of 1939, as Section of
amended Declaration
--------------- -----------
310(a)................................................... 5.3(a)
310(c)................................................... Inapplicable
311(c)................................................... Inapplicable
312(b)................................................... 2.2
313...................................................... 2.3
314(a)................................................... 2.4
314(b)................................................... Inapplicable
314(c)................................................... 2.5
314(d)................................................... Inapplicable
314(f)................................................... Inapplicable
315(a)................................................... 3.9(b)
315(c)................................................... 3.9(a)
315(d)................................................... 3.9(b)
316(a)................................................... 2.6, Annex I
316(c)................................................... 3.6(e)
- ------------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TARGETS TRUST II
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of , 1999, by the Trustees (as defined herein), the Sponsor
(as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established TARGETS TRUST II
(the "Trust"), under the Business Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of , 1999 (the "Original Declaration")
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on , 1999, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in the Forward Contract represented
by the Forward Contract Certificates and the Treasury Securities (each as
defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE> 7
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Indenture.
"Accelerated Maturity Payment" has the meaning specified in the
Indenture.
"Acceleration Event" has the meaning specified in Annex I hereto.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" has the meaning specified in Annex I.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York, are permitted or required
by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the TARGETS and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the TARGETS. The initial Clearing
Agency shall be DTC.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 8
"Closing Date" means , 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
The "Company" means SSBH in its capacity as issuer of the Forward
Contract under the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Definitive TARGETS Certificates" has the meaning specified in
Section 9.4.
"Delaware Trustee" has the meaning specified in Section 5.1.
"Distribution" has the meaning specified in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning specified in Section
10.4(b).
"Forward Contract" means the Forward Contract with respect to the
Common Stock of to be issued by the Company under the Indenture.
3
<PAGE> 9
"Forward Contract Certificates" means the certificates (defined in
the Indenture as the "Securities") evidencing interests in the Forward Contract,
a specimen of which is attached hereto as Exhibit B.
"Global Certificate" has the meaning specified in Section 9.4.
"Holder" means a Person in whose name a Trust Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 1999, between
the Company and the Indenture Trustee with respect to the Forward Contract.
"Indenture Trustee" means The Chase Manhattan Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements specified in Section 5.3.
"Institutional Trustee Account" has the meaning specified in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in Annex I.
"Legal Action" has the meaning specified in Section 3.6(g).
"Majority of the Securities", "Majority of the TARGETS" or "Majority
of the Common Securities" means, as the context may require, except as provided
in the terms of the Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class, or Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
securities representing more than 50% of all outstanding beneficial interests in
the assets of the Trust by all Holders of Securities or Holders of the relevant
class of Securities, as the case may be.
"Maturity Date" has the meaning specified in the Indenture.
"Maturity Payment" has the meaning specified in the Indenture.
4
<PAGE> 10
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning specified in Annex I.
"Quarterly Distributions" has the meaning specified in Annex I.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
designated officers and who, in any case, has direct responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom
5
<PAGE> 11
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the TARGETS.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means SSBH or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"SSBH" means Salomon Smith Barney Holdings Inc., a Delaware
corporation, together with any successor entity in a merger, consolidation or
amalgamation.
"Successor Delaware Trustee" has the meaning specified in Section
5.6.
"Successor Entity" has the meaning specified in Section 3.15(b).
"Successor Institutional Trustee" has the meaning specified in
Section 5.6.
"Successor Securities" has the meaning specified in Section 3.15(b).
"Super Majority" has the meaning specified in Section 2.6(a)(ii).
"TARGETS" has the meaning specified in Section 7.1.
"TARGETS Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"TARGETS Certificate" means a definitive certificate in fully
registered form representing one or more TARGETS substantially in the form of
Exhibit A-1.
"TARGETS Guarantee" means the guarantee agreement dated as
of , 1999, of the Sponsor in respect of the TARGETS.
"Tax Event" has the meaning specified in Annex I.
"10% of the Securities" means, as the context may require, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class, Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
Securities representing 10% or more of the beneficial interests in the assets of
the
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Trust by all Holders of Securities or Holders of the relevant class of
Securities, as the case may be.
"Treasury Proceeds" has the meaning specified in Section 3.6(d).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" means the securities having the terms
specified in Schedule I hereto; any payments thereunder shall be made to the
Trust by 10:00 a.m. on the relevant date for Quarterly Distributions in respect
of the TARGETS.
"Trust Certificate" means a Common Security Certificate or a TARGETS
Certificate.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof and references herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
"Yield Enhancement Payments" has the meaning specified in the
Indenture.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
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(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the TARGETS such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Quarterly Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information, if any, as required by ss. 314 of the Trust Indenture Act and the
compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314 of the Trust Indenture
Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters specified in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Acceleration Events; Waiver.
(a) The Holders of a Majority of TARGETS may, by vote, on behalf of
the Holders of all of the TARGETS, waive any past Acceleration Event in respect
of the TARGETS and its consequences, provided that, if the underlying
Acceleration Event under the Indenture:
(i) is not waivable under the Indenture, the Acceleration Event
under this Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority (determined in accordance with the Indenture) of the outstanding
Forward Contract Certificates (a "Super Majority") affected thereby, only
the Holders of at least the same proportion of the TARGETS that the
relevant Super Majority represents of the aggregate outstanding beneficial
interests in the Forward Contract represented by all the TARGETS
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outstanding may waive such Acceleration Event in respect of the TARGETS
under this Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Acceleration Event with respect to the
TARGETS arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent or other
default or an Acceleration Event with respect to the TARGETS or impair any right
consequent thereon. Any waiver by the Holders of the TARGETS of an Acceleration
Event with respect to the TARGETS shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Acceleration Event with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority of the Common Securities may, by vote,
on behalf of the Holders of all of the Common Securities, waive any past
Acceleration Event with respect to the Common Securities and its consequences,
provided that, if the underlying Acceleration Event:
(i) is not waivable under the Indenture, the Acceleration Event
under the Declaration shall also not be waivable, except where the Holders
of the Common Securities are deemed to have waived such Acceleration Event
under the Declaration as provided in this Section 2.6(b); or
(ii) is waivable only with the consent of a Super Majority of the
Securities, only the Holders of at least the proportion of the Common
Securities that the relevant Super Majority represents of the aggregate
outstanding beneficial interests in the Forward Contract represented by
all the Common Securities outstanding may waive such Acceleration Event in
respect of the Common Securities under the Declaration, except where the
Holders of the Common Securities are deemed to have waived such
Acceleration Event under the Declaration as provided in this Section
2.6(b);
provided further, that each Holder of Common Securities will be deemed to have
waived any such Acceleration Event and all Acceleration Events with respect to
the Common Securities and their consequences until all Acceleration Events with
respect to the TARGETS have been cured, waived or otherwise eliminated, and
until such Acceleration Events with respect to the TARGETS have been so cured,
waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the TARGETS and only the Holders of
the TARGETS will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon the waiver of an Acceleration Event by
the Holders of a Majority of the
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Common Securities, any such default shall cease to exist and any Acceleration
Event with respect to the Common Securities arising therefrom shall be deemed to
have been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Acceleration Event with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Acceleration Event under the Indenture by the
Institutional Trustee at the direction of the Holders of the TARGETS,
constitutes a waiver of the corresponding Acceleration Event under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Acceleration Event; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Acceleration Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Acceleration Event as defined in the Indenture not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein) and (ii) any notice of default received
from the Indenture Trustee with respect to any Forward Contract Certificate
which notice from the Institutional Trustee to the Holders shall state that an
Acceleration Event under the Indenture also constitutes an Acceleration Event
with respect to the Securities; provided that, except for a default in the
payment of amounts due at maturity of any of the Trust Certificates, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration shall
have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "TARGETS Trust II", as such name may be modified
from time to time by the Regular Trustees following written notice to the
Delaware Trustee, the Institutional Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is 388 Greenwich
Street, New York, New York 10013. On ten Business Days written notice to the
Holders of Securities, the Delaware Trustee and the Institutional Trustee, the
Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities and use at least 85% of the proceeds from such sale to
purchase the Forward Contract Certificates and to use not more than 15% of such
proceeds to acquire the Treasury Securities, and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as
specified in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Forward
Contract Certificates, the Treasury Securities and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of TARGETS and no more than one series of Common Securities, and,
provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of the TARGETS and
the Common Securities on the Closing Date and any other date TARGETS are
sold pursuant to any overallotment option granted to any underwriters in
accordance with the terms of an underwriting agreement;
(b) in connection with the issue and sale of the TARGETS, at the
direction of the Sponsor, to:
(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, including a registration statement under Rule 415 or Rule
462(b) of the Securities Act, in each case prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the
TARGETS;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the TARGETS in any
jurisdiction in which the Sponsor has determined to qualify or
register such TARGETS for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Chicago Board Options Exchange, any other national
stock exchange or national securities market for listing upon notice
of issuance of any TARGETS;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the TARGETS under Section 12(b) of
the Exchange Act; and
(v) deliver an underwriting agreement providing for the sale
of the TARGETS;
(c) to enter into the Forward Contract and acquire the Forward
Contract Certificates and the Treasury Securities with the proceeds of the
sale of the TARGETS and the Common Securities and to take all actions and
perform such duties as may be required pursuant to the terms of the
Forward Contract Certificates and the Treasury Securities; provided,
however, that the Regular Trustees shall cause legal title to the Forward
Contract Certificates and the Treasury Securities to be held of record in
the name of the Institutional Trustee for the benefit of the Holders of
the Securities;
(d) upon an Acceleration Event, to (i) give the Sponsor and the
Institutional Trustee prompt written notice of the occurrence of such
Acceleration Event; and (ii) give written instructions to the
Institutional Trustee to (a) liquidate the Treasury Securities by
soliciting at least three all-cash bids (one of which may be from an
affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders, and (b) distribute the net
proceeds therefrom (the "Treasury Proceeds"), the
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Accelerated Maturity Payment to holders of the Trust Securities, provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to an Acceleration Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions and voting rights, and to issue relevant notices to the
Holders of Securities;
(f) to take all actions and perform such duties as may be required
pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles), managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the TARGETS or to enable the Trust to effect the purposes for which the
Trust was created;
(n) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in
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carrying out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
and
(ii) causing the Trust to be classified for United Suites
federal income tax purposes as a grantor trust;
provided that such action does not adversely affect the
interests of Holders;
(o) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(p) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers specified in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust
specified in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee specified in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Company.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Institutional
Trustee in its role as Institutional Trustee) shall not, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee in its
role as Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from the Forward
Contract Certificates and the Treasury Securities, but shall promptly
distribute all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) dispose of the Forward Contract Certificates prior to earlier
of the Maturity Date or an Accelerated Maturity Date or dispose of any of
the Treasury Securities prior to an Accelerated Maturity Date;
(iii) acquire any assets other than as expressly provided herein;
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(iv) possess Trust property for other than a Trust purpose;
(v) make any loans or incur any indebtedness;
(vi) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(viii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Institutional Trustee with respect to the Forward
Contract, the Forward Contract Certificates or the Treasury Securities,
(B) waive any past default that is waivable under the Forward Contract,
the Forward Contract Certificates or the Treasury Securities, (C) exercise
any right to rescind or annul any declaration that the Maturity Payment or
Accelerated Maturity Payment shall be due and payable in regard to the
Forward Contract Certificates or (D) consent to any amendment,
modification or termination of the Indenture or the Forward Contract
Certificates where such consent shall be required unless the Trust shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of such action,
the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Forward Contract Certificates and the
Treasury Securities shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities.
The right, title and interest of the Institutional Trustee to the Forward
Contract Certificates and the Treasury Securities shall vest automatically in
each Person who may hereafter be appointed as Institutional Trustee in
accordance with Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Forward
Contract Certificates or the Treasury Securities have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Forward Contract Certificates or the Treasury Securities to
the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee
does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Forward Contract Certificates and the Treasury Securities held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Securities from
the
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Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an account that is maintained with the Institutional Trustee in its
corporate trust department or with a banking institution the rating on
whose long-term unsecured indebtedness assigned by a "nationally
recognized statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least equal to
the rating assigned to unsubordinated indebtedness of SSBH by a nationally
recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to carry out the functions described in clause (i) above; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Accelerated Maturity Payment and the Treasury Proceeds
to Holders of Securities upon the occurrence of an Acceleration Event or
other specified circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Acceleration Event of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Forward Contract
Certificates under the Indenture and, if an Acceleration Event actually known to
a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as a holder of Forward Contract Certificates subject to the
rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
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(h) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of the Treasury Securities
and the Institutional Trustee shall, for the benefit of the Holders of the
Securities, enforce its rights as a holder of the Treasury Securities subject to
the rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
(i) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions on behalf of the Trust with
respect to all Securities and any such Paying Agent shall comply with ss. 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Institutional
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees specified in Section 3.6.
The Institutional Trustee must exercise the powers specified in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any
Acceleration Event and after the curing of all Acceleration Events that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Acceleration Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Acceleration Event and after the
curing or waiving of all such Acceleration Events that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority of the
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Forward Contract
Certificates, the Treasury Securities and the Institutional Trustee
Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Forward Contract, the Forward Contract Certificates, the Treasury
Securities or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor;
(ix) the granting of any right to the Institutional Trustee
hereunder shall not be deemed to impose on the Institutional Trustee an
obligation to exercise such rights subject to Section 3.09(b)(x);
(x) the Institutional Trustee shall not be obligated to exercise any
remedy or take any action hereunder unless directed to do so by the
Holders of a Majority of the Securities and shall have no liability for
its failure to act pending receipt of any such direction.
This Section 3.9 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction, request, certification, order or act of the
Sponsor or the Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate and any Resolution of
the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete
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authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Acceleration Event, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion of Securities as would be entitled to
direct the Institutional Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action
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until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as specified in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, either Regular Trustee or, if there is only one, such Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for five (5) years from the Closing Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the TARGETS and the Common
Securities (together, the "Successor Securities") so long as such
series of Successor Securities ranks the same as the series of
Securities for which it is substituted ranks with respect to
Distributions and payments upon liquidation and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional
Trustee as the Holder of the Forward Contract Certificates and the
Treasury Securities;
(iii) any Successor Securities to the TARGETS are listed, or any
Successor Securities to the TARGETS will be listed upon notification of
issuance, on any national securities exchange or with any organization on
which the TARGETS are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the TARGETS (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
will not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the TARGETS Guarantee.
(c) Notwithstanding Section 3.l5(b), the Trust shall not, without
the consent of Holders of all of the Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if in the opinion of
a nationally recognized independent tax counsel experienced in such matters,
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to at least 3% of the capital
of the Trust, at the same time as the TARGETS are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the TARGETS, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form,
including a registration statement under Rule 415 or Rule 462(b) of the
Securities Act, including any pre-effective or post-
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effective amendments thereto, relating to the registration under the
Securities Act of the TARGETS;
(b) to determine the jurisdictions in which to take appropriate
action to qualify or register for sale all or part of the TARGETS and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such jurisdictions;
(c) to prepare for filing by the Trust an application to the Chicago
Board Options Exchange, any other national stock exchange or national
securities exchange for listing upon notice of issuance of any TARGETS;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
TARGETS under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of an underwriting agreement or
agreements providing for the sale of the TARGETS.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority of the
Common Securities voting as a class at a meeting of the Holders of the
Common Securities or by written consent of such holders in lieu of a
meeting,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, shall be an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
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SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall
be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as specified in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-5 and to the extent Rule 3a-5 requires
a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Institutional Trustee shall possess those
qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect specified in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
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(d) The TARGETS Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as specified in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Michael J. Day
Charles W. Scharf
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
The initial Institutional Trustee shall be:
The Chase Manhattan Bank
(b) Except as expressly specified in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee; and
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities, by vote of the Holders of
a Majority of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities or by written consent of such holders in
lieu of a meeting.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Institutional Trustee under
Section 5.3 (a "Successor Institutional Trustee") has been appointed and
has accepted such appointment by written instrument executed by such
Successor Institutional Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days
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after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Institutional Trustee or Delaware Trustee, as applicable, may petition
any court of competent jurisdiction for appointment of a Successor Institutional
Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.
(f) No Institutional Trustee or Delaware Trustee shall be Liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority
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of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. In
the event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as specified herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the TARGETS and the Common Securities in accordance with the preferences
specified in their respective terms. If and to the extent that (i) the Company
makes a payment in respect of the Forward Contract Certificates held by the
Institutional Trustee or (ii) the issuer of the Treasury Securities makes a
payment in respect of the Treasury Securities held by the Institutional Trustee
(the amount of any such payments described in the foregoing clauses (i) and (ii)
is referred to herein as a "Payment Amount"), the Institutional Trustee shall be
and is directed to make a distribution (a "Distribution") of the Payment Amount
to the Holders on a Pro Rata basis.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue (i)
one class of securities, known as the Targeted Growth Enhanced Terms
Securities(R) ("TARGETS") representing undivided beneficial interests in the
assets of the Trust having such terms as are specified in Annex I and (ii) one
class of common securities (the "Common Securities") representing undivided
beneficial interests in the assets of the Trust having such terms as are
specified in Annex I. The Trust shall issue no securities or other interests in
the assets of the Trust other than the TARGETS and the Common Securities.
(b) The Trust Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Trust Certificates so signed shall be delivered by the Trust,
such Trust Certificates nevertheless may be delivered as though the person who
signed such Trust Certificates had not ceased to be such Regular Trustee; and
any Trust Certificate may be signed on behalf of the Trust by any person who, at
the actual date of execution of such Security, shall be a Regular Trustee of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not a Regular Trustee. Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable.
(e) Every Person, by virtue of having become a Holder or a TARGETS
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor, the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Acceleration Event
pursuant to which the Trust is dissolved in accordance with the terms of
the Securities and the Accelerated Maturity Payment and the Treasury
Proceeds shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(v) upon distribution to the Holders of the Maturity Payment and the
final payment due in respect of the Treasury Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust specified in
Section 3.14; provided that so long as any TARGETS are outstanding and are
not held entirely by SSBH or an affiliate or related party, the Trust may
not voluntarily liquidate, dissolve, wind-up or terminate except in
connection with the occurrence of an Acceleration Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1 (a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions specified in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, TARGETS shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would fail to be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Trust Certificates.
The Regular Trustees shall provide for the registration of Trust
Certificates and of transfers of Trust Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges that may
be imposed in relation to it. The Regular Trustees hereby appoint the
Institutional Trustee the transfer agent for Trust Certificates. Upon surrender
for registration of transfer of any Trust Certificate, the Regular Trustees
shall cause one or more new Trust Certificates to be issued in the name of the
designated transferee or transferees. Every Trust Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Trust
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees. A transferee of a Trust Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Trust Certificate. By acceptance of a Trust Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Trust
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Trust Certificate and of the Securities represented by such
Trust Certificate for purposes of receiving Distributions and
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for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Trust Certificate
or in the Securities represented by such Trust Certificate on the part of any
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the TARGETS, the TARGETS
Certificates, on original issuance, will be issued in the form of one or more,
fully registered, global certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no TARGETS
Beneficial Owner will receive a definitive TARGETS Certificate representing such
TARGETS Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered TARGETS
Certificates (the "Definitive TARGETS Certificates") have been issued to the
TARGETS Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the TARGETS and
the sole holder of the Global Certificates and shall have no obligation to
the TARGETS Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the TARGETS Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such TARGETS Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and the Clearing
Agency shall receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. The Clearing Agency
will make book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the TARGETS Holders is
required under this Declaration, unless and until Definitive TARGETS
Certificates shall have been issued to the TARGETS Beneficial Owners pursuant to
Section 9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the TARGETS Holders to the Clearing Agency, and
upon doing so shall have no obligations to give any additional notice to the
TARGETS Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS, the Regular Trustees may, in
their sole discretion, appoint a successor Clearing Agency with respect to such
TARGETS.
SECTION 9.7 Definitive TARGETS Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the TARGETS;
then:
(x) Definitive TARGETS Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such TARGETS; and
(y) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive TARGETS Certificates to be delivered to TARGETS Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive TARGETS
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which TARGETS may be listed, or to conform
to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If:
(a) any mutilated Trust Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Trust
Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
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then, in the absence of notice that such Trust Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
denomination. In connection with the issuance of any new Trust Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly specified in this Declaration, the TARGETS
Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which return shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the TARGETS shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
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(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (a) (i) The Company shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
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(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct
specified in paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Company if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees,
(ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Regular Trustees, counsel
or the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or TARGETS Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Company
or TARGETS Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Company and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
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(vii) The Company may purchase and maintain insurance on behalf of
any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Company agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as specified in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have
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the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with United States generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, to the extent, if any, required by the Trust
Indenture Act, within 180 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Forward Contract Certificates or the Treasury Securities held
by the Institutional Trustee shall be made directly to the Institutional Trustee
Account and no other funds of the Trust shall be deposited in the Institutional
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made to any Holder, the Trust may reduce subsequent
Distributions to such Holder by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
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(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) if such proposed amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, an
opinion of counsel (who may be counsel to the Sponsor or the Trust
and which opinion shall be prepared at the expense of the Sponsor)
that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and
(ii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be specified in the terms of such
Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article
V to increase or decrease the number of and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority of the Common
Securities.
(g) Subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of the Declaration to
such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the TARGETS are
listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities
representing at least 10% of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more notices in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage specified in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange or national securities
market on which the TARGETS are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning
not less than the minimum amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot
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submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange or national securities market on which the TARGETS are then
listed or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail postage prepaid, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address specified below (or such other address as the Trust may
give notice of to the Holders of the Securities):
388 Greenwich Street
New York, New York 10013
(b) if given to the Delaware Trustee, at the mailing address
specified below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
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<PAGE> 50
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at the mailing address
specified below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor specified below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
388 Greenwich Street
New York, New York 10013
(e) if given to any other Holder, at the address specified on the
books and records of the Trust.
All notices provided for in this Declaration shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
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<PAGE> 51
SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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<PAGE> 52
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
-----------------------------------------
Michael J. Day, as Regular Trustee
-----------------------------------------
Charles W. Scharf, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Institutional Trustee
By:
--------------------------------------
Name:
Title:
SALOMON SMITH BARNEY HOLDINGS INC.
as Sponsor
By:
--------------------------------------
Name:
Title:
<PAGE> 53
SCHEDULE I
TREASURY SECURITIES
All forms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
<TABLE>
<CAPTION>
Par Zero-Coupon Strip Rate Price Cost
- --- ----------------- ---- ----- ----
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 54
ANNEX I
TERMS OF
THE TARGETS
AND
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 1999 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the TARGETS and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
specified in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. Designation and Number.
(a) TARGETS. Securities of the Trust are hereby designated for
the purposes of identification only as "Targeted Growth Enhanced Terms
Securities" (the "TARGETS"). The certificates evidencing the TARGETS shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange or
national securities market on which the TARGETS are listed.
(b) Common Securities. Securities of the Trust are hereby
designated for the purposes of identification only as "Trust Common Securities"
(the "Common Securities" and, together with the TARGETS, the "Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be a Pro Rata
portion of (i) all monies received by the Trust (a) as quarterly distributions
in respect of the Treasury Securities and (b) as Yield Enhancement Payments, if
any, with respect to the Forward Contract (together, the "Quarterly
Distributions"), (ii) the Maturity Payment or the Accelerated Maturity Payment,
as the case may be, with respect to the Forward Contract and (iii) upon the sale
of the Treasury Securities by the Institutional Trustee following an
Acceleration Event, the net proceeds received by the Trust (the "Treasury
Proceeds") from the sale of such Treasury Securities. A Distribution is payable
only to the extent that monies are received in respect of the Forward Contract
Certificates or Treasury Securities held by the Institutional Trustee on behalf
of the Trust and to the extent the Trust has funds available therefor.
(b) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record
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dates. While the TARGETS remain in book-entry only form, the relevant record
dates for Distributions of the Maturity Payment or Accelerated Maturity Payment
shall be one Business Day prior to the date such Maturity Payment or Accelerated
Maturity Payment, as the case may be, is received by the Trust with respect to
the Forward Contract Certificates. While the TARGETS remain in book-entry only
form, the relevant record dates for Quarterly Distributions shall be one
Business Day prior to the relevant payment dates, which payment dates shall
correspond to the dates on which payments are made in respect of, and in
accordance with the terms of, the Treasury Securities and the Forward Contract
Certificates. While the TARGETS remain in book-entry only form, the relevant
record date for Distributions of the Treasury Proceeds shall be the date that is
one Business Day prior to the date such Treasury Proceeds are received by the
Trust upon liquidation of the Treasury Securities. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the TARGETS will be made as described under the heading "Description
of the TARGETS -- Book-Entry Only Issuance" in the Prospectus dated ,
1999 (the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust with respect to the TARGETS. The relevant
record dates for the Common Securities shall be the same record dates as for the
TARGETS. If the TARGETS shall not continue to remain in book-entry only form,
the relevant record dates for any Distributions shall conform to the rules of
any securities exchange or national securities market on which they are listed
and, if none, shall be 15 days before the relevant payment dates, which payment
dates shall correspond to the dates on which payments are made in respect of,
and in accordance with the terms of, the Treasury Securities and the Forward
Contract Certificates and which record date shall be confirmed by the Regular
Trustees in writing to the Institutional Trustee. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of either the Company having failed to make a payment under the Forward
Contract or the issuer of the Treasury Securities having failed to make a
payment in respect of the Treasury Securities, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on a special record date which shall be the
date on which the amount of the defaulted Distributions are actually received by
the Trust. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
Except as otherwise provided herein, in the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the Holders
of the Securities on the date of the dissolution, winding-up or termination, as
the case may be, will be entitled to receive
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<PAGE> 56
distributions out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors of the
Trust, on a Pro Rata basis.
4. Distribution Upon an Acceleration Event.
(a) If, at any time, a Tax Event, an Investment Company Event or a
Bankruptcy Event (each as defined herein and each an "Acceleration Event") shall
occur and be continuing, the Regular Trustees shall give written instructions to
the Institutional Trustee to (a) dissolve the Trust, liquidate the Treasury
Securities by soliciting at least three all cash bids (one of which may be from
an affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders and, (b) after satisfaction of
creditors, cause to be distributed as soon as is practicable following the
occurrence of such Acceleration Event, to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, of (i)
the Accelerated Maturity Payment and (ii) the Treasury Proceeds.
"Tax Event" means that SSBH shall have requested and received and
shall have delivered to the Regular Trustees an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that there has
been (a) an amendment to, change in or announced proposed change in the laws (or
any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of SSBH or
any of its subsidiaries, or the Trust, or a threatened challenge asserted in
writing against any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Forward Contract
Certificates or the TARGETS, which amendment or change is adopted or which
proposed change, decision or pronouncement is announced or which action,
clarification or challenge occurs on or after the date of the Prospectus
relating to the original issuance of the TARGETS (collectively a "Tax Action"),
which Tax Action relates to any of the items described in (i) and (ii) below,
and that there is more than an insubstantial risk that (i) the Trust is, or will
be, subject to United States federal income tax with respect to income accrued
or received in respect of the Forward Contract or the Treasury Securities, or
(ii) the Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means that SSBH shall have requested and
received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent legal counsel experienced in such matters to
the effect that as a result of the occurrence on or after the date hereof of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
I-3
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"Bankruptcy Event" means either of the following shall have
occurred: (i) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or (ii) the commencement by the Company of a voluntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action.
On and from the date fixed by the Regular Trustees for any
dissolution and distribution pursuant to this paragraph 4: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the TARGETS,
will receive its Pro Rata portion of (a) the Accelerated Maturity Payment and
(b) the Treasury Proceeds, in each case to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing TARGETS held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent the right to receive a Pro
Rata portion of (a) the Accelerated Maturity Payment and (b) the Treasury
Proceeds.
(b) Acceleration Event Distribution procedures will be as follows:
(i) Notice of any Acceleration Event (each, an "Acceleration
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Securities as promptly as practicable following the
occurrence of such Acceleration Event. Each Acceleration Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust.
(ii) If an Acceleration Event occurs, then (A) while the TARGETS are
in book-entry only form, with respect to the TARGETS, by 12:00 noon, New
York City time, on the Accelerated Maturity Date, provided that the
Company has paid the Institutional Trustee by 10:00 a.m. on such date an
amount of cash equal to the Accelerated Maturity Payment, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the Pro
Rata portion of the sum of the Accelerated Maturity Payment and the
Treasury Proceeds applicable to the TARGETS and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay
such Pro Rata portion of the sum of the Accelerated Maturity Payment and
the Treasury Proceeds to the Holders of the TARGETS, and (B) with respect
to TARGETS issued in definitive form and Common
I-4
<PAGE> 58
Securities, provided that the Company has paid the Institutional Trustee
by 10:00 a.m. on such date an amount of cash equal to the Pro Rata amount
of the Accelerated Maturity Payment applicable to such TARGETS issued in
definitive form and Common Securities, the Institutional Trustee will pay
such Pro Rata portion of the Accelerated Maturity Payment and a Pro Rata
portion of the Treasury Proceeds to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the relevant record date. If any Accelerated
Maturity Date is not a Business Day, then payment of the sum of the
Accelerated Maturity Payment and the Treasury Proceeds payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such Accelerated Maturity Date.
(iii) Acceleration Notices shall be sent by the Regular Trustees on
behalf of the Trust to (A) in respect of the TARGETS, DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global TARGETS
Certificates have been issued or, if Definitive TARGETS Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may at any time and from time to time purchase outstanding
TARGETS by tender, in the open market or by private agreement.
5. Voting Rights - TARGETS.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the TARGETS will have no
voting rights.
(b) Subject to the requirements specified in this paragraph, the
Holders of a Majority of the TARGETS, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or direct the exercise of any trust or
power conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee, as holder of the Forward Contract
Certificates and the Treasury Securities, to (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercise any trust or power conferred on the Indenture Trustee with
respect to the Forward Contract Certificates, (ii) direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or exercise any trust or power conferred on the Institutional Trustee
with respect to the Treasury Securities, (iii) waive the consequences of any
Acceleration Event under the Indenture that are waivable under the Indenture,
(iv) exercise any right to rescind or annul a declaration that the Accelerated
Maturity Payment shall be due and payable, or (v) consent to any amendment,
modification or termination of the Indenture or the Forward Contract where such
consent shall be required, provided, however, that where a consent or action
would require the
I-5
<PAGE> 59
consent or act of Holders of more than a majority (determined in accordance with
the Indenture) of the outstanding Forward Contract Certificates (a "Super
Majority"), such consent or action shall not be effective until Holders of at
least the proportion of the TARGETS that the relevant Super Majority represents
of the aggregate beneficial interests in the Forward Contract represented by all
the TARGETS outstanding shall have consented to such action or provided such
consent. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Forward Contract Certificates and the Treasury Securities, shall
not take any of the actions described in clauses (i), (ii), (iii), (iv) or (v)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If the Institutional Trustee fails to enforce its rights under the
Forward Contract, any Holder of TARGETS may directly institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Forward Contract without first instituting a legal proceeding against
the Institutional Trustee or any other Person or entity. If the Company fails to
pay amounts owed on the Forward Contract on the date such amounts are otherwise
payable, then a Holder of TARGETS may also directly institute a proceeding for
enforcement of payment to such Holder (a "Direct Action") of the amounts owed in
respect of such Holder's Pro Rata interest in the Forward Contract on or after
the due date specified in the Forward Contract without first (i) directing the
Institutional Trustee to enforce the terms of the Forward Contract or (ii)
instituting a legal proceeding directly against the Company to enforce the
Institutional Trustee's rights under the Forward Contract. Except as provided in
the preceding sentence, the Holders of TARGETS will not be able to exercise
directly any other remedy available to the Holders of the Forward Contract
Certificates. In connection with such Direct Action, SSBH will be subrogated to
the rights of such Holder of TARGETS under the Declaration to the extent of any
payment made by SSBH to such Holder of TARGETS in such Direct Action.
Any required approval or direction of Holders of TARGETS may be
given at a separate meeting of Holders of TARGETS convened for such purpose, at
a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
TARGETS are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
TARGETS. Each such notice will include a statement setting forth (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the TARGETS will be required
for the Trust to (i) cancel TARGETS Certificates, (ii) to make Distributions or
(iii) to distribute any Quarterly Distributions, the Maturity Payment, the
Accelerated Maturity Payment and the Treasury Proceeds held by the Institutional
Trustee, in each case in accordance with the Declaration and the terms of the
Securities.
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Notwithstanding that Holders of TARGETS are entitled to vote or
consent under any of the circumstances described above, any of the TARGETS that
are owned by the Sponsor or any of its Affiliates shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Acceleration Event with respect to the TARGETS has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority of the Common Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Forward Contract Certificates and the Treasury
Securities, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred on the Institutional Trustee with respect to the
Forward Contract, (ii) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee with respect to
the Treasury Securities, (iii) waive the consequences of any Acceleration Event
under the Indenture that are waivable under the Indenture, (iv) exercise any
right to rescind or annul a declaration that the Accelerated Maturity Payment
shall be due and payable or (v) consent to any amendment, modification or
termination of the Indenture or Forward Contract Certificates where such consent
shall be required, provided that where a consent or action under the Indenture
would require the consent or act of the Holders of a Super Majority of the
Forward Contract Certificates, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion of the Common Securities that the relevant Super Majority
represents of the aggregate beneficial interests in the Forward Contract
represented by all the Common Securities outstanding. Pursuant to this paragraph
6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the Indenture Trustee as
specified above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the
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Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to (i) cancel Common Securities, (ii) to make
Distributions, (iii) to liquidate the Treasury Securities or (iv) to distribute
any Quarterly Distribution, the Maturity Payment, the Accelerated Maturity
Payment or the Treasury Proceeds to Holders of the Securities, in each case in
accordance with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the TARGETS or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority of such
class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Forward Contract Certificates is required under the Indenture with
respect to any amendment, modification or termination of the Indenture or the
Forward Contract Certificates, the Institutional Trustee shall request the
written direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority of the
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of the holders of a Super
Majority of the Forward Contract Certificates, the Institutional Trustee may
only give such consent at the direction of the Holders of a Super
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Majority of the Securities outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this paragraph 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean proportionately to each
Holder of Securities according to the aggregate beneficial interests in the
assets of the Trust represented by the Securities held by the relevant Holder in
relation to the aggregate beneficial interests in the assets of the Trust
represented by all Securities outstanding unless, in relation to a payment, an
Acceleration Event under the Declaration has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the TARGETS proportionately according to the aggregate beneficial
interests in the assets of the Trust represented by the TARGETS held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all TARGETS outstanding, and only after satisfaction of
all amounts owed to the Holders of the TARGETS, to each Holder of Common
Securities proportionately according to the aggregate beneficial interests in
the assets of the Trust represented by the Common Securities held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all Common Securities outstanding.
9. Ranking.
The TARGETS rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Acceleration Event occurs
and is continuing in respect of the Forward Contract Certificates held by the
Institutional Trustee, no payments in respect of Distributions on, or payments
upon liquidation or otherwise with respect to, the Common Securities shall be
made until the Holders of TARGETS shall be paid in full the Distributions and
payments upon liquidation or otherwise to which they are entitled at the time.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
TARGETS to be listed on the .
11. Acceptance of Securities Guarantee, the Indenture and the
Treasury Securities.
Each Holder of TARGETS and Common Securities, by the acceptance
thereof, agrees to the provisions of the TARGETS Guarantee, and to the
provisions of the Indenture and the Treasury Securities.
I-9
<PAGE> 63
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge on written request to the
Sponsor at its principal place of business.
I-10
<PAGE> 64
EXHIBIT A-1
FORM OF TARGETS(R) CERTIFICATE
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE DECLARATION AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Securities
1
CUSIP NO.
Certificate Evidencing Securities
of
TARGETS Trust II
Targeted Growth Enhanced Terms Securities
TARGETS TRUST II, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of ( ) securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Targeted Growth Enhanced Terms Securities (the "TARGETS"). The
TARGETS are transferable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper
A1-1
<PAGE> 65
form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the TARGETS are specified in, and
this certificate and the TARGETS represented hereby are issued and shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of , 1999, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the TARGETS as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder
is entitled to the benefits of the TARGETS Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the TARGETS Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the TARGETS as a beneficial interest in a
pro rata portion of (i) the Treasury Securities and (ii) a cash settled forward
purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
-----------------------------------------
Michael J. Day, as Regular Trustee
-----------------------------------------
Charles W. Scharf, as Regular Trustee
A1-2
<PAGE> 66
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this TARGETS
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________
________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ____________________________
Signature: _______________________
(Sign exactly as your name appears on the other side of this TARGETS
Certificate)
A1-3
<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SPECIFIED IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Securities
C-1
Certificate Evidencing Securities
of
TARGETS Trust II
Trust Common Securities
TARGETS TRUST II, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Salomon Smith
Barney Holdings Inc., a Delaware corporation (the "Holder"), is the registered
owner of common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the Trust Common Securities (the
"Common Securities"). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney upon surrender
of this certificate duly endorsed and in proper form for transfer and
satisfaction of the other conditions specified in the Declaration (as defined
below), including, without limitation, Section 9.1 thereof. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of , 1999, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the Common Securities
Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the Common Securities as a beneficial
interest in a pro rata portion of (i) the Treasury Securities and (ii) a cash
settled forward purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
-----------------------------------
Michael J. Day, as Regular Trustee
------------------------------------
Charles W. Scharf, as Regular Trustee
A2-1
<PAGE> 68
----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________ agent to transfer this TARGETS Certificate on
the books of the Trust. The agent may substitute another to act for him or
her.
Date: _______________________________
Signature: __________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-2
<PAGE> 69
EXHIBIT B
SPECIMEN OF FORWARD CONTRACT CERTIFICATE
B-1
<PAGE> 70
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4(g)
=============================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
TARGETS TRUST III
Dated as of , 1999
=============================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................7
SECTION 2.2 Lists of Holders of Securities...................................8
SECTION 2.3 Reports by the Institutional Trustee.............................8
SECTION 2.4 Quarterly Reports to Institutional Trustee.......................8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................8
SECTION 2.6 Acceleration Events; Waiver......................................8
SECTION 2.7 Acceleration Event; Notice......................................10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name............................................................10
SECTION 3.2 Office..........................................................11
SECTION 3.3 Purpose.........................................................11
SECTION 3.4 Authority.......................................................11
SECTION 3.5 Title to Property of the Trust..................................11
SECTION 3.6 Powers and Duties of the Regular Trustees.......................11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............14
SECTION 3.8 Powers and Duties of the Institutional Trustee..................15
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee....................................................17
SECTION 3.10 Certain Rights of Institutional Trustee........................19
SECTION 3.11 Delaware Trustee...............................................21
SECTION 3.12 Execution of Documents.........................................21
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........21
SECTION 3.14 Duration of Trust..............................................21
SECTION 3.15 Mergers........................................................22
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.........................23
SECTION 4.2 Responsibilities of the Sponsor.................................23
i
<PAGE> 3
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..............................................24
SECTION 5.2 Delaware Trustee................................................25
SECTION 5.3 Institutional Trustee; Eligibility..............................25
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally..................................................26
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.........26
SECTION 5.6 Appointment, Removal and Resignation of Trustees................26
SECTION 5.7 Vacancies among Trustees........................................28
SECTION 5.8 Effect of Vacancies.............................................28
SECTION 5.9 Meetings........................................................28
SECTION 5.10 Delegation of Power............................................29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business...................................................29
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions...................................................29
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.........................30
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust............................................31
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..........................................32
SECTION 9.2 Transfer of Trust Certificates..................................32
SECTION 9.3 Deemed Security Holders.........................................32
SECTION 9.4 Book-Entry Interests............................................33
SECTION 9.5 Notices to Clearing Agency......................................33
SECTION 9.6 Appointment of Successor Clearing Agency........................34
SECTION 9.7 Definitive TARGETS Certificates.................................34
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.........34
ii
<PAGE> 4
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability......................................................35
SECTION 10.2 Exculpation....................................................35
SECTION 10.3 Fiduciary Duty.................................................36
SECTION 10.4 Indemnification................................................37
SECTION 10.5 Outside Businesses.............................................39
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year....................................................40
SECTION 11.2 Certain Accounting Matters.....................................40
SECTION 11.3 Banking........................................................41
SECTION 11.4 Withholding....................................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.....................................................41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................43
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices........................................................44
SECTION 13.2 Governing Law..................................................45
SECTION 13.3 Intention of the Parties.......................................45
SECTION 13.4 Headings.......................................................45
SECTION 13.5 Successors and Assigns.........................................46
SECTION 13.6 Partial Enforceability.........................................46
SECTION 13.7 Counterparts...................................................46
ANNEX I TERMS OF SECURITIES................................... I-1
EXHIBIT A-1 FORM OF TARGETS CERTIFICATE........................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................... A2-1
EXHIBIT B SPECIMEN OF FORWARD CONTRACT CERTIFICATE.............. B-1
EXHIBIT C UNDERWRITING AGREEMENT................................ C-1
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
Section of
Trust Indenture
Act
of 1939, as Section of
amended Declaration
--------------- -----------
310(a)................................................... 5.3(a)
310(c)................................................... Inapplicable
311(c)................................................... Inapplicable
312(b)................................................... 2.2
313...................................................... 2.3
314(a)................................................... 2.4
314(b)................................................... Inapplicable
314(c)................................................... 2.5
314(d)................................................... Inapplicable
314(f)................................................... Inapplicable
315(a)................................................... 3.9(b)
315(c)................................................... 3.9(a)
315(d)................................................... 3.9(b)
316(a)................................................... 2.6, Annex I
316(c)................................................... 3.6(e)
- ------------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TARGETS TRUST III
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of , 1999, by the Trustees (as defined herein), the Sponsor (as
defined herein) and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established TARGETS TRUST III
(the "Trust"), under the Business Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of , 1999 (the "Original Declaration")
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on , 1999, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in the Forward Contract represented
by the Forward Contract Certificates and the Treasury Securities (each as
defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE> 7
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Indenture.
"Accelerated Maturity Payment" has the meaning specified in the
Indenture.
"Acceleration Event" has the meaning specified in Annex I hereto.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" has the meaning specified in Annex I.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York, are permitted or required
by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq. , as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the TARGETS and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the TARGETS. The initial Clearing
Agency shall be DTC.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 8
"Closing Date" means , 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
The "Company" means SSBH in its capacity as issuer of the Forward
Contract under the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Definitive TARGETS Certificates" has the meaning specified in
Section 9.4.
"Delaware Trustee" has the meaning specified in Section 5.1.
"Distribution" has the meaning specified in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning specified in Section
10.4(b).
"Forward Contract" means the Forward Contract with respect to the
Common Stock of to be issued by the Company under the Indenture.
3
<PAGE> 9
"Forward Contract Certificates" means the certificates (defined in
the Indenture as the "Securities") evidencing interests in the Forward Contract,
a specimen of which is attached hereto as Exhibit B.
"Global Certificate" has the meaning specified in Section 9.4.
"Holder" means a Person in whose name a Trust Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 1999, between the
Company and the Indenture Trustee with respect to the Forward Contract.
"Indenture Trustee" means The Chase Manhattan Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements specified in Section 5.3.
"Institutional Trustee Account" has the meaning specified in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in Annex I.
"Legal Action" has the meaning specified in Section 3.6(g).
"Majority of the Securities", "Majority of the TARGETS" or "Majority
of the Common Securities" means, as the context may require, except as provided
in the terms of the Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class, or Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
securities representing more than 50% of all outstanding beneficial interests in
the assets of the Trust by all Holders of Securities or Holders of the relevant
class of Securities, as the case may be.
"Maturity Date" has the meaning specified in the Indenture.
"Maturity Payment" has the meaning specified in the Indenture.
4
<PAGE> 10
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning specified in Annex I.
"Quarterly Distributions" has the meaning specified in Annex I.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
designated officers and who, in any case, has direct responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom
5
<PAGE> 11
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the TARGETS.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means SSBH or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"SSBH" means Salomon Smith Barney Holdings Inc., a Delaware
corporation, together with any successor entity in a merger, consolidation or
amalgamation.
"Successor Delaware Trustee" has the meaning specified in Section
5.6.
"Successor Entity" has the meaning specified in Section 3.15(b).
"Successor Institutional Trustee" has the meaning specified in
Section 5.6.
"Successor Securities" has the meaning specified in Section 3.15(b).
"Super Majority" has the meaning specified in Section 2.6(a)(ii).
"TARGETS" has the meaning specified in Section 7.1.
"TARGETS Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"TARGETS Certificate" means a definitive certificate in fully
registered form representing one or more TARGETS substantially in the form of
Exhibit A-1.
"TARGETS Guarantee" means the guarantee agreement dated as of ,
1999, of the Sponsor in respect of the TARGETS.
"Tax Event" has the meaning specified in Annex I.
"10% of the Securities" means, as the context may require, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class, Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
Securities representing 10% or more of the beneficial interests in the assets of
the
6
<PAGE> 12
Trust by all Holders of Securities or Holders of the relevant class of
Securities, as the case may be.
"Treasury Proceeds" has the meaning specified in Section 3.6(d).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" means the securities having the terms
specified in Schedule I hereto; any payments thereunder shall be made to the
Trust by 10:00 a.m. on the relevant date for Quarterly Distributions in respect
of the TARGETS.
"Trust Certificate" means a Common Security Certificate or a TARGETS
Certificate.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof and references herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
"Yield Enhancement Payments" has the meaning specified in the
Indenture.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
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(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the TARGETS such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Quarterly Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information, if any, as required by ss. 314 of the Trust Indenture Act and the
compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314 of the Trust Indenture
Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters specified in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Acceleration Events; Waiver.
(a) The Holders of a Majority of TARGETS may, by vote, on behalf of
the Holders of all of the TARGETS, waive any past Acceleration Event in respect
of the TARGETS and its consequences, provided that, if the underlying
Acceleration Event under the Indenture:
(i) is not waivable under the Indenture, the Acceleration Event
under this Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority (determined in accordance with the Indenture) of the outstanding
Forward Contract Certificates (a "Super Majority") affected thereby, only
the Holders of at least the same proportion of the TARGETS that the
relevant Super Majority represents of the aggregate outstanding beneficial
interests in the Forward Contract represented by all the TARGETS
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outstanding may waive such Acceleration Event in respect of the TARGETS
under this Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Acceleration Event with respect to the
TARGETS arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent or other
default or an Acceleration Event with respect to the TARGETS or impair any right
consequent thereon. Any waiver by the Holders of the TARGETS of an Acceleration
Event with respect to the TARGETS shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Acceleration Event with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority of the Common Securities may, by vote,
on behalf of the Holders of all of the Common Securities, waive any past
Acceleration Event with respect to the Common Securities and its consequences,
provided that, if the underlying Acceleration Event:
(i) is not waivable under the Indenture, the Acceleration Event
under the Declaration shall also not be waivable, except where the Holders
of the Common Securities are deemed to have waived such Acceleration Event
under the Declaration as provided in this Section 2.6(b); or
(ii) is waivable only with the consent of a Super Majority of the
Securities, only the Holders of at least the proportion of the Common
Securities that the relevant Super Majority represents of the aggregate
outstanding beneficial interests in the Forward Contract represented by
all the Common Securities outstanding may waive such Acceleration Event in
respect of the Common Securities under the Declaration, except where the
Holders of the Common Securities are deemed to have waived such
Acceleration Event under the Declaration as provided in this Section
2.6(b);
provided further, that each Holder of Common Securities will be deemed to have
waived any such Acceleration Event and all Acceleration Events with respect to
the Common Securities and their consequences until all Acceleration Events with
respect to the TARGETS have been cured, waived or otherwise eliminated, and
until such Acceleration Events with respect to the TARGETS have been so cured,
waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the TARGETS and only the Holders of
the TARGETS will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon the waiver of an Acceleration Event by
the Holders of a Majority of the
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Common Securities, any such default shall cease to exist and any Acceleration
Event with respect to the Common Securities arising therefrom shall be deemed to
have been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Acceleration Event with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Acceleration Event under the Indenture by the
Institutional Trustee at the direction of the Holders of the TARGETS,
constitutes a waiver of the corresponding Acceleration Event under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Acceleration Event; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Acceleration Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Acceleration Event as defined in the Indenture not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein) and (ii) any notice of default received
from the Indenture Trustee with respect to any Forward Contract Certificate
which notice from the Institutional Trustee to the Holders shall state that an
Acceleration Event under the Indenture also constitutes an Acceleration Event
with respect to the Securities; provided that, except for a default in the
payment of amounts due at maturity of any of the Trust Certificates, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration shall
have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "TARGETS Trust III", as such name may be modified
from time to time by the Regular Trustees following written notice to the
Delaware Trustee, the Institutional Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is 388 Greenwich
Street, New York, New York 10013. On ten Business Days written notice to the
Holders of Securities, the Delaware Trustee and the Institutional Trustee, the
Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities and use at least 85% of the proceeds from such sale to
purchase the Forward Contract Certificates and to use not more than 15% of such
proceeds to acquire the Treasury Securities, and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as
specified in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Forward
Contract Certificates, the Treasury Securities and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of TARGETS and no more than one series of Common Securities, and,
provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of the TARGETS and
the Common Securities on the Closing Date and any other date TARGETS are
sold pursuant to any overallotment option granted to any underwriters in
accordance with the terms of an underwriting agreement;
(b) in connection with the issue and sale of the TARGETS, at the
direction of the Sponsor, to:
(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, including a registration statement under Rule 415 or Rule
462(b) of the Securities Act, in each case prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the
TARGETS;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the TARGETS in any
jurisdiction in which the Sponsor has determined to qualify or
register such TARGETS for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Chicago Board Options Exchange, any other national
stock exchange or national securities market for listing upon notice
of issuance of any TARGETS;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the TARGETS under Section 12(b) of
the Exchange Act; and
(v) deliver an underwriting agreement providing for the sale
of the TARGETS;
(c) to enter into the Forward Contract and acquire the Forward
Contract Certificates and the Treasury Securities with the proceeds of the
sale of the TARGETS and the Common Securities and to take all actions and
perform such duties as may be required pursuant to the terms of the
Forward Contract Certificates and the Treasury Securities; provided,
however, that the Regular Trustees shall cause legal title to the Forward
Contract Certificates and the Treasury Securities to be held of record in
the name of the Institutional Trustee for the benefit of the Holders of
the Securities;
(d) upon an Acceleration Event, to (i) give the Sponsor and the
Institutional Trustee prompt written notice of the occurrence of such
Acceleration Event; and (ii) give written instructions to the
Institutional Trustee to (a) liquidate the Treasury Securities by
soliciting at least three all-cash bids (one of which may be from an
affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders, and (b) distribute the net
proceeds therefrom (the "Treasury Proceeds"), the
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Accelerated Maturity Payment to holders of the Trust Securities, provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to an Acceleration Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions and voting rights, and to issue relevant notices to the
Holders of Securities;
(f) to take all actions and perform such duties as may be required
pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles), managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the TARGETS or to enable the Trust to effect the purposes for which the
Trust was created;
(n) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in
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carrying out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
and
(ii) causing the Trust to be classified for United Suites
federal income tax purposes as a grantor trust;
provided that such action does not adversely affect the
interests of Holders;
(o) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(p) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers specified in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust
specified in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee specified in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Company.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Institutional
Trustee in its role as Institutional Trustee) shall not, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee in its
role as Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from the Forward
Contract Certificates and the Treasury Securities, but shall promptly
distribute all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) dispose of the Forward Contract Certificates prior to earlier
of the Maturity Date or an Accelerated Maturity Date or dispose of any of
the Treasury Securities prior to an Accelerated Maturity Date;
(iii) acquire any assets other than as expressly provided herein;
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(iv) possess Trust property for other than a Trust purpose;
(v) make any loans or incur any indebtedness;
(vi) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(viii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Institutional Trustee with respect to the Forward
Contract, the Forward Contract Certificates or the Treasury Securities,
(B) waive any past default that is waivable under the Forward Contract,
the Forward Contract Certificates or the Treasury Securities, (C) exercise
any right to rescind or annul any declaration that the Maturity Payment or
Accelerated Maturity Payment shall be due and payable in regard to the
Forward Contract Certificates or (D) consent to any amendment,
modification or termination of the Indenture or the Forward Contract
Certificates where such consent shall be required unless the Trust shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of such action,
the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Forward Contract Certificates and the
Treasury Securities shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities.
The right, title and interest of the Institutional Trustee to the Forward
Contract Certificates and the Treasury Securities shall vest automatically in
each Person who may hereafter be appointed as Institutional Trustee in
accordance with Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Forward
Contract Certificates or the Treasury Securities have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Forward Contract Certificates or the Treasury Securities to
the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee
does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Forward Contract Certificates and the Treasury Securities held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Securities from
the
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Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an account that is maintained with the Institutional Trustee in its
corporate trust department or with a banking institution the rating on
whose long-term unsecured indebtedness assigned by a "nationally
recognized statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least equal to
the rating assigned to unsubordinated indebtedness of SSBH by a nationally
recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to carry out the functions described in clause (i) above; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Accelerated Maturity Payment and the Treasury Proceeds
to Holders of Securities upon the occurrence of an Acceleration Event or
other specified circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Acceleration Event of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Forward Contract
Certificates under the Indenture and, if an Acceleration Event actually known to
a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as a holder of Forward Contract Certificates subject to the
rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
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(h) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of the Treasury Securities
and the Institutional Trustee shall, for the benefit of the Holders of the
Securities, enforce its rights as a holder of the Treasury Securities subject to
the rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
(i) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions on behalf of the Trust with
respect to all Securities and any such Paying Agent shall comply with ss. 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Institutional
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees specified in Section 3.6.
The Institutional Trustee must exercise the powers specified in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any
Acceleration Event and after the curing of all Acceleration Events that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Acceleration Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Acceleration Event and after the
curing or waiving of all such Acceleration Events that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority of the
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Forward Contract
Certificates, the Treasury Securities and the Institutional Trustee
Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Forward Contract, the Forward Contract Certificates, the Treasury
Securities or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor;
(ix) the granting of any right to the Institutional Trustee
hereunder shall not be deemed to impose on the Institutional Trustee an
obligation to exercise such rights subject to Section 3.09(b)(x);
(x) the Institutional Trustee shall not be obligated to exercise any
remedy or take any action hereunder unless directed to do so by the
Holders of a Majority of the Securities and shall have no liability for
its failure to act pending receipt of any such direction.
This Section 3.9 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction, request, certification, order or act of the
Sponsor or the Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate and any Resolution of
the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete
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authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Acceleration Event, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion of Securities as would be entitled to
direct the Institutional Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action
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until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as specified in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, either Regular Trustee or, if there is only one, such Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for five (5) years from the Closing Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the TARGETS and the Common
Securities (together, the "Successor Securities") so long as such
series of Successor Securities ranks the same as the series of
Securities for which it is substituted ranks with respect to
Distributions and payments upon liquidation and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional
Trustee as the Holder of the Forward Contract Certificates and the
Treasury Securities;
(iii) any Successor Securities to the TARGETS are listed, or any
Successor Securities to the TARGETS will be listed upon notification of
issuance, on any national securities exchange or with any organization on
which the TARGETS are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the TARGETS (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
will not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the TARGETS Guarantee.
(c) Notwithstanding Section 3.l5(b), the Trust shall not, without
the consent of Holders of all of the Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if in the opinion of
a nationally recognized independent tax counsel experienced in such matters,
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to at least 3% of the capital
of the Trust, at the same time as the TARGETS are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the TARGETS, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form,
including a registration statement under Rule 415 or Rule 462(b) of the
Securities Act, including any pre-effective or post-
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effective amendments thereto, relating to the registration under the
Securities Act of the TARGETS;
(b) to determine the jurisdictions in which to take appropriate
action to qualify or register for sale all or part of the TARGETS and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such jurisdictions;
(c) to prepare for filing by the Trust an application to the Chicago
Board Options Exchange, any other national stock exchange or national
securities exchange for listing upon notice of issuance of any TARGETS;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
TARGETS under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of an underwriting agreement or
agreements providing for the sale of the TARGETS.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority of the
Common Securities voting as a class at a meeting of the Holders of the
Common Securities or by written consent of such holders in lieu of a
meeting,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, shall be an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
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SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall
be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as specified in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-5 and to the extent Rule 3a-5 requires
a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Institutional Trustee shall possess those
qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect specified in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
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(d) The TARGETS Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as specified in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Michael J. Day
Charles W. Scharf
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
The initial Institutional Trustee shall be:
The Chase Manhattan Bank
(b) Except as expressly specified in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee; and
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities, by vote of the Holders of
a Majority of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities or by written consent of such holders in
lieu of a meeting.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Institutional Trustee under
Section 5.3 (a "Successor Institutional Trustee") has been appointed and
has accepted such appointment by written instrument executed by such
Successor Institutional Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days
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after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Institutional Trustee or Delaware Trustee, as applicable, may petition
any court of competent jurisdiction for appointment of a Successor Institutional
Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.
(f) No Institutional Trustee or Delaware Trustee shall be Liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority
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of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. In
the event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as specified herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the TARGETS and the Common Securities in accordance with the preferences
specified in their respective terms. If and to the extent that (i) the Company
makes a payment in respect of the Forward Contract Certificates held by the
Institutional Trustee or (ii) the issuer of the Treasury Securities makes a
payment in respect of the Treasury Securities held by the Institutional Trustee
(the amount of any such payments described in the foregoing clauses (i) and (ii)
is referred to herein as a "Payment Amount"), the Institutional Trustee shall be
and is directed to make a distribution (a "Distribution") of the Payment Amount
to the Holders on a Pro Rata basis.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue (i)
one class of securities, known as the Targeted Growth Enhanced Terms
Securities(R) ("TARGETS") representing undivided beneficial interests in the
assets of the Trust having such terms as are specified in Annex I and (ii) one
class of common securities (the "Common Securities") representing undivided
beneficial interests in the assets of the Trust having such terms as are
specified in Annex I. The Trust shall issue no securities or other interests in
the assets of the Trust other than the TARGETS and the Common Securities.
(b) The Trust Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Trust Certificates so signed shall be delivered by the Trust,
such Trust Certificates nevertheless may be delivered as though the person who
signed such Trust Certificates had not ceased to be such Regular Trustee; and
any Trust Certificate may be signed on behalf of the Trust by any person who, at
the actual date of execution of such Security, shall be a Regular Trustee of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not a Regular Trustee. Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable.
(e) Every Person, by virtue of having become a Holder or a TARGETS
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.
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ARTICLE VIlI
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor, the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Acceleration Event
pursuant to which the Trust is dissolved in accordance with the terms of
the Securities and the Accelerated Maturity Payment and the Treasury
Proceeds shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(v) upon distribution to the Holders of the Maturity Payment and the
final payment due in respect of the Treasury Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust specified in
Section 3.14; provided that so long as any TARGETS are outstanding and are
not held entirely by SSBH or an affiliate or related party, the Trust may
not voluntarily liquidate, dissolve, wind-up or terminate except in
connection with the occurrence of an Acceleration Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1 (a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions specified in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, TARGETS shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would fail to be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Trust Certificates.
The Regular Trustees shall provide for the registration of Trust
Certificates and of transfers of Trust Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges that may
be imposed in relation to it. The Regular Trustees hereby appoint the
Institutional Trustee the transfer agent for Trust Certificates. Upon surrender
for registration of transfer of any Trust Certificate, the Regular Trustees
shall cause one or more new Trust Certificates to be issued in the name of the
designated transferee or transferees. Every Trust Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Trust
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees. A transferee of a Trust Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Trust Certificate. By acceptance of a Trust Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Trust
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Trust Certificate and of the Securities represented by such
Trust Certificate for purposes of receiving Distributions and
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for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Trust Certificate
or in the Securities represented by such Trust Certificate on the part of any
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the TARGETS, the TARGETS
Certificates, on original issuance, will be issued in the form of one or more,
fully registered, global certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no TARGETS
Beneficial Owner will receive a definitive TARGETS Certificate representing such
TARGETS Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered TARGETS
Certificates (the "Definitive TARGETS Certificates") have been issued to the
TARGETS Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the TARGETS and
the sole holder of the Global Certificates and shall have no obligation to
the TARGETS Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the TARGETS Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such TARGETS Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and the Clearing
Agency shall receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. The Clearing Agency
will make book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the TARGETS Holders is
required under this Declaration, unless and until Definitive TARGETS
Certificates shall have been issued to the TARGETS Beneficial Owners pursuant to
Section 9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the TARGETS Holders to the Clearing Agency, and
upon doing so shall have no obligations to give any additional notice to the
TARGETS Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS, the Regular Trustees may, in
their sole discretion, appoint a successor Clearing Agency with respect to such
TARGETS.
SECTION 9.7 Definitive TARGETS Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the TARGETS;
then:
(x) Definitive TARGETS Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such TARGETS; and
(y) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions , the Regular Trustees shall
cause Definitive TARGETS Certificates to be delivered to TARGETS Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive TARGETS
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which TARGETS may be listed, or to conform
to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If:
(a) any mutilated Trust Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Trust
Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
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then, in the absence of notice that such Trust Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
denomination. In connection with the issuance of any new Trust Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly specified in this Declaration, the TARGETS
Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which return shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the TARGETS shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
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(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a)(i) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
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(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct
specified in paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Company if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees,
(ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Regular Trustees, counsel
or the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or TARGETS Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Company
or TARGETS Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Company and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
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(vii) The Company may purchase and maintain insurance on behalf of
any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Company agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as specified in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have
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the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with United States generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, to the extent, if any, required by the Trust
Indenture Act, within 180 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Forward Contract Certificates or the Treasury Securities held
by the Institutional Trustee shall be made directly to the Institutional Trustee
Account and no other funds of the Trust shall be deposited in the Institutional
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made to any Holder, the Trust may reduce subsequent
Distributions to such Holder by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
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(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) if such proposed amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, an
opinion of counsel (who may be counsel to the Sponsor or the Trust
and which opinion shall be prepared at the expense of the Sponsor)
that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and
(ii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be specified in the terms of such
Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article
V to increase or decrease the number of and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority of the Common
Securities.
(g) Subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of the Declaration to
such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the TARGETS are
listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities
representing at least 10% of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more notices in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage specified in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange or national securities
market on which the TARGETS are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning
not less than the minimum amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot
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submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange or national securities market on which the TARGETS are then
listed or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail postage prepaid, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address specified below (or such other address as the Trust may
give notice of to the Holders of the Securities):
388 Greenwich Street
New York, New York 10013
(b) if given to the Delaware Trustee, at the mailing address
specified below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
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1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at the mailing address
specified below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor specified below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
388 Greenwich Street
New York, New York 10013
(e) if given to any other Holder, at the address specified on the
books and records of the Trust.
All notices provided for in this Declaration shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
45
<PAGE> 51
SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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<PAGE> 52
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
-----------------------------------------
Michael J. Day, as Regular Trustee
-----------------------------------------
Charles W. Scharf, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Institutional Trustee
By:
-------------------------------------
Name:
Title:
SALOMON SMITH BARNEY HOLDINGS INC.
as Sponsor
By:
-------------------------------------
Name:
Title:
<PAGE> 53
SCHEDULE I
TREASURY SECURITIES
All forms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
<TABLE>
<CAPTION>
Par Zero-Coupon Strip Rate Price Cost
- --- ----------------- ---- ----- ----
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 54
ANNEX I
TERMS OF
THE TARGETS
AND
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 1999 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the TARGETS and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
specified in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. Designation and Number.
(a) TARGETS. Securities of the Trust are hereby designated for
the purposes of identification only as "Targeted Growth Enhanced Terms
Securities" (the "TARGETS"). The certificates evidencing the TARGETS shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange or
national securities market on which the TARGETS are listed.
(b) Common Securities. Securities of the Trust are hereby
designated for the purposes of identification only as "Trust Common Securities"
(the "Common Securities" and, together with the TARGETS, the "Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be a Pro Rata
portion of (i) all monies received by the Trust (a) as quarterly distributions
in respect of the Treasury Securities and (b) as Yield Enhancement Payments, if
any, with respect to the Forward Contract (together, the "Quarterly
Distributions"), (ii) the Maturity Payment or the Accelerated Maturity Payment,
as the case may be, with respect to the Forward Contract and (iii) upon the sale
of the Treasury Securities by the Institutional Trustee following an
Acceleration Event, the net proceeds received by the Trust (the "Treasury
Proceeds") from the sale of such Treasury Securities. A Distribution is payable
only to the extent that monies are received in respect of the Forward Contract
Certificates or Treasury Securities held by the Institutional Trustee on behalf
of the Trust and to the extent the Trust has funds available therefor.
(b) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record
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dates. While the TARGETS remain in book-entry only form, the relevant record
dates for Distributions of the Maturity Payment or Accelerated Maturity Payment
shall be one Business Day prior to the date such Maturity Payment or Accelerated
Maturity Payment, as the case may be, is received by the Trust with respect to
the Forward Contract Certificates. While the TARGETS remain in book-entry only
form, the relevant record dates for Quarterly Distributions shall be one
Business Day prior to the relevant payment dates, which payment dates shall
correspond to the dates on which payments are made in respect of, and in
accordance with the terms of, the Treasury Securities and the Forward Contract
Certificates. While the TARGETS remain in book-entry only form, the relevant
record date for Distributions of the Treasury Proceeds shall be the date that is
one Business Day prior to the date such Treasury Proceeds are received by the
Trust upon liquidation of the Treasury Securities. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the TARGETS will be made as described under the heading "Description
of the TARGETS -- Book-Entry Only Issuance" in the Prospectus dated ,
1999 (the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust with respect to the TARGETS. The relevant
record dates for the Common Securities shall be the same record dates as for the
TARGETS. If the TARGETS shall not continue to remain in book-entry only form,
the relevant record dates for any Distributions shall conform to the rules of
any securities exchange or national securities market on which they are listed
and, if none, shall be 15 days before the relevant payment dates, which payment
dates shall correspond to the dates on which payments are made in respect of,
and in accordance with the terms of, the Treasury Securities and the Forward
Contract Certificates and which record date shall be confirmed by the Regular
Trustees in writing to the Institutional Trustee. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of either the Company having failed to make a payment under the Forward
Contract or the issuer of the Treasury Securities having failed to make a
payment in respect of the Treasury Securities, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on a special record date which shall be the
date on which the amount of the defaulted Distributions are actually received by
the Trust. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
Except as otherwise provided herein, in the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the Holders
of the Securities on the date of the dissolution, winding-up or termination, as
the case may be, will be entitled to receive
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<PAGE> 56
distributions out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors of the
Trust, on a Pro Rata basis.
4. Distribution Upon an Acceleration Event.
(a) If, at any time, a Tax Event, an Investment Company Event or a
Bankruptcy Event (each as defined herein and each an "Acceleration Event") shall
occur and be continuing, the Regular Trustees shall give written instructions to
the Institutional Trustee to (a) dissolve the Trust, liquidate the Treasury
Securities by soliciting at least three all cash bids (one of which may be from
an affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders and, (b) after satisfaction of
creditors, cause to be distributed as soon as is practicable following the
occurrence of such Acceleration Event, to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, of (i)
the Accelerated Maturity Payment and (ii) the Treasury Proceeds.
"Tax Event" means that SSBH shall have requested and received and
shall have delivered to the Regular Trustees an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that there has
been (a) an amendment to, change in or announced proposed change in the laws (or
any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of SSBH or
any of its subsidiaries, or the Trust, or a threatened challenge asserted in
writing against any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Forward Contract
Certificates or the TARGETS, which amendment or change is adopted or which
proposed change, decision or pronouncement is announced or which action,
clarification or challenge occurs on or after the date of the Prospectus
relating to the original issuance of the TARGETS (collectively a "Tax Action"),
which Tax Action relates to any of the items described in (i) and (ii) below,
and that there is more than an insubstantial risk that (i) the Trust is, or will
be, subject to United States federal income tax with respect to income accrued
or received in respect of the Forward Contract or the Treasury Securities, or
(ii) the Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means that SSBH shall have requested and
received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent legal counsel experienced in such matters to
the effect that as a result of the occurrence on or after the date hereof of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
I-3
<PAGE> 57
"Bankruptcy Event" means either of the following shall have
occurred: (i) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or (ii) the commencement by the Company of a voluntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action.
On and from the date fixed by the Regular Trustees for any
dissolution and distribution pursuant to this paragraph 4: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the TARGETS,
will receive its Pro Rata portion of (a) the Accelerated Maturity Payment and
(b) the Treasury Proceeds, in each case to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing TARGETS held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent the right to receive a Pro
Rata portion of (a) the Accelerated Maturity Payment and (b) the Treasury
Proceeds.
(b) Acceleration Event Distribution procedures will be as follows:
(i) Notice of any Acceleration Event (each, an "Acceleration
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Securities as promptly as practicable following the
occurrence of such Acceleration Event. Each Acceleration Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust.
(ii) If an Acceleration Event occurs, then (A) while the TARGETS are
in book-entry only form, with respect to the TARGETS, by 12:00 noon, New
York City time, on the Accelerated Maturity Date, provided that the
Company has paid the Institutional Trustee by 10:00 a.m. on such date an
amount of cash equal to the Accelerated Maturity Payment, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the Pro
Rata portion of the sum of the Accelerated Maturity Payment and the
Treasury Proceeds applicable to the TARGETS and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay
such Pro Rata portion of the sum of the Accelerated Maturity Payment and
the Treasury Proceeds to the Holders of the TARGETS, and (B) with respect
to TARGETS issued in definitive form and Common
I-4
<PAGE> 58
Securities, provided that the Company has paid the Institutional Trustee
by 10:00 a.m. on such date an amount of cash equal to the Pro Rata amount
of the Accelerated Maturity Payment applicable to such TARGETS issued in
definitive form and Common Securities, the Institutional Trustee will pay
such Pro Rata portion of the Accelerated Maturity Payment and a Pro Rata
portion of the Treasury Proceeds to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the relevant record date. If any Accelerated
Maturity Date is not a Business Day, then payment of the sum of the
Accelerated Maturity Payment and the Treasury Proceeds payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such Accelerated Maturity Date.
(iii) Acceleration Notices shall be sent by the Regular Trustees on
behalf of the Trust to (A) in respect of the TARGETS, DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global TARGETS
Certificates have been issued or, if Definitive TARGETS Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may at any time and from time to time purchase outstanding
TARGETS by tender, in the open market or by private agreement.
5. Voting Rights - TARGETS.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the TARGETS will have no
voting rights.
(b) Subject to the requirements specified in this paragraph, the
Holders of a Majority of the TARGETS, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or direct the exercise of any trust or
power conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee, as holder of the Forward Contract
Certificates and the Treasury Securities, to (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercise any trust or power conferred on the Indenture Trustee with
respect to the Forward Contract Certificates, (ii) direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or exercise any trust or power conferred on the Institutional Trustee
with respect to the Treasury Securities, (iii) waive the consequences of any
Acceleration Event under the Indenture that are waivable under the Indenture,
(iv) exercise any right to rescind or annul a declaration that the Accelerated
Maturity Payment shall be due and payable, or (v) consent to any amendment,
modification or termination of the Indenture or the Forward Contract where such
consent shall be required, provided, however, that where a consent or action
would require the
I-5
<PAGE> 59
consent or act of Holders of more than a majority (determined in accordance with
the Indenture) of the outstanding Forward Contract Certificates (a "Super
Majority"), such consent or action shall not be effective until Holders of at
least the proportion of the TARGETS that the relevant Super Majority represents
of the aggregate beneficial interests in the Forward Contract represented by all
the TARGETS outstanding shall have consented to such action or provided such
consent. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Forward Contract Certificates and the Treasury Securities, shall
not take any of the actions described in clauses (i), (ii), (iii), (iv) or (v)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If the Institutional Trustee fails to enforce its rights under the
Forward Contract, any Holder of TARGETS may directly institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Forward Contract without first instituting a legal proceeding against
the Institutional Trustee or any other Person or entity. If the Company fails to
pay amounts owed on the Forward Contract on the date such amounts are otherwise
payable, then a Holder of TARGETS may also directly institute a proceeding for
enforcement of payment to such Holder (a "Direct Action") of the amounts owed in
respect of such Holder's Pro Rata interest in the Forward Contract on or after
the due date specified in the Forward Contract without first (i) directing the
Institutional Trustee to enforce the terms of the Forward Contract or (ii)
instituting a legal proceeding directly against the Company to enforce the
Institutional Trustee's rights under the Forward Contract. Except as provided in
the preceding sentence, the Holders of TARGETS will not be able to exercise
directly any other remedy available to the Holders of the Forward Contract
Certificates. In connection with such Direct Action, SSBH will be subrogated to
the rights of such Holder of TARGETS under the Declaration to the extent of any
payment made by SSBH to such Holder of TARGETS in such Direct Action.
Any required approval or direction of Holders of TARGETS may be
given at a separate meeting of Holders of TARGETS convened for such purpose, at
a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
TARGETS are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
TARGETS. Each such notice will include a statement setting forth (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the TARGETS will be required
for the Trust to (i) cancel TARGETS Certificates, (ii) to make Distributions or
(iii) to distribute any Quarterly Distributions, the Maturity Payment, the
Accelerated Maturity Payment and the Treasury Proceeds held by the Institutional
Trustee, in each case in accordance with the Declaration and the terms of the
Securities.
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Notwithstanding that Holders of TARGETS are entitled to vote or
consent under any of the circumstances described above, any of the TARGETS that
are owned by the Sponsor or any of its Affiliates shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Acceleration Event with respect to the TARGETS has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority of the Common Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Forward Contract Certificates and the Treasury
Securities, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred on the Institutional Trustee with respect to the
Forward Contract, (ii) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee with respect to
the Treasury Securities, (iii) waive the consequences of any Acceleration Event
under the Indenture that are waivable under the Indenture, (iv) exercise any
right to rescind or annul a declaration that the Accelerated Maturity Payment
shall be due and payable or (v) consent to any amendment, modification or
termination of the Indenture or Forward Contract Certificates where such consent
shall be required, provided that where a consent or action under the Indenture
would require the consent or act of the Holders of a Super Majority of the
Forward Contract Certificates, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion of the Common Securities that the relevant Super Majority
represents of the aggregate beneficial interests in the Forward Contract
represented by all the Common Securities outstanding. Pursuant to this paragraph
6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the Indenture Trustee as
specified above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the
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Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to (i) cancel Common Securities, (ii) to make
Distributions, (iii) to liquidate the Treasury Securities or (iv) to distribute
any Quarterly Distribution, the Maturity Payment, the Accelerated Maturity
Payment or the Treasury Proceeds to Holders of the Securities, in each case in
accordance with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the TARGETS or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority of such
class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Forward Contract Certificates is required under the Indenture with
respect to any amendment, modification or termination of the Indenture or the
Forward Contract Certificates, the Institutional Trustee shall request the
written direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority of the
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of the holders of a Super
Majority of the Forward Contract Certificates, the Institutional Trustee may
only give such consent at the direction of the Holders of a Super
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Majority of the Securities outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this paragraph 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean proportionately to each
Holder of Securities according to the aggregate beneficial interests in the
assets of the Trust represented by the Securities held by the relevant Holder in
relation to the aggregate beneficial interests in the assets of the Trust
represented by all Securities outstanding unless, in relation to a payment, an
Acceleration Event under the Declaration has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the TARGETS proportionately according to the aggregate beneficial
interests in the assets of the Trust represented by the TARGETS held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all TARGETS outstanding, and only after satisfaction of
all amounts owed to the Holders of the TARGETS, to each Holder of Common
Securities proportionately according to the aggregate beneficial interests in
the assets of the Trust represented by the Common Securities held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all Common Securities outstanding.
9. Ranking.
The TARGETS rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Acceleration Event occurs
and is continuing in respect of the Forward Contract Certificates held by the
Institutional Trustee, no payments in respect of Distributions on, or payments
upon liquidation or otherwise with respect to, the Common Securities shall be
made until the Holders of TARGETS shall be paid in full the Distributions and
payments upon liquidation or otherwise to which they are entitled at the time.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
TARGETS to be listed on the .
11. Acceptance of Securities Guarantee, the Indenture and the
Treasury Securities.
Each Holder of TARGETS and Common Securities, by the acceptance
thereof, agrees to the provisions of the TARGETS Guarantee, and to the
provisions of the Indenture and the Treasury Securities.
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12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge on written request to the
Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF TARGETS(R) CERTIFICATE
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE DECLARATION AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Securities
1
CUSIP NO.
Certificate Evidencing Securities
of
TARGETS Trust III
Targeted Growth Enhanced Terms Securities
TARGETS TRUST III, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of ( ) securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Targeted Growth Enhanced Terms Securities (the "TARGETS"). The
TARGETS are transferable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper
A1-1
<PAGE> 65
form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the TARGETS are specified in, and
this certificate and the TARGETS represented hereby are issued and shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of , 1999, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the TARGETS as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the TARGETS Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the TARGETS Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the TARGETS as a beneficial interest in a
pro rata portion of (i) the Treasury Securities and (ii) a cash settled forward
purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
-------------------------------------
Michael J. Day, as Regular Trustee
-------------------------------------
Charles W. Scharf, as Regular Trustee
A1-2
<PAGE> 66
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this TARGETS
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________________________
_____________________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ____________________________
Signature: _______________________
(Sign exactly as your name appears on the other side of this TARGETS
Certificate)
A1-3
<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SPECIFIED IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Securities
C-1
Certificate Evidencing Securities
of
TARGETS Trust III
Trust Common Securities
TARGETS TRUST III, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Salomon Smith
Barney Holdings Inc., a Delaware corporation (the "Holder"), is the registered
owner of common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the Trust Common Securities (the
"Common Securities"). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney upon surrender
of this certificate duly endorsed and in proper form for transfer and
satisfaction of the other conditions specified in the Declaration (as defined
below), including, without limitation, Section 9.1 thereof. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of , 1999, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the Common Securities
Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the Common Securities as a beneficial
interest in a pro rata portion of (i) the Treasury Securities and (ii) a cash
settled forward purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
--------------------------------------
Michael J. Day, as Regular Trustee
--------------------------------------
Charles W. Scharf, as Regular Trustee
A2-1
<PAGE> 68
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________ agent to transfer this TARGETS Certificate on
the books of the Trust. The agent may substitute another to act for him or
her.
Date: _____________________________
Signature: ________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-2
<PAGE> 69
EXHIBIT B
SPECIMEN OF FORWARD CONTRACT CERTIFICATE
B-1
<PAGE> 70
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4(h)
======================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
TARGETS TRUST IV
Dated as of , 1999
======================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................7
SECTION 2.2 Lists of Holders of Securities...................................8
SECTION 2.3 Reports by the Institutional Trustee.............................8
SECTION 2.4 Quarterly Reports to Institutional Trustee.......................8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................8
SECTION 2.6 Acceleration Events; Waiver......................................8
SECTION 2.7 Acceleration Event; Notice......................................10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name............................................................10
SECTION 3.2 Office..........................................................11
SECTION 3.3 Purpose.........................................................11
SECTION 3.4 Authority.......................................................11
SECTION 3.5 Title to Property of the Trust..................................11
SECTION 3.6 Powers and Duties of the Regular Trustees.......................11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............14
SECTION 3.8 Powers and Duties of the Institutional Trustee..................15
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee....................................................17
SECTION 3.10 Certain Rights of Institutional Trustee........................19
SECTION 3.11 Delaware Trustee...............................................21
SECTION 3.12 Execution of Documents.........................................21
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........21
SECTION 3.14 Duration of Trust..............................................21
SECTION 3.15 Mergers........................................................22
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.........................23
SECTION 4.2 Responsibilities of the Sponsor.................................23
i
<PAGE> 3
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..............................................24
SECTION 5.2 Delaware Trustee................................................25
SECTION 5.3 Institutional Trustee; Eligibility..............................25
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally..................................................26
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.........26
SECTION 5.6 Appointment, Removal and Resignation of Trustees................26
SECTION 5.7 Vacancies among Trustees........................................28
SECTION 5.8 Effect of Vacancies.............................................28
SECTION 5.9 Meetings........................................................28
SECTION 5.10 Delegation of Power............................................29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business...................................................29
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions...................................................29
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.........................30
ARTICLE VIlI
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust............................................31
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..........................................32
SECTION 9.2 Transfer of Trust Certificates..................................32
SECTION 9.3 Deemed Security Holders.........................................32
SECTION 9.4 Book-Entry Interests............................................33
SECTION 9.5 Notices to Clearing Agency......................................33
SECTION 9.6 Appointment of Successor Clearing Agency........................34
SECTION 9.7 Definitive TARGETS Certificates.................................34
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.........34
ii
<PAGE> 4
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.1 Liability......................................................35
SECTION 10.2 Exculpation....................................................35
SECTION 10.3 Fiduciary Duty.................................................36
SECTION 10.4 Indemnification................................................37
SECTION 10.5 Outside Businesses.............................................39
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year....................................................40
SECTION 11.2 Certain Accounting Matters.....................................40
SECTION 11.3 Banking........................................................41
SECTION 11.4 Withholding....................................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.....................................................41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................43
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices........................................................44
SECTION 13.2 Governing Law..................................................45
SECTION 13.3 Intention of the Parties.......................................45
SECTION 13.4 Headings.......................................................45
SECTION 13.5 Successors and Assigns.........................................46
SECTION 13.6 Partial Enforceability.........................................46
SECTION 13.7 Counterparts...................................................46
ANNEX I TERMS OF SECURITIES.................................. I-1
EXHIBIT A-1 FORM OF TARGETS CERTIFICATE.......................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.................. A2-1
EXHIBIT B SPECIMEN OF FORWARD CONTRACT CERTIFICATE............. B-1
EXHIBIT C UNDERWRITING AGREEMENT............................... C-1
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a)................................................... 5.3(a)
310(c)................................................... Inapplicable
311(c)................................................... Inapplicable
312(b)................................................... 2.2
313...................................................... 2.3
314(a)................................................... 2.4
314(b)................................................... Inapplicable
314(c)................................................... 2.5
314(d)................................................... Inapplicable
314(f)................................................... Inapplicable
315(a)................................................... 3.9(b)
315(c)................................................... 3.9(a)
315(d)................................................... 3.9(b)
316(a)................................................... 2.6, Annex I
316(c)................................................... 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TARGETS TRUST IV
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of , 1999, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established TARGETS TRUST IV (the
"Trust"), under the Business Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of , 1999 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on , 1999, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in the
Forward Contract represented by the Forward Contract Certificates and the
Treasury Securities (each as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE> 7
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Indenture.
"Accelerated Maturity Payment" has the meaning specified in the
Indenture.
"Acceleration Event" has the meaning specified in Annex I hereto.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" has the meaning specified in Annex I.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York, are permitted or required
by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq. , as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the TARGETS and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the TARGETS. The initial Clearing
Agency shall be DTC.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 8
"Closing Date" means , 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
The "Company" means SSBH in its capacity as issuer of the Forward
Contract under the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Definitive TARGETS Certificates" has the meaning specified in
Section 9.4.
"Delaware Trustee" has the meaning specified in Section 5.1.
"Distribution" has the meaning specified in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning specified in Section
10.4(b).
"Forward Contract" means the Forward Contract with respect to the
Common Stock of to be issued by the Company under the Indenture.
3
<PAGE> 9
"Forward Contract Certificates" means the certificates (defined in
the Indenture as the "Securities") evidencing interests in the Forward Contract,
a specimen of which is attached hereto as Exhibit B.
"Global Certificate" has the meaning specified in Section 9.4.
"Holder" means a Person in whose name a Trust Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 1999, between
the Company and the Indenture Trustee with respect to the Forward Contract.
"Indenture Trustee" means The Chase Manhattan Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements specified in Section 5.3.
"Institutional Trustee Account" has the meaning specified in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in Annex I.
"Legal Action" has the meaning specified in Section 3.6(g).
"Majority of the Securities", "Majority of the TARGETS" or "Majority
of the Common Securities" means, as the context may require, except as provided
in the terms of the Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class, or Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
securities representing more than 50% of all outstanding beneficial interests in
the assets of the Trust by all Holders of Securities or Holders of the relevant
class of Securities, as the case may be.
"Maturity Date" has the meaning specified in the Indenture.
"Maturity Payment" has the meaning specified in the Indenture.
4
<PAGE> 10
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning specified in Annex I.
"Quarterly Distributions" has the meaning specified in Annex I.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
designated officers and who, in any case, has direct responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom
5
<PAGE> 11
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the TARGETS.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means SSBH or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"SSBH" means Salomon Smith Barney Holdings Inc., a Delaware
corporation, together with any successor entity in a merger, consolidation or
amalgamation.
"Successor Delaware Trustee" has the meaning specified in Section
5.6.
"Successor Entity" has the meaning specified in Section 3.15(b).
"Successor Institutional Trustee" has the meaning specified in
Section 5.6.
"Successor Securities" has the meaning specified in Section 3.15(b).
"Super Majority" has the meaning specified in Section 2.6(a)(ii).
"TARGETS" has the meaning specified in Section 7.1.
"TARGETS Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"TARGETS Certificate" means a definitive certificate in fully
registered form representing one or more TARGETS substantially in the form of
Exhibit A-1.
"TARGETS Guarantee" means the guarantee agreement dated as
of , 1999, of the Sponsor in respect of the TARGETS.
"Tax Event" has the meaning specified in Annex I.
"10% of the Securities" means, as the context may require, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class, Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
Securities representing 10% or more of the beneficial interests in the assets of
the
6
<PAGE> 12
Trust by all Holders of Securities or Holders of the relevant class of
Securities, as the case may be.
"Treasury Proceeds" has the meaning specified in Section 3.6(d).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" means the securities having the terms
specified in Schedule I hereto; any payments thereunder shall be made to the
Trust by 10:00 a.m. on the relevant date for Quarterly Distributions in respect
of the TARGETS.
"Trust Certificate" means a Common Security Certificate or a TARGETS
Certificate.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof and references herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
"Yield Enhancement Payments" has the meaning specified in the
Indenture.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
7
<PAGE> 13
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the TARGETS such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Quarterly Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information, if any, as required by ss. 314 of the Trust Indenture Act and the
compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314 of the Trust Indenture
Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters specified in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Acceleration Events; Waiver.
(a) The Holders of a Majority of TARGETS may, by vote, on behalf of
the Holders of all of the TARGETS, waive any past Acceleration Event in respect
of the TARGETS and its consequences, provided that, if the underlying
Acceleration Event under the Indenture:
(i) is not waivable under the Indenture, the Acceleration Event
under this Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority (determined in accordance with the Indenture) of the outstanding
Forward Contract Certificates (a "Super Majority") affected thereby, only
the Holders of at least the same proportion of the TARGETS that the
relevant Super Majority represents of the aggregate outstanding beneficial
interests in the Forward Contract represented by all the TARGETS
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outstanding may waive such Acceleration Event in respect of the TARGETS
under this Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Acceleration Event with respect to the
TARGETS arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent or other
default or an Acceleration Event with respect to the TARGETS or impair any right
consequent thereon. Any waiver by the Holders of the TARGETS of an Acceleration
Event with respect to the TARGETS shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Acceleration Event with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority of the Common Securities may, by vote,
on behalf of the Holders of all of the Common Securities, waive any past
Acceleration Event with respect to the Common Securities and its consequences,
provided that, if the underlying Acceleration Event:
(i) is not waivable under the Indenture, the Acceleration Event
under the Declaration shall also not be waivable, except where the Holders
of the Common Securities are deemed to have waived such Acceleration Event
under the Declaration as provided in this Section 2.6(b); or
(ii) is waivable only with the consent of a Super Majority of the
Securities, only the Holders of at least the proportion of the Common
Securities that the relevant Super Majority represents of the aggregate
outstanding beneficial interests in the Forward Contract represented by
all the Common Securities outstanding may waive such Acceleration Event in
respect of the Common Securities under the Declaration, except where the
Holders of the Common Securities are deemed to have waived such
Acceleration Event under the Declaration as provided in this Section
2.6(b);
provided further, that each Holder of Common Securities will be deemed to have
waived any such Acceleration Event and all Acceleration Events with respect to
the Common Securities and their consequences until all Acceleration Events with
respect to the TARGETS have been cured, waived or otherwise eliminated, and
until such Acceleration Events with respect to the TARGETS have been so cured,
waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the TARGETS and only the Holders of
the TARGETS will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon the waiver of an Acceleration Event by
the Holders of a Majority of the
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Common Securities, any such default shall cease to exist and any Acceleration
Event with respect to the Common Securities arising therefrom shall be deemed to
have been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Acceleration Event with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Acceleration Event under the Indenture by the
Institutional Trustee at the direction of the Holders of the TARGETS,
constitutes a waiver of the corresponding Acceleration Event under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Acceleration Event; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Acceleration Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Acceleration Event as defined in the Indenture not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein) and (ii) any notice of default received
from the Indenture Trustee with respect to any Forward Contract Certificate
which notice from the Institutional Trustee to the Holders shall state that an
Acceleration Event under the Indenture also constitutes an Acceleration Event
with respect to the Securities; provided that, except for a default in the
payment of amounts due at maturity of any of the Trust Certificates, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration shall
have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "TARGETS Trust IV", as such name may be modified
from time to time by the Regular Trustees following written notice to the
Delaware Trustee, the Institutional Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is 388 Greenwich
Street, New York, New York 10013. On ten Business Days written notice to the
Holders of Securities, the Delaware Trustee and the Institutional Trustee, the
Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities and use at least 85% of the proceeds from such sale to
purchase the Forward Contract Certificates and to use not more than 15% of such
proceeds to acquire the Treasury Securities, and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as
specified in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Forward
Contract Certificates, the Treasury Securities and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of TARGETS and no more than one series of Common Securities, and,
provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of the TARGETS and
the Common Securities on the Closing Date and any other date TARGETS are
sold pursuant to any overallotment option granted to any underwriters in
accordance with the terms of an underwriting agreement;
(b) in connection with the issue and sale of the TARGETS, at the
direction of the Sponsor, to:
(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, including a registration statement under Rule 415 or Rule
462(b) of the Securities Act, in each case prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the
TARGETS;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the TARGETS in any
jurisdiction in which the Sponsor has determined to qualify or
register such TARGETS for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Chicago Board Options Exchange, any other national
stock exchange or national securities market for listing upon notice
of issuance of any TARGETS;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the TARGETS under Section 12(b) of
the Exchange Act; and
(v) deliver an underwriting agreement providing for the sale
of the TARGETS;
(c) to enter into the Forward Contract and acquire the Forward
Contract Certificates and the Treasury Securities with the proceeds of the
sale of the TARGETS and the Common Securities and to take all actions and
perform such duties as may be required pursuant to the terms of the
Forward Contract Certificates and the Treasury Securities; provided,
however, that the Regular Trustees shall cause legal title to the Forward
Contract Certificates and the Treasury Securities to be held of record in
the name of the Institutional Trustee for the benefit of the Holders of
the Securities;
(d) upon an Acceleration Event, to (i) give the Sponsor and the
Institutional Trustee prompt written notice of the occurrence of such
Acceleration Event; and (ii) give written instructions to the
Institutional Trustee to (a) liquidate the Treasury Securities by
soliciting at least three all-cash bids (one of which may be from an
affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders, and (b) distribute the net
proceeds therefrom (the "Treasury Proceeds"), the
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Accelerated Maturity Payment to holders of the Trust Securities, provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to an Acceleration Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions and voting rights, and to issue relevant notices to the
Holders of Securities;
(f) to take all actions and perform such duties as may be required
pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles), managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the TARGETS or to enable the Trust to effect the purposes for which the
Trust was created;
(n) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in
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carrying out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
and
(ii) causing the Trust to be classified for United Suites
federal income tax purposes as a grantor trust;
provided that such action does not adversely affect the
interests of Holders;
(o) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(p) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers specified in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust
specified in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee specified in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Company.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Institutional
Trustee in its role as Institutional Trustee) shall not, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee in its
role as Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from the Forward
Contract Certificates and the Treasury Securities, but shall promptly
distribute all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) dispose of the Forward Contract Certificates prior to earlier
of the Maturity Date or an Accelerated Maturity Date or dispose of any of
the Treasury Securities prior to an Accelerated Maturity Date;
(iii) acquire any assets other than as expressly provided herein;
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(iv) possess Trust property for other than a Trust purpose;
(v) make any loans or incur any indebtedness;
(vi) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(viii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Institutional Trustee with respect to the Forward
Contract, the Forward Contract Certificates or the Treasury Securities,
(B) waive any past default that is waivable under the Forward Contract,
the Forward Contract Certificates or the Treasury Securities, (C) exercise
any right to rescind or annul any declaration that the Maturity Payment or
Accelerated Maturity Payment shall be due and payable in regard to the
Forward Contract Certificates or (D) consent to any amendment,
modification or termination of the Indenture or the Forward Contract
Certificates where such consent shall be required unless the Trust shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of such action,
the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Forward Contract Certificates and the
Treasury Securities shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities.
The right, title and interest of the Institutional Trustee to the Forward
Contract Certificates and the Treasury Securities shall vest automatically in
each Person who may hereafter be appointed as Institutional Trustee in
accordance with Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Forward
Contract Certificates or the Treasury Securities have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Forward Contract Certificates or the Treasury Securities to
the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee
does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Forward Contract Certificates and the Treasury Securities held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Securities from
the
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Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an account that is maintained with the Institutional Trustee in its
corporate trust department or with a banking institution the rating on
whose long-term unsecured indebtedness assigned by a "nationally
recognized statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least equal to
the rating assigned to unsubordinated indebtedness of SSBH by a nationally
recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to carry out the functions described in clause (i) above; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Accelerated Maturity Payment and the Treasury Proceeds
to Holders of Securities upon the occurrence of an Acceleration Event or
other specified circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Acceleration Event of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Forward Contract
Certificates under the Indenture and, if an Acceleration Event actually known to
a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as a holder of Forward Contract Certificates subject to the
rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
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(h) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of the Treasury Securities
and the Institutional Trustee shall, for the benefit of the Holders of the
Securities, enforce its rights as a holder of the Treasury Securities subject to
the rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
(i) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions on behalf of the Trust with
respect to all Securities and any such Paying Agent shall comply with ss. 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Institutional
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees specified in Section 3.6.
The Institutional Trustee must exercise the powers specified in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any
Acceleration Event and after the curing of all Acceleration Events that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Acceleration Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Acceleration Event and after the
curing or waiving of all such Acceleration Events that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority of the
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Forward Contract
Certificates, the Treasury Securities and the Institutional Trustee
Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Forward Contract, the Forward Contract Certificates, the Treasury
Securities or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor;
(ix) the granting of any right to the Institutional Trustee
hereunder shall not be deemed to impose on the Institutional Trustee an
obligation to exercise such rights subject to Section 3.09(b)(x);
(x) the Institutional Trustee shall not be obligated to exercise any
remedy or take any action hereunder unless directed to do so by the
Holders of a Majority of the Securities and shall have no liability for
its failure to act pending receipt of any such direction.
This Section 3.9 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction, request, certification, order or act of the
Sponsor or the Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate and any Resolution of
the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete
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authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Acceleration Event, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion of Securities as would be entitled to
direct the Institutional Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action
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until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as specified in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, either Regular Trustee or, if there is only one, such Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for five (5) years from the Closing Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the TARGETS and the Common
Securities (together, the "Successor Securities") so long as such
series of Successor Securities ranks the same as the series of
Securities for which it is substituted ranks with respect to
Distributions and payments upon liquidation and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional
Trustee as the Holder of the Forward Contract Certificates and the
Treasury Securities;
(iii) any Successor Securities to the TARGETS are listed, or any
Successor Securities to the TARGETS will be listed upon notification of
issuance, on any national securities exchange or with any organization on
which the TARGETS are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the TARGETS (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
will not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the TARGETS Guarantee.
(c) Notwithstanding Section 3.l5(b), the Trust shall not, without
the consent of Holders of all of the Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if in the opinion of
a nationally recognized independent tax counsel experienced in such matters,
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to at least 3% of the capital
of the Trust, at the same time as the TARGETS are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the TARGETS, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form,
including a registration statement under Rule 415 or Rule 462(b) of the
Securities Act, including any pre-effective or post-
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effective amendments thereto, relating to the registration under the
Securities Act of the TARGETS;
(b) to determine the jurisdictions in which to take appropriate
action to qualify or register for sale all or part of the TARGETS and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such jurisdictions;
(c) to prepare for filing by the Trust an application to the Chicago
Board Options Exchange, any other national stock exchange or national
securities exchange for listing upon notice of issuance of any TARGETS;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
TARGETS under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of an underwriting agreement or
agreements providing for the sale of the TARGETS.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority of the
Common Securities voting as a class at a meeting of the Holders of the
Common Securities or by written consent of such holders in lieu of a
meeting,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, shall be an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
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SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall
be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as specified in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-5 and to the extent Rule 3a-5 requires
a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Institutional Trustee shall possess those
qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect specified in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
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(d) The TARGETS Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as specified in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Michael J. Day
Charles W. Scharf
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
The initial Institutional Trustee shall be:
The Chase Manhattan Bank
(b) Except as expressly specified in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee; and
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities, by vote of the Holders of
a Majority of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities or by written consent of such holders in
lieu of a meeting.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Institutional Trustee under
Section 5.3 (a "Successor Institutional Trustee") has been appointed and
has accepted such appointment by written instrument executed by such
Successor Institutional Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days
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after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Institutional Trustee or Delaware Trustee, as applicable, may petition
any court of competent jurisdiction for appointment of a Successor Institutional
Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.
(f) No Institutional Trustee or Delaware Trustee shall be Liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority
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of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. In
the event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as specified herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the TARGETS and the Common Securities in accordance with the preferences
specified in their respective terms. If and to the extent that (i) the Company
makes a payment in respect of the Forward Contract Certificates held by the
Institutional Trustee or (ii) the issuer of the Treasury Securities makes a
payment in respect of the Treasury Securities held by the Institutional Trustee
(the amount of any such payments described in the foregoing clauses (i) and (ii)
is referred to herein as a "Payment Amount"), the Institutional Trustee shall be
and is directed to make a distribution (a "Distribution") of the Payment Amount
to the Holders on a Pro Rata basis.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue (i)
one class of securities, known as the Targeted Growth Enhanced Terms
Securities(R) ("TARGETS") representing undivided beneficial interests in the
assets of the Trust having such terms as are specified in Annex I and (ii) one
class of common securities (the "Common Securities") representing undivided
beneficial interests in the assets of the Trust having such terms as are
specified in Annex I. The Trust shall issue no securities or other interests in
the assets of the Trust other than the TARGETS and the Common Securities.
(b) The Trust Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Trust Certificates so signed shall be delivered by the Trust,
such Trust Certificates nevertheless may be delivered as though the person who
signed such Trust Certificates had not ceased to be such Regular Trustee; and
any Trust Certificate may be signed on behalf of the Trust by any person who, at
the actual date of execution of such Security, shall be a Regular Trustee of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not a Regular Trustee. Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable.
(e) Every Person, by virtue of having become a Holder or a TARGETS
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor, the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Acceleration Event
pursuant to which the Trust is dissolved in accordance with the terms of
the Securities and the Accelerated Maturity Payment and the Treasury
Proceeds shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(v) upon distribution to the Holders of the Maturity Payment and the
final payment due in respect of the Treasury Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust specified in
Section 3.14; provided that so long as any TARGETS are outstanding and are
not held entirely by SSBH or an affiliate or related party, the Trust may
not voluntarily liquidate, dissolve, wind-up or terminate except in
connection with the occurrence of an Acceleration Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1 (a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions specified in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, TARGETS shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would fail to be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Trust Certificates.
The Regular Trustees shall provide for the registration of Trust
Certificates and of transfers of Trust Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges that may
be imposed in relation to it. The Regular Trustees hereby appoint the
Institutional Trustee the transfer agent for Trust Certificates. Upon surrender
for registration of transfer of any Trust Certificate, the Regular Trustees
shall cause one or more new Trust Certificates to be issued in the name of the
designated transferee or transferees. Every Trust Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Trust
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees. A transferee of a Trust Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Trust Certificate. By acceptance of a Trust Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Trust
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Trust Certificate and of the Securities represented by such
Trust Certificate for purposes of receiving Distributions and
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for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Trust Certificate
or in the Securities represented by such Trust Certificate on the part of any
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the TARGETS, the TARGETS
Certificates, on original issuance, will be issued in the form of one or more,
fully registered, global certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no TARGETS
Beneficial Owner will receive a definitive TARGETS Certificate representing such
TARGETS Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered TARGETS
Certificates (the "Definitive TARGETS Certificates") have been issued to the
TARGETS Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the TARGETS and
the sole holder of the Global Certificates and shall have no obligation to
the TARGETS Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the TARGETS Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such TARGETS Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and the Clearing
Agency shall receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. The Clearing Agency
will make book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the TARGETS Holders is
required under this Declaration, unless and until Definitive TARGETS
Certificates shall have been issued to the TARGETS Beneficial Owners pursuant to
Section 9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the TARGETS Holders to the Clearing Agency, and
upon doing so shall have no obligations to give any additional notice to the
TARGETS Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS, the Regular Trustees may, in
their sole discretion, appoint a successor Clearing Agency with respect to such
TARGETS.
SECTION 9.7 Definitive TARGETS Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the TARGETS;
then:
(x) Definitive TARGETS Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such TARGETS; and
(y) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions , the Regular Trustees shall
cause Definitive TARGETS Certificates to be delivered to TARGETS Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive TARGETS
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which TARGETS may be listed, or to conform
to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If:
(a) any mutilated Trust Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Trust
Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
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then, in the absence of notice that such Trust Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
denomination. In connection with the issuance of any new Trust Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly specified in this Declaration, the TARGETS
Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which return shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the TARGETS shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
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(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
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(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct
specified in paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Company if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees,
(ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Regular Trustees, counsel
or the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or TARGETS Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Company
or TARGETS Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Company and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
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(vii) The Company may purchase and maintain insurance on behalf of
any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Company agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as specified in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have
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the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with United States generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, to the extent, if any, required by the Trust
Indenture Act, within 180 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Forward Contract Certificates or the Treasury Securities held
by the Institutional Trustee shall be made directly to the Institutional Trustee
Account and no other funds of the Trust shall be deposited in the Institutional
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made to any Holder, the Trust may reduce subsequent
Distributions to such Holder by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
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(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) if such proposed amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, an
opinion of counsel (who may be counsel to the Sponsor or the Trust
and which opinion shall be prepared at the expense of the Sponsor)
that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and
(ii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be specified in the terms of such
Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article
V to increase or decrease the number of and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority of the Common
Securities.
(g) Subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of the Declaration to
such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the TARGETS are
listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities
representing at least 10% of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more notices in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage specified in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange or national securities
market on which the TARGETS are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning
not less than the minimum amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot
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submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange or national securities market on which the TARGETS are then
listed or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail postage prepaid, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address specified below (or such other address as the Trust may
give notice of to the Holders of the Securities):
388 Greenwich Street
New York, New York 10013
(b) if given to the Delaware Trustee, at the mailing address
specified below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
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1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at the mailing address
specified below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor specified below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
388 Greenwich Street
New York, New York 10013
(e) if given to any other Holder, at the address specified on the
books and records of the Trust.
All notices provided for in this Declaration shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
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SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
-------------------------------------
Michael J. Day, as Regular Trustee
-------------------------------------
Charles W. Scharf, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Institutional Trustee
By:
---------------------------------
Name:
Title:
SALOMON SMITH BARNEY HOLDINGS INC.
as Sponsor
By:
---------------------------------
Name:
Title:
<PAGE> 53
SCHEDULE I
TREASURY SECURITIES
All forms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
Par Zero-Coupon Strip Rate Price Cost
- --- ----------------- ---- ----- ----
<PAGE> 54
ANNEX I
TERMS OF
THE TARGETS
AND
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 1999 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the TARGETS and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
specified in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. Designation and Number.
(a) TARGETS. Securities of the Trust are hereby designated for the
purposes of identification only as "Targeted Growth Enhanced Terms Securities"
(the "TARGETS"). The certificates evidencing the TARGETS shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange or national securities
market on which the TARGETS are listed.
(b) Common Securities. Securities of the Trust are hereby
designated for the purposes of identification only as "Trust Common Securities"
(the "Common Securities" and, together with the TARGETS, the "Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be a Pro Rata
portion of (i) all monies received by the Trust (a) as quarterly distributions
in respect of the Treasury Securities and (b) as Yield Enhancement Payments, if
any, with respect to the Forward Contract (together, the "Quarterly
Distributions"), (ii) the Maturity Payment or the Accelerated Maturity Payment,
as the case may be, with respect to the Forward Contract and (iii) upon the sale
of the Treasury Securities by the Institutional Trustee following an
Acceleration Event, the net proceeds received by the Trust (the "Treasury
Proceeds") from the sale of such Treasury Securities. A Distribution is payable
only to the extent that monies are received in respect of the Forward Contract
Certificates or Treasury Securities held by the Institutional Trustee on behalf
of the Trust and to the extent the Trust has funds available therefor.
(b) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record
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<PAGE> 55
dates. While the TARGETS remain in book-entry only form, the relevant record
dates for Distributions of the Maturity Payment or Accelerated Maturity Payment
shall be one Business Day prior to the date such Maturity Payment or Accelerated
Maturity Payment, as the case may be, is received by the Trust with respect to
the Forward Contract Certificates. While the TARGETS remain in book-entry only
form, the relevant record dates for Quarterly Distributions shall be one
Business Day prior to the relevant payment dates, which payment dates shall
correspond to the dates on which payments are made in respect of, and in
accordance with the terms of, the Treasury Securities and the Forward Contract
Certificates. While the TARGETS remain in book-entry only form, the relevant
record date for Distributions of the Treasury Proceeds shall be the date that is
one Business Day prior to the date such Treasury Proceeds are received by the
Trust upon liquidation of the Treasury Securities. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the TARGETS will be made as described under the heading "Description
of the TARGETS -- Book-Entry Only Issuance" in the Prospectus dated ,
1999 (the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust with respect to the TARGETS. The relevant
record dates for the Common Securities shall be the same record dates as for the
TARGETS. If the TARGETS shall not continue to remain in book-entry only form,
the relevant record dates for any Distributions shall conform to the rules of
any securities exchange or national securities market on which they are listed
and, if none, shall be 15 days before the relevant payment dates, which payment
dates shall correspond to the dates on which payments are made in respect of,
and in accordance with the terms of, the Treasury Securities and the Forward
Contract Certificates and which record date shall be confirmed by the Regular
Trustees in writing to the Institutional Trustee. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of either the Company having failed to make a payment under the Forward
Contract or the issuer of the Treasury Securities having failed to make a
payment in respect of the Treasury Securities, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on a special record date which shall be the
date on which the amount of the defaulted Distributions are actually received by
the Trust. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
Except as otherwise provided herein, in the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the Holders
of the Securities on the date of the dissolution, winding-up or termination, as
the case may be, will be entitled to receive
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<PAGE> 56
distributions out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors of the
Trust, on a Pro Rata basis.
4. Distribution Upon an Acceleration Event.
(a) If, at any time, a Tax Event, an Investment Company Event or a
Bankruptcy Event (each as defined herein and each an "Acceleration Event") shall
occur and be continuing, the Regular Trustees shall give written instructions to
the Institutional Trustee to (a) dissolve the Trust, liquidate the Treasury
Securities by soliciting at least three all cash bids (one of which may be from
an affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders and, (b) after satisfaction of
creditors, cause to be distributed as soon as is practicable following the
occurrence of such Acceleration Event, to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, of (i)
the Accelerated Maturity Payment and (ii) the Treasury Proceeds.
"Tax Event" means that SSBH shall have requested and received and
shall have delivered to the Regular Trustees an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that there has
been (a) an amendment to, change in or announced proposed change in the laws (or
any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of SSBH or
any of its subsidiaries, or the Trust, or a threatened challenge asserted in
writing against any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Forward Contract
Certificates or the TARGETS, which amendment or change is adopted or which
proposed change, decision or pronouncement is announced or which action,
clarification or challenge occurs on or after the date of the Prospectus
relating to the original issuance of the TARGETS (collectively a "Tax Action"),
which Tax Action relates to any of the items described in (i) and (ii) below,
and that there is more than an insubstantial risk that (i) the Trust is, or will
be, subject to United States federal income tax with respect to income accrued
or received in respect of the Forward Contract or the Treasury Securities, or
(ii) the Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means that SSBH shall have requested and
received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent legal counsel experienced in such matters to
the effect that as a result of the occurrence on or after the date hereof of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
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"Bankruptcy Event" means either of the following shall have
occurred: (i) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or (ii) the commencement by the Company of a voluntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action.
On and from the date fixed by the Regular Trustees for any
dissolution and distribution pursuant to this paragraph 4: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the TARGETS,
will receive its Pro Rata portion of (a) the Accelerated Maturity Payment and
(b) the Treasury Proceeds, in each case to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing TARGETS held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent the right to receive a Pro
Rata portion of (a) the Accelerated Maturity Payment and (b) the Treasury
Proceeds.
(b) Acceleration Event Distribution procedures will be as follows:
(i) Notice of any Acceleration Event (each, an "Acceleration
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Securities as promptly as practicable following the
occurrence of such Acceleration Event. Each Acceleration Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust.
(ii) If an Acceleration Event occurs, then (A) while the TARGETS are
in book-entry only form, with respect to the TARGETS, by 12:00 noon, New
York City time, on the Accelerated Maturity Date, provided that the
Company has paid the Institutional Trustee by 10:00 a.m. on such date an
amount of cash equal to the Accelerated Maturity Payment, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the Pro
Rata portion of the sum of the Accelerated Maturity Payment and the
Treasury Proceeds applicable to the TARGETS and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay
such Pro Rata portion of the sum of the Accelerated Maturity Payment and
the Treasury Proceeds to the Holders of the TARGETS, and (B) with respect
to TARGETS issued in definitive form and Common
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<PAGE> 58
Securities, provided that the Company has paid the Institutional Trustee
by 10:00 a.m. on such date an amount of cash equal to the Pro Rata amount
of the Accelerated Maturity Payment applicable to such TARGETS issued in
definitive form and Common Securities, the Institutional Trustee will pay
such Pro Rata portion of the Accelerated Maturity Payment and a Pro Rata
portion of the Treasury Proceeds to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the relevant record date. If any Accelerated
Maturity Date is not a Business Day, then payment of the sum of the
Accelerated Maturity Payment and the Treasury Proceeds payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such Accelerated Maturity Date.
(iii) Acceleration Notices shall be sent by the Regular Trustees on
behalf of the Trust to (A) in respect of the TARGETS, DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global TARGETS
Certificates have been issued or, if Definitive TARGETS Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may at any time and from time to time purchase outstanding
TARGETS by tender, in the open market or by private agreement.
5. Voting Rights - TARGETS.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the TARGETS will have no
voting rights.
(b) Subject to the requirements specified in this paragraph, the
Holders of a Majority of the TARGETS, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or direct the exercise of any trust or
power conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee, as holder of the Forward Contract
Certificates and the Treasury Securities, to (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercise any trust or power conferred on the Indenture Trustee with
respect to the Forward Contract Certificates, (ii) direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or exercise any trust or power conferred on the Institutional Trustee
with respect to the Treasury Securities, (iii) waive the consequences of any
Acceleration Event under the Indenture that are waivable under the Indenture,
(iv) exercise any right to rescind or annul a declaration that the Accelerated
Maturity Payment shall be due and payable, or (v) consent to any amendment,
modification or termination of the Indenture or the Forward Contract where such
consent shall be required, provided, however, that where a consent or action
would require the
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consent or act of Holders of more than a majority (determined in accordance with
the Indenture) of the outstanding Forward Contract Certificates (a "Super
Majority"), such consent or action shall not be effective until Holders of at
least the proportion of the TARGETS that the relevant Super Majority represents
of the aggregate beneficial interests in the Forward Contract represented by all
the TARGETS outstanding shall have consented to such action or provided such
consent. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Forward Contract Certificates and the Treasury Securities, shall
not take any of the actions described in clauses (i), (ii), (iii), (iv) or (v)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If the Institutional Trustee fails to enforce its rights under the
Forward Contract, any Holder of TARGETS may directly institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Forward Contract without first instituting a legal proceeding against
the Institutional Trustee or any other Person or entity. If the Company fails to
pay amounts owed on the Forward Contract on the date such amounts are otherwise
payable, then a Holder of TARGETS may also directly institute a proceeding for
enforcement of payment to such Holder (a "Direct Action") of the amounts owed in
respect of such Holder's Pro Rata interest in the Forward Contract on or after
the due date specified in the Forward Contract without first (i) directing the
Institutional Trustee to enforce the terms of the Forward Contract or (ii)
instituting a legal proceeding directly against the Company to enforce the
Institutional Trustee's rights under the Forward Contract. Except as provided in
the preceding sentence, the Holders of TARGETS will not be able to exercise
directly any other remedy available to the Holders of the Forward Contract
Certificates. In connection with such Direct Action, SSBH will be subrogated to
the rights of such Holder of TARGETS under the Declaration to the extent of any
payment made by SSBH to such Holder of TARGETS in such Direct Action.
Any required approval or direction of Holders of TARGETS may be
given at a separate meeting of Holders of TARGETS convened for such purpose, at
a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
TARGETS are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
TARGETS. Each such notice will include a statement setting forth (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the TARGETS will be required
for the Trust to (i) cancel TARGETS Certificates, (ii) to make Distributions or
(iii) to distribute any Quarterly Distributions, the Maturity Payment, the
Accelerated Maturity Payment and the Treasury Proceeds held by the Institutional
Trustee, in each case in accordance with the Declaration and the terms of the
Securities.
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Notwithstanding that Holders of TARGETS are entitled to vote or
consent under any of the circumstances described above, any of the TARGETS that
are owned by the Sponsor or any of its Affiliates shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Acceleration Event with respect to the TARGETS has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority of the Common Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Forward Contract Certificates and the Treasury
Securities, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred on the Institutional Trustee with respect to the
Forward Contract, (ii) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee with respect to
the Treasury Securities, (iii) waive the consequences of any Acceleration Event
under the Indenture that are waivable under the Indenture, (iv) exercise any
right to rescind or annul a declaration that the Accelerated Maturity Payment
shall be due and payable or (v) consent to any amendment, modification or
termination of the Indenture or Forward Contract Certificates where such consent
shall be required, provided that where a consent or action under the Indenture
would require the consent or act of the Holders of a Super Majority of the
Forward Contract Certificates, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion of the Common Securities that the relevant Super Majority
represents of the aggregate beneficial interests in the Forward Contract
represented by all the Common Securities outstanding. Pursuant to this paragraph
6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the Indenture Trustee as
specified above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
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Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to (i) cancel Common Securities, (ii) to make
Distributions, (iii) to liquidate the Treasury Securities or (iv) to distribute
any Quarterly Distribution, the Maturity Payment, the Accelerated Maturity
Payment or the Treasury Proceeds to Holders of the Securities, in each case in
accordance with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the TARGETS or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority of such
class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Forward Contract Certificates is required under the Indenture with
respect to any amendment, modification or termination of the Indenture or the
Forward Contract Certificates, the Institutional Trustee shall request the
written direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority of the
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of the holders of a Super
Majority of the Forward Contract Certificates, the Institutional Trustee may
only give such consent at the direction of the Holders of a Super
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Majority of the Securities outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this paragraph 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean proportionately to each
Holder of Securities according to the aggregate beneficial interests in the
assets of the Trust represented by the Securities held by the relevant Holder in
relation to the aggregate beneficial interests in the assets of the Trust
represented by all Securities outstanding unless, in relation to a payment, an
Acceleration Event under the Declaration has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the TARGETS proportionately according to the aggregate beneficial
interests in the assets of the Trust represented by the TARGETS held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all TARGETS outstanding, and only after satisfaction of
all amounts owed to the Holders of the TARGETS, to each Holder of Common
Securities proportionately according to the aggregate beneficial interests in
the assets of the Trust represented by the Common Securities held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all Common Securities outstanding.
9. Ranking.
The TARGETS rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Acceleration Event occurs
and is continuing in respect of the Forward Contract Certificates held by the
Institutional Trustee, no payments in respect of Distributions on, or payments
upon liquidation or otherwise with respect to, the Common Securities shall be
made until the Holders of TARGETS shall be paid in full the Distributions and
payments upon liquidation or otherwise to which they are entitled at the time.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
TARGETS to be listed on the .
11. Acceptance of Securities Guarantee, the Indenture and the
Treasury Securities.
Each Holder of TARGETS and Common Securities, by the acceptance
thereof, agrees to the provisions of the TARGETS Guarantee, and to the
provisions of the Indenture and the Treasury Securities.
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12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge on written request to the
Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF TARGETS(R) CERTIFICATE
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE DECLARATION AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Securities
1
CUSIP NO.
Certificate Evidencing Securities
of
TARGETS Trust IV
Targeted Growth Enhanced Terms Securities
TARGETS TRUST IV, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of ( ) securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Targeted Growth Enhanced Terms Securities (the "TARGETS"). The
TARGETS are transferable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper
A1-1
<PAGE> 65
form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the TARGETS are specified in, and
this certificate and the TARGETS represented hereby are issued and shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of , 1999, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the TARGETS as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the TARGETS Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the TARGETS Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the TARGETS as a beneficial interest in a
pro rata portion of (i) the Treasury Securities and (ii) a cash settled forward
purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
-------------------------------------
Michael J. Day, as Regular Trustee
-------------------------------------
Charles W. Scharf, as Regular Trustee
A1-2
<PAGE> 66
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this TARGETS
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
_________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: ___________________
Signature: __________________
(Sign exactly as your name appears on the other side of this TARGETS
Certificate)
A1-3
<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SPECIFIED IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Securities
C-1
Certificate Evidencing Securities
of
TARGETS Trust IV
Trust Common Securities
TARGETS TRUST IV, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Salomon Smith
Barney Holdings Inc., a Delaware corporation (the "Holder"), is the registered
owner of common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the Trust Common Securities (the
"Common Securities"). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney upon surrender
of this certificate duly endorsed and in proper form for transfer and
satisfaction of the other conditions specified in the Declaration (as defined
below), including, without limitation, Section 9.1 thereof. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of , 1999, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the Common Securities
Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the Common Securities as a beneficial
interest in a pro rata portion of (i) the Treasury Securities and (ii) a cash
settled forward purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999
----------------------------------------
Michael J. Day, as Regular Trustee
----------------------------------------
Charles W. Scharf, as Regular Trustee
A2-1
<PAGE> 68
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: ___________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-2
<PAGE> 69
EXHIBIT B
SPECIMEN OF FORWARD CONTRACT CERTIFICATE
B-1
<PAGE> 70
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4(i)
==========================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
TARGETS TRUST V
Dated as of , 1999
==========================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................7
SECTION 2.2 Lists of Holders of Securities...................................8
SECTION 2.3 Reports by the Institutional Trustee.............................8
SECTION 2.4 Quarterly Reports to Institutional Trustee.......................8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................8
SECTION 2.6 Acceleration Events; Waiver......................................8
SECTION 2.7 Acceleration Event; Notice......................................10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name............................................................10
SECTION 3.2 Office..........................................................11
SECTION 3.3 Purpose.........................................................11
SECTION 3.4 Authority.......................................................11
SECTION 3.5 Title to Property of the Trust..................................11
SECTION 3.6 Powers and Duties of the Regular Trustees.......................11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............14
SECTION 3.8 Powers and Duties of the Institutional Trustee..................15
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee....................................................17
SECTION 3.10 Certain Rights of Institutional Trustee........................19
SECTION 3.11 Delaware Trustee...............................................21
SECTION 3.12 Execution of Documents.........................................21
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........21
SECTION 3.14 Duration of Trust..............................................21
SECTION 3.15 Mergers........................................................22
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.........................23
SECTION 4.2 Responsibilities of the Sponsor.................................23
i
<PAGE> 3
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..............................................24
SECTION 5.2 Delaware Trustee................................................25
SECTION 5.3 Institutional Trustee; Eligibility..............................25
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally..................................................26
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.........26
SECTION 5.6 Appointment, Removal and Resignation of Trustees................26
SECTION 5.7 Vacancies among Trustees........................................28
SECTION 5.8 Effect of Vacancies.............................................28
SECTION 5.9 Meetings........................................................28
SECTION 5.10 Delegation of Power............................................29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business...................................................29
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions...................................................29
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.........................30
ARTICLE VIlI
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust............................................31
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..........................................32
SECTION 9.2 Transfer of Trust Certificates..................................32
SECTION 9.3 Deemed Security Holders.........................................32
SECTION 9.4 Book-Entry Interests............................................33
SECTION 9.5 Notices to Clearing Agency......................................33
SECTION 9.6 Appointment of Successor Clearing Agency........................34
SECTION 9.7 Definitive TARGETS Certificates.................................34
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.........34
ii
<PAGE> 4
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.1 Liability......................................................35
SECTION 10.2 Exculpation....................................................35
SECTION 10.3 Fiduciary Duty.................................................36
SECTION 10.4 Indemnification................................................37
SECTION 10.5 Outside Businesses.............................................39
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year....................................................40
SECTION 11.2 Certain Accounting Matters.....................................40
SECTION 11.3 Banking........................................................41
SECTION 11.4 Withholding....................................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.....................................................41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................43
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices........................................................44
SECTION 13.2 Governing Law..................................................45
SECTION 13.3 Intention of the Parties.......................................45
SECTION 13.4 Headings.......................................................45
SECTION 13.5 Successors and Assigns.........................................46
SECTION 13.6 Partial Enforceability.........................................46
SECTION 13.7 Counterparts...................................................46
ANNEX I TERMS OF SECURITIES................................... I-1
EXHIBIT A-1 FORM OF TARGETS CERTIFICATE........................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................... A2-1
EXHIBIT B SPECIMEN OF FORWARD CONTRACT CERTIFICATE.............. B-1
EXHIBIT C UNDERWRITING AGREEMENT................................ C-1
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a)................................................... 5.3(a)
310(c)................................................... Inapplicable
311(c)................................................... Inapplicable
312(b)................................................... 2.2
313...................................................... 2.3
314(a)................................................... 2.4
314(b)................................................... Inapplicable
314(c)................................................... 2.5
314(d)................................................... Inapplicable
314(f)................................................... Inapplicable
315(a)................................................... 3.9(b)
315(c)................................................... 3.9(a)
315(d)................................................... 3.9(b)
316(a)................................................... 2.6, Annex I
316(c)................................................... 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TARGETS TRUST V
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of , 1999, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established TARGETS TRUST V
(the "Trust"), under the Business Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of , 1999 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on , 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in the Forward Contract
represented by the Forward Contract Certificates and the Treasury Securities
(each as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE> 7
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Indenture.
"Accelerated Maturity Payment" has the meaning specified in the
Indenture.
"Acceleration Event" has the meaning specified in Annex I hereto.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" has the meaning specified in Annex I.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York, are permitted or required
by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the TARGETS and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the TARGETS. The initial Clearing
Agency shall be DTC.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 8
"Closing Date" means , 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
The "Company" means SSBH in its capacity as issuer of the Forward
Contract under the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Definitive TARGETS Certificates" has the meaning specified in
Section 9.4.
"Delaware Trustee" has the meaning specified in Section 5.1.
"Distribution" has the meaning specified in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning specified in Section
10.4(b).
"Forward Contract" means the Forward Contract with respect to the
Common Stock of to be issued by the Company under the Indenture.
3
<PAGE> 9
"Forward Contract Certificates" means the certificates (defined in
the Indenture as the "Securities") evidencing interests in the Forward Contract,
a specimen of which is attached hereto as Exhibit B.
"Global Certificate" has the meaning specified in Section 9.4.
"Holder" means a Person in whose name a Trust Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 1999, between
the Company and the Indenture Trustee with respect to the Forward Contract.
"Indenture Trustee" means The Chase Manhattan Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements specified in Section 5.3.
"Institutional Trustee Account" has the meaning specified in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in Annex I.
"Legal Action" has the meaning specified in Section 3.6(g).
"Majority of the Securities", "Majority of the TARGETS" or "Majority
of the Common Securities" means, as the context may require, except as provided
in the terms of the Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class, or Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
securities representing more than 50% of all outstanding beneficial interests in
the assets of the Trust by all Holders of Securities or Holders of the relevant
class of Securities, as the case may be.
"Maturity Date" has the meaning specified in the Indenture.
"Maturity Payment" has the meaning specified in the Indenture.
4
<PAGE> 10
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning specified in Annex I.
"Quarterly Distributions" has the meaning specified in Annex I.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
designated officers and who, in any case, has direct responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom
5
<PAGE> 11
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the TARGETS.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means SSBH or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"SSBH" means Salomon Smith Barney Holdings Inc., a Delaware
corporation, together with any successor entity in a merger, consolidation or
amalgamation.
"Successor Delaware Trustee" has the meaning specified in Section
5.6.
"Successor Entity" has the meaning specified in Section 3.15(b).
"Successor Institutional Trustee" has the meaning specified in
Section 5.6.
"Successor Securities" has the meaning specified in Section 3.15(b).
"Super Majority" has the meaning specified in Section 2.6(a)(ii).
"TARGETS" has the meaning specified in Section 7.1.
"TARGETS Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"TARGETS Certificate" means a definitive certificate in fully
registered form representing one or more TARGETS substantially in the form of
Exhibit A-1.
"TARGETS Guarantee" means the guarantee agreement dated as of ,
1999, of the Sponsor in respect of the TARGETS.
"Tax Event" has the meaning specified in Annex I.
"10% of the Securities" means, as the context may require, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class, Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
Securities representing 10% or more of the beneficial interests in the assets of
the
6
<PAGE> 12
Trust by all Holders of Securities or Holders of the relevant class of
Securities, as the case may be.
"Treasury Proceeds" has the meaning specified in Section 3.6(d).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" means the securities having the terms
specified in Schedule I hereto; any payments thereunder shall be made to the
Trust by 10:00 a.m. on the relevant date for Quarterly Distributions in respect
of the TARGETS.
"Trust Certificate" means a Common Security Certificate or a TARGETS
Certificate.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof and references herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
"Yield Enhancement Payments" has the meaning specified in the
Indenture.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
7
<PAGE> 13
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the TARGETS such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Quarterly Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information, if any, as required by ss. 314 of the Trust Indenture Act and the
compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314 of the Trust Indenture
Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters specified in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Acceleration Events; Waiver.
(a) The Holders of a Majority of TARGETS may, by vote, on behalf of
the Holders of all of the TARGETS, waive any past Acceleration Event in respect
of the TARGETS and its consequences, provided that, if the underlying
Acceleration Event under the Indenture:
(i) is not waivable under the Indenture, the Acceleration Event
under this Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority (determined in accordance with the Indenture) of the outstanding
Forward Contract Certificates (a "Super Majority") affected thereby, only
the Holders of at least the same proportion of the TARGETS that the
relevant Super Majority represents of the aggregate outstanding beneficial
interests in the Forward Contract represented by all the TARGETS
8
<PAGE> 14
outstanding may waive such Acceleration Event in respect of the TARGETS
under this Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Acceleration Event with respect to the
TARGETS arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent or other
default or an Acceleration Event with respect to the TARGETS or impair any right
consequent thereon. Any waiver by the Holders of the TARGETS of an Acceleration
Event with respect to the TARGETS shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Acceleration Event with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority of the Common Securities may, by vote,
on behalf of the Holders of all of the Common Securities, waive any past
Acceleration Event with respect to the Common Securities and its consequences,
provided that, if the underlying Acceleration Event:
(i) is not waivable under the Indenture, the Acceleration Event
under the Declaration shall also not be waivable, except where the Holders
of the Common Securities are deemed to have waived such Acceleration Event
under the Declaration as provided in this Section 2.6(b); or
(ii) is waivable only with the consent of a Super Majority of the
Securities, only the Holders of at least the proportion of the Common
Securities that the relevant Super Majority represents of the aggregate
outstanding beneficial interests in the Forward Contract represented by
all the Common Securities outstanding may waive such Acceleration Event in
respect of the Common Securities under the Declaration, except where the
Holders of the Common Securities are deemed to have waived such
Acceleration Event under the Declaration as provided in this Section
2.6(b);
provided further, that each Holder of Common Securities will be deemed to have
waived any such Acceleration Event and all Acceleration Events with respect to
the Common Securities and their consequences until all Acceleration Events with
respect to the TARGETS have been cured, waived or otherwise eliminated, and
until such Acceleration Events with respect to the TARGETS have been so cured,
waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the TARGETS and only the Holders of
the TARGETS will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon the waiver of an Acceleration Event by
the Holders of a Majority of the
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Common Securities, any such default shall cease to exist and any Acceleration
Event with respect to the Common Securities arising therefrom shall be deemed to
have been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Acceleration Event with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Acceleration Event under the Indenture by the
Institutional Trustee at the direction of the Holders of the TARGETS,
constitutes a waiver of the corresponding Acceleration Event under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Acceleration Event; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Acceleration Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Acceleration Event as defined in the Indenture not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein) and (ii) any notice of default received
from the Indenture Trustee with respect to any Forward Contract Certificate
which notice from the Institutional Trustee to the Holders shall state that an
Acceleration Event under the Indenture also constitutes an Acceleration Event
with respect to the Securities; provided that, except for a default in the
payment of amounts due at maturity of any of the Trust Certificates, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration shall
have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "TARGETS Trust V", as such name may be modified
from time to time by the Regular Trustees following written notice to the
Delaware Trustee, the Institutional Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is 388 Greenwich
Street, New York, New York 10013. On ten Business Days written notice to the
Holders of Securities, the Delaware Trustee and the Institutional Trustee, the
Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities and use at least 85% of the proceeds from such sale to
purchase the Forward Contract Certificates and to use not more than 15% of such
proceeds to acquire the Treasury Securities, and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as
specified in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Forward
Contract Certificates, the Treasury Securities and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of TARGETS and no more than one series of Common Securities, and,
provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of the TARGETS and
the Common Securities on the Closing Date and any other date TARGETS are
sold pursuant to any overallotment option granted to any underwriters in
accordance with the terms of an underwriting agreement;
(b) in connection with the issue and sale of the TARGETS, at the
direction of the Sponsor, to:
(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, including a registration statement under Rule 415 or Rule
462(b) of the Securities Act, in each case prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the
TARGETS;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the TARGETS in any
jurisdiction in which the Sponsor has determined to qualify or
register such TARGETS for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Chicago Board Options Exchange, any other national
stock exchange or national securities market for listing upon notice
of issuance of any TARGETS;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the TARGETS under Section 12(b) of
the Exchange Act; and
(v) deliver an underwriting agreement providing for the sale
of the TARGETS;
(c) to enter into the Forward Contract and acquire the Forward
Contract Certificates and the Treasury Securities with the proceeds of the
sale of the TARGETS and the Common Securities and to take all actions and
perform such duties as may be required pursuant to the terms of the
Forward Contract Certificates and the Treasury Securities; provided,
however, that the Regular Trustees shall cause legal title to the Forward
Contract Certificates and the Treasury Securities to be held of record in
the name of the Institutional Trustee for the benefit of the Holders of
the Securities;
(d) upon an Acceleration Event, to (i) give the Sponsor and the
Institutional Trustee prompt written notice of the occurrence of such
Acceleration Event; and (ii) give written instructions to the
Institutional Trustee to (a) liquidate the Treasury Securities by
soliciting at least three all-cash bids (one of which may be from an
affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders, and (b) distribute the net
proceeds therefrom (the "Treasury Proceeds"), the
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Accelerated Maturity Payment to holders of the Trust Securities, provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to an Acceleration Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions and voting rights, and to issue relevant notices to the
Holders of Securities;
(f) to take all actions and perform such duties as may be required
pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles), managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the TARGETS or to enable the Trust to effect the purposes for which the
Trust was created;
(n) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in
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carrying out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
and
(ii) causing the Trust to be classified for United Suites
federal income tax purposes as a grantor trust;
provided that such action does not adversely affect the
interests of Holders;
(o) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(p) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers specified in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust
specified in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee specified in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Company.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Institutional Trustee
in its role as Institutional Trustee) shall not, engage in any activity other
than as required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Institutional Trustee in its role as
Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from the Forward
Contract Certificates and the Treasury Securities, but shall promptly
distribute all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) dispose of the Forward Contract Certificates prior to earlier
of the Maturity Date or an Accelerated Maturity Date or dispose of any of
the Treasury Securities prior to an Accelerated Maturity Date;
(iii) acquire any assets other than as expressly provided herein;
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(iv) possess Trust property for other than a Trust purpose;
(v) make any loans or incur any indebtedness;
(vi) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(viii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Institutional Trustee with respect to the Forward
Contract, the Forward Contract Certificates or the Treasury Securities,
(B) waive any past default that is waivable under the Forward Contract,
the Forward Contract Certificates or the Treasury Securities, (C) exercise
any right to rescind or annul any declaration that the Maturity Payment or
Accelerated Maturity Payment shall be due and payable in regard to the
Forward Contract Certificates or (D) consent to any amendment,
modification or termination of the Indenture or the Forward Contract
Certificates where such consent shall be required unless the Trust shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of such action,
the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Forward Contract Certificates and the
Treasury Securities shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities.
The right, title and interest of the Institutional Trustee to the Forward
Contract Certificates and the Treasury Securities shall vest automatically in
each Person who may hereafter be appointed as Institutional Trustee in
accordance with Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Forward
Contract Certificates or the Treasury Securities have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Forward Contract Certificates or the Treasury Securities to
the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee
does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Forward Contract Certificates and the Treasury Securities held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Securities from
the
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Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an account that is maintained with the Institutional Trustee in its
corporate trust department or with a banking institution the rating on
whose long-term unsecured indebtedness assigned by a "nationally
recognized statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least equal to
the rating assigned to unsubordinated indebtedness of SSBH by a nationally
recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to carry out the functions described in clause (i) above; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Accelerated Maturity Payment and the Treasury Proceeds
to Holders of Securities upon the occurrence of an Acceleration Event or
other specified circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Acceleration Event of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Forward Contract
Certificates under the Indenture and, if an Acceleration Event actually known to
a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as a holder of Forward Contract Certificates subject to the
rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
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(h) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of the Treasury Securities
and the Institutional Trustee shall, for the benefit of the Holders of the
Securities, enforce its rights as a holder of the Treasury Securities subject to
the rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
(i) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions on behalf of the Trust with
respect to all Securities and any such Paying Agent shall comply with ss. 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Institutional
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees specified in Section 3.6.
The Institutional Trustee must exercise the powers specified in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any
Acceleration Event and after the curing of all Acceleration Events that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Acceleration Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Acceleration Event and after the
curing or waiving of all such Acceleration Events that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority of the
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Forward Contract
Certificates, the Treasury Securities and the Institutional Trustee
Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Forward Contract, the Forward Contract Certificates, the Treasury
Securities or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor;
(ix) the granting of any right to the Institutional Trustee
hereunder shall not be deemed to impose on the Institutional Trustee an
obligation to exercise such rights subject to Section 3.09(b)(x);
(x) the Institutional Trustee shall not be obligated to exercise any
remedy or take any action hereunder unless directed to do so by the
Holders of a Majority of the Securities and shall have no liability for
its failure to act pending receipt of any such direction.
This Section 3.9 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction, request, certification, order or act of the
Sponsor or the Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate and any Resolution of
the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete
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authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Acceleration Event, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion of Securities as would be entitled to
direct the Institutional Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action
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until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as specified in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, either Regular Trustee or, if there is only one, such Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for five (5) years from the Closing Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the TARGETS and the Common
Securities (together, the "Successor Securities") so long as such
series of Successor Securities ranks the same as the series of
Securities for which it is substituted ranks with respect to
Distributions and payments upon liquidation and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional
Trustee as the Holder of the Forward Contract Certificates and the
Treasury Securities;
(iii) any Successor Securities to the TARGETS are listed, or any
Successor Securities to the TARGETS will be listed upon notification of
issuance, on any national securities exchange or with any organization on
which the TARGETS are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the TARGETS (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
will not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the TARGETS Guarantee.
(c) Notwithstanding Section 3.l5(b), the Trust shall not, without
the consent of Holders of all of the Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if in the opinion of
a nationally recognized independent tax counsel experienced in such matters,
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to at least 3% of the capital
of the Trust, at the same time as the TARGETS are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the TARGETS, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form,
including a registration statement under Rule 415 or Rule 462(b) of the
Securities Act, including any pre-effective or post-
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effective amendments thereto, relating to the registration under the
Securities Act of the TARGETS;
(b) to determine the jurisdictions in which to take appropriate
action to qualify or register for sale all or part of the TARGETS and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such jurisdictions;
(c) to prepare for filing by the Trust an application to the Chicago
Board Options Exchange, any other national stock exchange or national
securities exchange for listing upon notice of issuance of any TARGETS;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
TARGETS under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of an underwriting agreement or
agreements providing for the sale of the TARGETS.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority of the
Common Securities voting as a class at a meeting of the Holders of the
Common Securities or by written consent of such holders in lieu of a
meeting,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, shall be an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
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SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall
be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as specified in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-5 and to the extent Rule 3a-5 requires
a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Institutional Trustee shall possess those
qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect specified in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
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(d) The TARGETS Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as specified in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Michael J. Day
Charles W. Scharf
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
The initial Institutional Trustee shall be:
The Chase Manhattan Bank
(b) Except as expressly specified in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee; and
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities, by vote of the Holders of
a Majority of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities or by written consent of such holders in
lieu of a meeting.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Institutional Trustee under
Section 5.3 (a "Successor Institutional Trustee") has been appointed and
has accepted such appointment by written instrument executed by such
Successor Institutional Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days
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after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Institutional Trustee or Delaware Trustee, as applicable, may petition
any court of competent jurisdiction for appointment of a Successor Institutional
Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.
(f) No Institutional Trustee or Delaware Trustee shall be Liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority
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of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. In
the event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as specified herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the TARGETS and the Common Securities in accordance with the preferences
specified in their respective terms. If and to the extent that (i) the Company
makes a payment in respect of the Forward Contract Certificates held by the
Institutional Trustee or (ii) the issuer of the Treasury Securities makes a
payment in respect of the Treasury Securities held by the Institutional Trustee
(the amount of any such payments described in the foregoing clauses (i) and (ii)
is referred to herein as a "Payment Amount"), the Institutional Trustee shall be
and is directed to make a distribution (a "Distribution") of the Payment Amount
to the Holders on a Pro Rata basis.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue (i)
one class of securities, known as the Targeted Growth Enhanced Terms
Securities(R) ("TARGETS") representing undivided beneficial interests in the
assets of the Trust having such terms as are specified in Annex I and (ii) one
class of common securities (the "Common Securities") representing undivided
beneficial interests in the assets of the Trust having such terms as are
specified in Annex I. The Trust shall issue no securities or other interests in
the assets of the Trust other than the TARGETS and the Common Securities.
(b) The Trust Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Trust Certificates so signed shall be delivered by the Trust,
such Trust Certificates nevertheless may be delivered as though the person who
signed such Trust Certificates had not ceased to be such Regular Trustee; and
any Trust Certificate may be signed on behalf of the Trust by any person who, at
the actual date of execution of such Security, shall be a Regular Trustee of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not a Regular Trustee. Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable.
(e) Every Person, by virtue of having become a Holder or a TARGETS
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor, the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Acceleration Event
pursuant to which the Trust is dissolved in accordance with the terms of
the Securities and the Accelerated Maturity Payment and the Treasury
Proceeds shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(v) upon distribution to the Holders of the Maturity Payment and the
final payment due in respect of the Treasury Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust specified in
Section 3.14; provided that so long as any TARGETS are outstanding and are
not held entirely by SSBH or an affiliate or related party, the Trust may
not voluntarily liquidate, dissolve, wind-up or terminate except in
connection with the occurrence of an Acceleration Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1 (a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions specified in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, TARGETS shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would fail to be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Trust Certificates.
The Regular Trustees shall provide for the registration of Trust
Certificates and of transfers of Trust Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges that may
be imposed in relation to it. The Regular Trustees hereby appoint the
Institutional Trustee the transfer agent for Trust Certificates. Upon surrender
for registration of transfer of any Trust Certificate, the Regular Trustees
shall cause one or more new Trust Certificates to be issued in the name of the
designated transferee or transferees. Every Trust Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Trust
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees. A transferee of a Trust Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Trust Certificate. By acceptance of a Trust Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Trust
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Trust Certificate and of the Securities represented by such
Trust Certificate for purposes of receiving Distributions and
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for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Trust Certificate
or in the Securities represented by such Trust Certificate on the part of any
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the TARGETS, the TARGETS
Certificates, on original issuance, will be issued in the form of one or more,
fully registered, global certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no TARGETS
Beneficial Owner will receive a definitive TARGETS Certificate representing such
TARGETS Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered TARGETS
Certificates (the "Definitive TARGETS Certificates") have been issued to the
TARGETS Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the TARGETS and
the sole holder of the Global Certificates and shall have no obligation to
the TARGETS Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the TARGETS Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such TARGETS Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and the Clearing
Agency shall receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. The Clearing Agency
will make book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the TARGETS Holders is
required under this Declaration, unless and until Definitive TARGETS
Certificates shall have been issued to the TARGETS Beneficial Owners pursuant to
Section 9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the TARGETS Holders to the Clearing Agency, and
upon doing so shall have no obligations to give any additional notice to the
TARGETS Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS, the Regular Trustees may, in
their sole discretion, appoint a successor Clearing Agency with respect to such
TARGETS.
SECTION 9.7 Definitive TARGETS Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the TARGETS;
then:
(x) Definitive TARGETS Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such TARGETS; and
(y) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions , the Regular Trustees shall
cause Definitive TARGETS Certificates to be delivered to TARGETS Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive TARGETS
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which TARGETS may be listed, or to conform
to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If:
(a) any mutilated Trust Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Trust
Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
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then, in the absence of notice that such Trust Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
denomination. In connection with the issuance of any new Trust Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly specified in this Declaration, the TARGETS
Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which return shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the TARGETS shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
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<PAGE> 42
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
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(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct
specified in paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Company if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees,
(ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Regular Trustees, counsel
or the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or TARGETS Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Company
or TARGETS Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Company and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
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(vii) The Company may purchase and maintain insurance on behalf of
any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Company agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as specified in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have
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the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with United States generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, to the extent, if any, required by the Trust
Indenture Act, within 180 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Forward Contract Certificates or the Treasury Securities held
by the Institutional Trustee shall be made directly to the Institutional Trustee
Account and no other funds of the Trust shall be deposited in the Institutional
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made to any Holder, the Trust may reduce subsequent
Distributions to such Holder by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
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(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) if such proposed amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, an
opinion of counsel (who may be counsel to the Sponsor or the Trust
and which opinion shall be prepared at the expense of the Sponsor)
that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and
(ii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be specified in the terms of such
Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article
V to increase or decrease the number of and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority of the Common
Securities.
(g) Subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of the Declaration to
such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the TARGETS are
listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities
representing at least 10% of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more notices in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage specified in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange or national securities
market on which the TARGETS are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning
not less than the minimum amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot
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submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange or national securities market on which the TARGETS are then
listed or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail postage prepaid, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address specified below (or such other address as the Trust may
give notice of to the Holders of the Securities):
388 Greenwich Street
New York, New York 10013
(b) if given to the Delaware Trustee, at the mailing address
specified below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
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1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at the mailing address
specified below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor specified below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
388 Greenwich Street
New York, New York 10013
(e) if given to any other Holder, at the address specified on the
books and records of the Trust.
All notices provided for in this Declaration shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
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SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
-------------------------------------
Michael J. Day, as Regular Trustee
-------------------------------------
Charles W. Scharf, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Institutional Trustee
By:
---------------------------------
Name:
Title:
SALOMON SMITH BARNEY HOLDINGS INC.
as Sponsor
By:
---------------------------------
Name:
Title:
<PAGE> 53
SCHEDULE I
TREASURY SECURITIES
All forms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
<TABLE>
<CAPTION>
Par Zero-Coupon Strip Rate Price Cost
- --- ----------------- ---- ----- ----
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 54
ANNEX I
TERMS OF
THE TARGETS
AND
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 1999 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the TARGETS and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
specified in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. Designation and Number.
(a) TARGETS. Securities of the Trust are hereby designated for the
purposes of identification only as "Targeted Growth Enhanced Terms Securities"
(the "TARGETS"). The certificates evidencing the TARGETS shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange or national securities
market on which the TARGETS are listed.
(b) Common Securities. Securities of the Trust are hereby
designated for the purposes of identification only as "Trust Common Securities"
(the "Common Securities" and, together with the TARGETS, the "Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be a Pro Rata
portion of (i) all monies received by the Trust (a) as quarterly distributions
in respect of the Treasury Securities and (b) as Yield Enhancement Payments, if
any, with respect to the Forward Contract (together, the "Quarterly
Distributions"), (ii) the Maturity Payment or the Accelerated Maturity Payment,
as the case may be, with respect to the Forward Contract and (iii) upon the sale
of the Treasury Securities by the Institutional Trustee following an
Acceleration Event, the net proceeds received by the Trust (the "Treasury
Proceeds") from the sale of such Treasury Securities. A Distribution is payable
only to the extent that monies are received in respect of the Forward Contract
Certificates or Treasury Securities held by the Institutional Trustee on behalf
of the Trust and to the extent the Trust has funds available therefor.
(b) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record
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<PAGE> 55
dates. While the TARGETS remain in book-entry only form, the relevant record
dates for Distributions of the Maturity Payment or Accelerated Maturity Payment
shall be one Business Day prior to the date such Maturity Payment or Accelerated
Maturity Payment, as the case may be, is received by the Trust with respect to
the Forward Contract Certificates. While the TARGETS remain in book-entry only
form, the relevant record dates for Quarterly Distributions shall be one
Business Day prior to the relevant payment dates, which payment dates shall
correspond to the dates on which payments are made in respect of, and in
accordance with the terms of, the Treasury Securities and the Forward Contract
Certificates. While the TARGETS remain in book-entry only form, the relevant
record date for Distributions of the Treasury Proceeds shall be the date that is
one Business Day prior to the date such Treasury Proceeds are received by the
Trust upon liquidation of the Treasury Securities. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the TARGETS will be made as described under the heading "Description
of the TARGETS -- Book-Entry Only Issuance" in the Prospectus dated ,
1999 (the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust with respect to the TARGETS. The relevant
record dates for the Common Securities shall be the same record dates as for the
TARGETS. If the TARGETS shall not continue to remain in book-entry only form,
the relevant record dates for any Distributions shall conform to the rules of
any securities exchange or national securities market on which they are listed
and, if none, shall be 15 days before the relevant payment dates, which payment
dates shall correspond to the dates on which payments are made in respect of,
and in accordance with the terms of, the Treasury Securities and the Forward
Contract Certificates and which record date shall be confirmed by the Regular
Trustees in writing to the Institutional Trustee. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of either the Company having failed to make a payment under the Forward
Contract or the issuer of the Treasury Securities having failed to make a
payment in respect of the Treasury Securities, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on a special record date which shall be the
date on which the amount of the defaulted Distributions are actually received by
the Trust. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
Except as otherwise provided herein, in the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the Holders
of the Securities on the date of the dissolution, winding-up or termination, as
the case may be, will be entitled to receive
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<PAGE> 56
distributions out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors of the
Trust, on a Pro Rata basis.
4. Distribution Upon an Acceleration Event.
(a) If, at any time, a Tax Event, an Investment Company Event or a
Bankruptcy Event (each as defined herein and each an "Acceleration Event") shall
occur and be continuing, the Regular Trustees shall give written instructions to
the Institutional Trustee to (a) dissolve the Trust, liquidate the Treasury
Securities by soliciting at least three all cash bids (one of which may be from
an affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders and, (b) after satisfaction of
creditors, cause to be distributed as soon as is practicable following the
occurrence of such Acceleration Event, to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, of (i)
the Accelerated Maturity Payment and (ii) the Treasury Proceeds.
"Tax Event" means that SSBH shall have requested and received and
shall have delivered to the Regular Trustees an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that there has
been (a) an amendment to, change in or announced proposed change in the laws (or
any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of SSBH or
any of its subsidiaries, or the Trust, or a threatened challenge asserted in
writing against any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Forward Contract
Certificates or the TARGETS, which amendment or change is adopted or which
proposed change, decision or pronouncement is announced or which action,
clarification or challenge occurs on or after the date of the Prospectus
relating to the original issuance of the TARGETS (collectively a "Tax Action"),
which Tax Action relates to any of the items described in (i) and (ii) below,
and that there is more than an insubstantial risk that (i) the Trust is, or will
be, subject to United States federal income tax with respect to income accrued
or received in respect of the Forward Contract or the Treasury Securities, or
(ii) the Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means that SSBH shall have requested and
received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent legal counsel experienced in such matters to
the effect that as a result of the occurrence on or after the date hereof of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
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<PAGE> 57
"Bankruptcy Event" means either of the following shall have
occurred: (i) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or (ii) the commencement by the Company of a voluntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action.
On and from the date fixed by the Regular Trustees for any
dissolution and distribution pursuant to this paragraph 4: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the TARGETS,
will receive its Pro Rata portion of (a) the Accelerated Maturity Payment and
(b) the Treasury Proceeds, in each case to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing TARGETS held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent the right to receive a Pro
Rata portion of (a) the Accelerated Maturity Payment and (b) the Treasury
Proceeds.
(b) Acceleration Event Distribution procedures will be as follows:
(i) Notice of any Acceleration Event (each, an "Acceleration
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Securities as promptly as practicable following the
occurrence of such Acceleration Event. Each Acceleration Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust.
(ii) If an Acceleration Event occurs, then (A) while the TARGETS are
in book-entry only form, with respect to the TARGETS, by 12:00 noon, New
York City time, on the Accelerated Maturity Date, provided that the
Company has paid the Institutional Trustee by 10:00 a.m. on such date an
amount of cash equal to the Accelerated Maturity Payment, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the Pro
Rata portion of the sum of the Accelerated Maturity Payment and the
Treasury Proceeds applicable to the TARGETS and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay
such Pro Rata portion of the sum of the Accelerated Maturity Payment and
the Treasury Proceeds to the Holders of the TARGETS, and (B) with respect
to TARGETS issued in definitive form and Common
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<PAGE> 58
Securities, provided that the Company has paid the Institutional Trustee
by 10:00 a.m. on such date an amount of cash equal to the Pro Rata amount
of the Accelerated Maturity Payment applicable to such TARGETS issued in
definitive form and Common Securities, the Institutional Trustee will pay
such Pro Rata portion of the Accelerated Maturity Payment and a Pro Rata
portion of the Treasury Proceeds to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the relevant record date. If any Accelerated
Maturity Date is not a Business Day, then payment of the sum of the
Accelerated Maturity Payment and the Treasury Proceeds payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such Accelerated Maturity Date.
(iii) Acceleration Notices shall be sent by the Regular Trustees on
behalf of the Trust to (A) in respect of the TARGETS, DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global TARGETS
Certificates have been issued or, if Definitive TARGETS Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may at any time and from time to time purchase outstanding
TARGETS by tender, in the open market or by private agreement.
5. Voting Rights - TARGETS.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the TARGETS will have no
voting rights.
(b) Subject to the requirements specified in this paragraph, the
Holders of a Majority of the TARGETS, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or direct the exercise of any trust or
power conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee, as holder of the Forward Contract
Certificates and the Treasury Securities, to (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercise any trust or power conferred on the Indenture Trustee with
respect to the Forward Contract Certificates, (ii) direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or exercise any trust or power conferred on the Institutional Trustee
with respect to the Treasury Securities, (iii) waive the consequences of any
Acceleration Event under the Indenture that are waivable under the Indenture,
(iv) exercise any right to rescind or annul a declaration that the Accelerated
Maturity Payment shall be due and payable, or (v) consent to any amendment,
modification or termination of the Indenture or the Forward Contract where such
consent shall be required, provided, however, that where a consent or action
would require the
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<PAGE> 59
consent or act of Holders of more than a majority (determined in accordance with
the Indenture) of the outstanding Forward Contract Certificates (a "Super
Majority"), such consent or action shall not be effective until Holders of at
least the proportion of the TARGETS that the relevant Super Majority represents
of the aggregate beneficial interests in the Forward Contract represented by all
the TARGETS outstanding shall have consented to such action or provided such
consent. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Forward Contract Certificates and the Treasury Securities, shall
not take any of the actions described in clauses (i), (ii), (iii), (iv) or (v)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If the Institutional Trustee fails to enforce its rights under the
Forward Contract, any Holder of TARGETS may directly institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Forward Contract without first instituting a legal proceeding against
the Institutional Trustee or any other Person or entity. If the Company fails to
pay amounts owed on the Forward Contract on the date such amounts are otherwise
payable, then a Holder of TARGETS may also directly institute a proceeding for
enforcement of payment to such Holder (a "Direct Action") of the amounts owed in
respect of such Holder's Pro Rata interest in the Forward Contract on or after
the due date specified in the Forward Contract without first (i) directing the
Institutional Trustee to enforce the terms of the Forward Contract or (ii)
instituting a legal proceeding directly against the Company to enforce the
Institutional Trustee's rights under the Forward Contract. Except as provided in
the preceding sentence, the Holders of TARGETS will not be able to exercise
directly any other remedy available to the Holders of the Forward Contract
Certificates. In connection with such Direct Action, SSBH will be subrogated to
the rights of such Holder of TARGETS under the Declaration to the extent of any
payment made by SSBH to such Holder of TARGETS in such Direct Action.
Any required approval or direction of Holders of TARGETS may be
given at a separate meeting of Holders of TARGETS convened for such purpose, at
a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
TARGETS are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
TARGETS. Each such notice will include a statement setting forth (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the TARGETS will be required
for the Trust to (i) cancel TARGETS Certificates, (ii) to make Distributions or
(iii) to distribute any Quarterly Distributions, the Maturity Payment, the
Accelerated Maturity Payment and the Treasury Proceeds held by the Institutional
Trustee, in each case in accordance with the Declaration and the terms of the
Securities.
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Notwithstanding that Holders of TARGETS are entitled to vote or
consent under any of the circumstances described above, any of the TARGETS that
are owned by the Sponsor or any of its Affiliates shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Acceleration Event with respect to the TARGETS has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority of the Common Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Forward Contract Certificates and the Treasury
Securities, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred on the Institutional Trustee with respect to the
Forward Contract, (ii) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee with respect to
the Treasury Securities, (iii) waive the consequences of any Acceleration Event
under the Indenture that are waivable under the Indenture, (iv) exercise any
right to rescind or annul a declaration that the Accelerated Maturity Payment
shall be due and payable or (v) consent to any amendment, modification or
termination of the Indenture or Forward Contract Certificates where such consent
shall be required, provided that where a consent or action under the Indenture
would require the consent or act of the Holders of a Super Majority of the
Forward Contract Certificates, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion of the Common Securities that the relevant Super Majority
represents of the aggregate beneficial interests in the Forward Contract
represented by all the Common Securities outstanding. Pursuant to this paragraph
6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the Indenture Trustee as
specified above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the
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Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to (i) cancel Common Securities, (ii) to make
Distributions, (iii) to liquidate the Treasury Securities or (iv) to distribute
any Quarterly Distribution, the Maturity Payment, the Accelerated Maturity
Payment or the Treasury Proceeds to Holders of the Securities, in each case in
accordance with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the TARGETS or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority of such
class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Forward Contract Certificates is required under the Indenture with
respect to any amendment, modification or termination of the Indenture or the
Forward Contract Certificates, the Institutional Trustee shall request the
written direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority of the
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of the holders of a Super
Majority of the Forward Contract Certificates, the Institutional Trustee may
only give such consent at the direction of the Holders of a Super
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Majority of the Securities outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this paragraph 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean proportionately to each
Holder of Securities according to the aggregate beneficial interests in the
assets of the Trust represented by the Securities held by the relevant Holder in
relation to the aggregate beneficial interests in the assets of the Trust
represented by all Securities outstanding unless, in relation to a payment, an
Acceleration Event under the Declaration has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the TARGETS proportionately according to the aggregate beneficial
interests in the assets of the Trust represented by the TARGETS held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all TARGETS outstanding, and only after satisfaction of
all amounts owed to the Holders of the TARGETS, to each Holder of Common
Securities proportionately according to the aggregate beneficial interests in
the assets of the Trust represented by the Common Securities held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all Common Securities outstanding.
9. Ranking.
The TARGETS rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Acceleration Event occurs
and is continuing in respect of the Forward Contract Certificates held by the
Institutional Trustee, no payments in respect of Distributions on, or payments
upon liquidation or otherwise with respect to, the Common Securities shall be
made until the Holders of TARGETS shall be paid in full the Distributions and
payments upon liquidation or otherwise to which they are entitled at the time.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
TARGETS to be listed on the .
11. Acceptance of Securities Guarantee, the Indenture and the
Treasury Securities.
Each Holder of TARGETS and Common Securities, by the acceptance
thereof, agrees to the provisions of the TARGETS Guarantee, and to the
provisions of the Indenture and the Treasury Securities.
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12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge on written request to the
Sponsor at its principal place of business.
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<PAGE> 64
EXHIBIT A-1
FORM OF TARGETS(R) CERTIFICATE
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE DECLARATION AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Securities
1
CUSIP NO.
Certificate Evidencing Securities
of
TARGETS Trust V
Targeted Growth Enhanced Terms Securities
TARGETS TRUST V, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of ( ) securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Targeted Growth Enhanced Terms Securities (the "TARGETS"). The
TARGETS are transferable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper
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<PAGE> 65
form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the TARGETS are specified in, and
this certificate and the TARGETS represented hereby are issued and shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of , 1999, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the TARGETS as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the TARGETS Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the TARGETS Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the TARGETS as a beneficial interest in a
pro rata portion of (i) the Treasury Securities and (ii) a cash settled forward
purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
-------------------------------------
Michael J. Day, as Regular Trustee
-------------------------------------
Charles W. Scharf, as Regular Trustee
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<PAGE> 66
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this TARGETS
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
_________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this TARGETS
Certificate)
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<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SPECIFIED IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Securities
C-1
Certificate Evidencing Securities
of
TARGETS Trust V
Trust Common Securities
TARGETS TRUST V, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Salomon Smith Barney
Holdings Inc., a Delaware corporation (the "Holder"), is the registered owner of
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the Trust Common Securities (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney upon surrender of this
certificate duly endorsed and in proper form for transfer and satisfaction of
the other conditions specified in the Declaration (as defined below), including,
without limitation, Section 9.1 thereof. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of , 1999, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as specified in Annex I thereto. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Sponsor will provide a
copy of the Declaration and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the Common Securities
Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the Common Securities as a beneficial
interest in a pro rata portion of (i) the Treasury Securities and (ii) a cash
settled forward purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
----------------------------------------
Michael J. Day, as Regular Trustee
----------------------------------------
Charles W. Scharf, as Regular Trustee
A2-1
<PAGE> 68
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-2
<PAGE> 69
EXHIBIT B
SPECIMEN OF FORWARD CONTRACT CERTIFICATE
B-1
<PAGE> 70
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4(j)
=========================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
TARGETS TRUST VI
Dated as of , 1999
=========================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................7
SECTION 2.2 Lists of Holders of Securities...................................8
SECTION 2.3 Reports by the Institutional Trustee.............................8
SECTION 2.4 Quarterly Reports to Institutional Trustee.......................8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................8
SECTION 2.6 Acceleration Events; Waiver......................................8
SECTION 2.7 Acceleration Event; Notice......................................10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name............................................................10
SECTION 3.2 Office..........................................................11
SECTION 3.3 Purpose.........................................................11
SECTION 3.4 Authority.......................................................11
SECTION 3.5 Title to Property of the Trust..................................11
SECTION 3.6 Powers and Duties of the Regular Trustees.......................11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............14
SECTION 3.8 Powers and Duties of the Institutional Trustee..................15
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee....................................................17
SECTION 3.10 Certain Rights of Institutional Trustee........................19
SECTION 3.11 Delaware Trustee...............................................21
SECTION 3.12 Execution of Documents.........................................21
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........21
SECTION 3.14 Duration of Trust..............................................21
SECTION 3.15 Mergers........................................................22
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.........................23
SECTION 4.2 Responsibilities of the Sponsor.................................23
i
<PAGE> 3
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..............................................24
SECTION 5.2 Delaware Trustee................................................25
SECTION 5.3 Institutional Trustee; Eligibility..............................25
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.......................................................26
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.........26
SECTION 5.6 Appointment, Removal and Resignation of Trustees................26
SECTION 5.7 Vacancies among Trustees........................................28
SECTION 5.8 Effect of Vacancies.............................................28
SECTION 5.9 Meetings........................................................28
SECTION 5.10 Delegation of Power............................................29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business...................................................29
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions...................................................29
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.........................30
ARTICLE VIlI
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust............................................31
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..........................................32
SECTION 9.2 Transfer of Trust Certificates..................................32
SECTION 9.3 Deemed Security Holders.........................................32
SECTION 9.4 Book-Entry Interests............................................33
SECTION 9.5 Notices to Clearing Agency......................................33
SECTION 9.6 Appointment of Successor Clearing Agency........................34
SECTION 9.7 Definitive TARGETS Certificates.................................34
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.........34
ii
<PAGE> 4
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability......................................................35
SECTION 10.2 Exculpation....................................................35
SECTION 10.3 Fiduciary Duty.................................................36
SECTION 10.4 Indemnification................................................37
SECTION 10.5 Outside Businesses.............................................39
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year....................................................40
SECTION 11.2 Certain Accounting Matters.....................................40
SECTION 11.3 Banking........................................................41
SECTION 11.4 Withholding....................................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.....................................................41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................43
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices........................................................44
SECTION 13.2 Governing Law..................................................45
SECTION 13.3 Intention of the Parties.......................................45
SECTION 13.4 Headings.......................................................45
SECTION 13.5 Successors and Assigns.........................................46
SECTION 13.6 Partial Enforceability.........................................46
SECTION 13.7 Counterparts...................................................46
ANNEX I TERMS OF SECURITIES................................... I-1
EXHIBIT A-1 FORM OF TARGETS CERTIFICATE........................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................... A2-1
EXHIBIT B SPECIMEN OF FORWARD CONTRACT CERTIFICATE.............. B-1
EXHIBIT C UNDERWRITING AGREEMENT................................ C-1
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- --------------------- -----------
310(a)................................................... 5.3(a)
310(c)................................................... Inapplicable
311(c)................................................... Inapplicable
312(b)................................................... 2.2
313...................................................... 2.3
314(a)................................................... 2.4
314(b)................................................... Inapplicable
314(c)................................................... 2.5
314(d)................................................... Inapplicable
314(f)................................................... Inapplicable
315(a)................................................... 3.9(b)
315(c)................................................... 3.9(a)
315(d)................................................... 3.9(b)
316(a)................................................... 2.6, Annex I
316(c)................................................... 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TARGETS TRUST VI
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of , 1999, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established TARGETS TRUST VI
(the "Trust"), under the Business Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of , 1999 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on , 1999, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in the
Forward Contract represented by the Forward Contract Certificates and the
Treasury Securities (each as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE> 7
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Indenture.
"Accelerated Maturity Payment" has the meaning specified in the
Indenture.
"Acceleration Event" has the meaning specified in Annex I hereto.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" has the meaning specified in Annex I.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York, are permitted or required
by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq. , as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the TARGETS and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the TARGETS. The initial Clearing
Agency shall be DTC.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 8
"Closing Date" means , 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
The "Company" means SSBH in its capacity as issuer of the Forward
Contract under the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Definitive TARGETS Certificates" has the meaning specified in
Section 9.4.
"Delaware Trustee" has the meaning specified in Section 5.1.
"Distribution" has the meaning specified in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning specified in Section
10.4(b).
"Forward Contract" means the Forward Contract with respect to the
Common Stock of to be issued by the Company under the Indenture.
3
<PAGE> 9
"Forward Contract Certificates" means the certificates (defined in
the Indenture as the "Securities") evidencing interests in the Forward Contract,
a specimen of which is attached hereto as Exhibit B.
"Global Certificate" has the meaning specified in Section 9.4.
"Holder" means a Person in whose name a Trust Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 1999, between
the Company and the Indenture Trustee with respect to the Forward Contract.
"Indenture Trustee" means The Chase Manhattan Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements specified in Section 5.3.
"Institutional Trustee Account" has the meaning specified in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in Annex I.
"Legal Action" has the meaning specified in Section 3.6(g).
"Majority of the Securities", "Majority of the TARGETS" or "Majority
of the Common Securities" means, as the context may require, except as provided
in the terms of the Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class, or Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
securities representing more than 50% of all outstanding beneficial interests in
the assets of the Trust by all Holders of Securities or Holders of the relevant
class of Securities, as the case may be.
"Maturity Date" has the meaning specified in the Indenture.
"Maturity Payment" has the meaning specified in the Indenture.
4
<PAGE> 10
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning specified in Annex I.
"Quarterly Distributions" has the meaning specified in Annex I.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
designated officers and who, in any case, has direct responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom
5
<PAGE> 11
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the TARGETS.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means SSBH or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"SSBH" means Salomon Smith Barney Holdings Inc., a Delaware
corporation, together with any successor entity in a merger, consolidation or
amalgamation.
"Successor Delaware Trustee" has the meaning specified in Section
5.6.
"Successor Entity" has the meaning specified in Section 3.15(b).
"Successor Institutional Trustee" has the meaning specified in
Section 5.6.
"Successor Securities" has the meaning specified in Section 3.15(b).
"Super Majority" has the meaning specified in Section 2.6(a)(ii).
"TARGETS" has the meaning specified in Section 7.1.
"TARGETS Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"TARGETS Certificate" means a definitive certificate in fully
registered form representing one or more TARGETS substantially in the form of
Exhibit A-1.
"TARGETS Guarantee" means the guarantee agreement dated as of
, 1999, of the Sponsor in respect of the TARGETS.
"Tax Event" has the meaning specified in Annex I.
"10% of the Securities" means, as the context may require, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class, Holders of
outstanding TARGETS or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of an aggregate amount of such
Securities representing 10% or more of the beneficial interests in the assets of
the
6
<PAGE> 12
Trust by all Holders of Securities or Holders of the relevant class of
Securities, as the case may be.
"Treasury Proceeds" has the meaning specified in Section 3.6(d).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" means the securities having the terms
specified in Schedule I hereto; any payments thereunder shall be made to the
Trust by 10:00 a.m. on the relevant date for Quarterly Distributions in respect
of the TARGETS.
"Trust Certificate" means a Common Security Certificate or a TARGETS
Certificate.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof and references herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
"Yield Enhancement Payments" has the meaning specified in the
Indenture.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
7
<PAGE> 13
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the TARGETS such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Quarterly Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information, if any, as required by ss. 314 of the Trust Indenture Act and the
compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314 of the Trust Indenture
Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters specified in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Acceleration Events; Waiver.
(a) The Holders of a Majority of TARGETS may, by vote, on behalf of
the Holders of all of the TARGETS, waive any past Acceleration Event in respect
of the TARGETS and its consequences, provided that, if the underlying
Acceleration Event under the Indenture:
(i) is not waivable under the Indenture, the Acceleration Event
under this Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority (determined in accordance with the Indenture) of the outstanding
Forward Contract Certificates (a "Super Majority") affected thereby, only
the Holders of at least the same proportion of the TARGETS that the
relevant Super Majority represents of the aggregate outstanding beneficial
interests in the Forward Contract represented by all the TARGETS
8
<PAGE> 14
outstanding may waive such Acceleration Event in respect of the TARGETS
under this Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Acceleration Event with respect to the
TARGETS arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent or other
default or an Acceleration Event with respect to the TARGETS or impair any right
consequent thereon. Any waiver by the Holders of the TARGETS of an Acceleration
Event with respect to the TARGETS shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Acceleration Event with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority of the Common Securities may, by vote,
on behalf of the Holders of all of the Common Securities, waive any past
Acceleration Event with respect to the Common Securities and its consequences,
provided that, if the underlying Acceleration Event:
(i) is not waivable under the Indenture, the Acceleration Event
under the Declaration shall also not be waivable, except where the Holders
of the Common Securities are deemed to have waived such Acceleration Event
under the Declaration as provided in this Section 2.6(b); or
(ii) is waivable only with the consent of a Super Majority of the
Securities, only the Holders of at least the proportion of the Common
Securities that the relevant Super Majority represents of the aggregate
outstanding beneficial interests in the Forward Contract represented by
all the Common Securities outstanding may waive such Acceleration Event in
respect of the Common Securities under the Declaration, except where the
Holders of the Common Securities are deemed to have waived such
Acceleration Event under the Declaration as provided in this Section
2.6(b);
provided further, that each Holder of Common Securities will be deemed to have
waived any such Acceleration Event and all Acceleration Events with respect to
the Common Securities and their consequences until all Acceleration Events with
respect to the TARGETS have been cured, waived or otherwise eliminated, and
until such Acceleration Events with respect to the TARGETS have been so cured,
waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the TARGETS and only the Holders of
the TARGETS will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon the waiver of an Acceleration Event by
the Holders of a Majority of the
9
<PAGE> 15
Common Securities, any such default shall cease to exist and any Acceleration
Event with respect to the Common Securities arising therefrom shall be deemed to
have been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Acceleration Event with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Acceleration Event under the Indenture by the
Institutional Trustee at the direction of the Holders of the TARGETS,
constitutes a waiver of the corresponding Acceleration Event under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Acceleration Event; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Acceleration Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Acceleration Event as defined in the Indenture not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein) and (ii) any notice of default received
from the Indenture Trustee with respect to any Forward Contract Certificate
which notice from the Institutional Trustee to the Holders shall state that an
Acceleration Event under the Indenture also constitutes an Acceleration Event
with respect to the Securities; provided that, except for a default in the
payment of amounts due at maturity of any of the Trust Certificates, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration shall
have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "TARGETS Trust VI", as such name may be modified
from time to time by the Regular Trustees following written notice to the
Delaware Trustee, the Institutional Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is 388 Greenwich
Street, New York, New York 10013. On ten Business Days written notice to the
Holders of Securities, the Delaware Trustee and the Institutional Trustee, the
Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities and use at least 85% of the proceeds from such sale to
purchase the Forward Contract Certificates and to use not more than 15% of such
proceeds to acquire the Treasury Securities, and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as
specified in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Forward
Contract Certificates, the Treasury Securities and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of TARGETS and no more than one series of Common Securities, and,
provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of the TARGETS and
the Common Securities on the Closing Date and any other date TARGETS are
sold pursuant to any overallotment option granted to any underwriters in
accordance with the terms of an underwriting agreement;
(b) in connection with the issue and sale of the TARGETS, at the
direction of the Sponsor, to:
(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, including a registration statement under Rule 415 or Rule
462(b) of the Securities Act, in each case prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the
TARGETS;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the TARGETS in any
jurisdiction in which the Sponsor has determined to qualify or
register such TARGETS for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Chicago Board Options Exchange, any other national
stock exchange or national securities market for listing upon notice
of issuance of any TARGETS;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the TARGETS under Section 12(b) of
the Exchange Act; and
(v) deliver an underwriting agreement providing for the sale
of the TARGETS;
(c) to enter into the Forward Contract and acquire the Forward
Contract Certificates and the Treasury Securities with the proceeds of the
sale of the TARGETS and the Common Securities and to take all actions and
perform such duties as may be required pursuant to the terms of the
Forward Contract Certificates and the Treasury Securities; provided,
however, that the Regular Trustees shall cause legal title to the Forward
Contract Certificates and the Treasury Securities to be held of record in
the name of the Institutional Trustee for the benefit of the Holders of
the Securities;
(d) upon an Acceleration Event, to (i) give the Sponsor and the
Institutional Trustee prompt written notice of the occurrence of such
Acceleration Event; and (ii) give written instructions to the
Institutional Trustee to (a) liquidate the Treasury Securities by
soliciting at least three all-cash bids (one of which may be from an
affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders, and (b) distribute the net
proceeds therefrom (the "Treasury Proceeds"), the
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Accelerated Maturity Payment to holders of the Trust Securities, provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to an Acceleration Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions and voting rights, and to issue relevant notices to the
Holders of Securities;
(f) to take all actions and perform such duties as may be required
pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles), managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the TARGETS or to enable the Trust to effect the purposes for which the
Trust was created;
(n) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in
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carrying out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
and
(ii) causing the Trust to be classified for United Suites
federal income tax purposes as a grantor trust;
provided that such action does not adversely affect the
interests of Holders;
(o) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(p) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers specified in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust
specified in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee specified in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Company.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Institutional
Trustee in its role as Institutional Trustee) shall not, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee in its
role as Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from the Forward
Contract Certificates and the Treasury Securities, but shall promptly
distribute all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) dispose of the Forward Contract Certificates prior to earlier
of the Maturity Date or an Accelerated Maturity Date or dispose of any of
the Treasury Securities prior to an Accelerated Maturity Date;
(iii) acquire any assets other than as expressly provided herein;
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(iv) possess Trust property for other than a Trust purpose;
(v) make any loans or incur any indebtedness;
(vi) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(viii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Institutional Trustee with respect to the Forward
Contract, the Forward Contract Certificates or the Treasury Securities,
(B) waive any past default that is waivable under the Forward Contract,
the Forward Contract Certificates or the Treasury Securities, (C) exercise
any right to rescind or annul any declaration that the Maturity Payment or
Accelerated Maturity Payment shall be due and payable in regard to the
Forward Contract Certificates or (D) consent to any amendment,
modification or termination of the Indenture or the Forward Contract
Certificates where such consent shall be required unless the Trust shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of such action,
the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Forward Contract Certificates and the
Treasury Securities shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities.
The right, title and interest of the Institutional Trustee to the Forward
Contract Certificates and the Treasury Securities shall vest automatically in
each Person who may hereafter be appointed as Institutional Trustee in
accordance with Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Forward
Contract Certificates or the Treasury Securities have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Forward Contract Certificates or the Treasury Securities to
the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee
does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Forward Contract Certificates and the Treasury Securities held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Securities from
the
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Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an account that is maintained with the Institutional Trustee in its
corporate trust department or with a banking institution the rating on
whose long-term unsecured indebtedness assigned by a "nationally
recognized statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least equal to
the rating assigned to unsubordinated indebtedness of SSBH by a nationally
recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to carry out the functions described in clause (i) above; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Accelerated Maturity Payment and the Treasury Proceeds
to Holders of Securities upon the occurrence of an Acceleration Event or
other specified circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Acceleration Event of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Forward Contract
Certificates under the Indenture and, if an Acceleration Event actually known to
a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as a holder of Forward Contract Certificates subject to the
rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
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(h) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of the Treasury Securities
and the Institutional Trustee shall, for the benefit of the Holders of the
Securities, enforce its rights as a holder of the Treasury Securities subject to
the rights of the Holders pursuant to the terms of such Securities, this
Declaration, the Business Trust Act and the Trust Indenture Act.
(i) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions on behalf of the Trust with
respect to all Securities and any such Paying Agent shall comply with ss. 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Institutional
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees specified in Section 3.6.
The Institutional Trustee must exercise the powers specified in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any
Acceleration Event and after the curing of all Acceleration Events that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Acceleration Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Acceleration Event and after the
curing or waiving of all such Acceleration Events that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority of the
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Forward Contract
Certificates, the Treasury Securities and the Institutional Trustee
Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Forward Contract, the Forward Contract Certificates, the Treasury
Securities or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor;
(ix) the granting of any right to the Institutional Trustee
hereunder shall not be deemed to impose on the Institutional Trustee an
obligation to exercise such rights subject to Section 3.09(b)(x);
(x) the Institutional Trustee shall not be obligated to exercise any
remedy or take any action hereunder unless directed to do so by the
Holders of a Majority of the Securities and shall have no liability for
its failure to act pending receipt of any such direction.
This Section 3.9 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction, request, certification, order or act of the
Sponsor or the Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate and any Resolution of
the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete
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authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Acceleration Event, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion of Securities as would be entitled to
direct the Institutional Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action
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until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as specified in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, either Regular Trustee or, if there is only one, such Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for five (5) years from the Closing Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the TARGETS and the Common
Securities (together, the "Successor Securities") so long as such
series of Successor Securities ranks the same as the series of
Securities for which it is substituted ranks with respect to
Distributions and payments upon liquidation and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional
Trustee as the Holder of the Forward Contract Certificates and the
Treasury Securities;
(iii) any Successor Securities to the TARGETS are listed, or any
Successor Securities to the TARGETS will be listed upon notification of
issuance, on any national securities exchange or with any organization on
which the TARGETS are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the TARGETS (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
will not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the TARGETS Guarantee.
(c) Notwithstanding Section 3.l5(b), the Trust shall not, without
the consent of Holders of all of the Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if in the opinion of
a nationally recognized independent tax counsel experienced in such matters,
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to at least 3% of the capital
of the Trust, at the same time as the TARGETS are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the TARGETS, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form,
including a registration statement under Rule 415 or Rule 462(b) of the
Securities Act, including any pre-effective or post-
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effective amendments thereto, relating to the registration under the
Securities Act of the TARGETS;
(b) to determine the jurisdictions in which to take appropriate
action to qualify or register for sale all or part of the TARGETS and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such jurisdictions;
(c) to prepare for filing by the Trust an application to the Chicago
Board Options Exchange, any other national stock exchange or national
securities exchange for listing upon notice of issuance of any TARGETS;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
TARGETS under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of an underwriting agreement or
agreements providing for the sale of the TARGETS.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority of the
Common Securities voting as a class at a meeting of the Holders of the
Common Securities or by written consent of such holders in lieu of a
meeting,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, shall be an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
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SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall
be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as specified in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-5 and to the extent Rule 3a-5 requires
a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Institutional Trustee shall possess those
qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect specified in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
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(d) The TARGETS Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as specified in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Michael J. Day
Charles W. Scharf
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
The initial Institutional Trustee shall be:
The Chase Manhattan Bank
(b) Except as expressly specified in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee; and
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities, by vote of the Holders of
a Majority of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities or by written consent of such holders in
lieu of a meeting.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Institutional Trustee under
Section 5.3 (a "Successor Institutional Trustee") has been appointed and
has accepted such appointment by written instrument executed by such
Successor Institutional Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days
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after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Institutional Trustee or Delaware Trustee, as applicable, may petition
any court of competent jurisdiction for appointment of a Successor Institutional
Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.
(f) No Institutional Trustee or Delaware Trustee shall be Liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority
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of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. In
the event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as specified herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the TARGETS and the Common Securities in accordance with the preferences
specified in their respective terms. If and to the extent that (i) the Company
makes a payment in respect of the Forward Contract Certificates held by the
Institutional Trustee or (ii) the issuer of the Treasury Securities makes a
payment in respect of the Treasury Securities held by the Institutional Trustee
(the amount of any such payments described in the foregoing clauses (i) and (ii)
is referred to herein as a "Payment Amount"), the Institutional Trustee shall be
and is directed to make a distribution (a "Distribution") of the Payment Amount
to the Holders on a Pro Rata basis.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue (i)
one class of securities, known as the Targeted Growth Enhanced Terms
Securities(R) ("TARGETS") representing undivided beneficial interests in the
assets of the Trust having such terms as are specified in Annex I and (ii) one
class of common securities (the "Common Securities") representing undivided
beneficial interests in the assets of the Trust having such terms as are
specified in Annex I. The Trust shall issue no securities or other interests in
the assets of the Trust other than the TARGETS and the Common Securities.
(b) The Trust Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Trust Certificates so signed shall be delivered by the Trust,
such Trust Certificates nevertheless may be delivered as though the person who
signed such Trust Certificates had not ceased to be such Regular Trustee; and
any Trust Certificate may be signed on behalf of the Trust by any person who, at
the actual date of execution of such Security, shall be a Regular Trustee of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not a Regular Trustee. Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable.
(e) Every Person, by virtue of having become a Holder or a TARGETS
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor, the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Acceleration Event
pursuant to which the Trust is dissolved in accordance with the terms of
the Securities and the Accelerated Maturity Payment and the Treasury
Proceeds shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(v) upon distribution to the Holders of the Maturity Payment and the
final payment due in respect of the Treasury Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust specified in
Section 3.14; provided that so long as any TARGETS are outstanding and are
not held entirely by SSBH or an affiliate or related party, the Trust may
not voluntarily liquidate, dissolve, wind-up or terminate except in
connection with the occurrence of an Acceleration Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1 (a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions specified in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, TARGETS shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would fail to be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Trust Certificates.
The Regular Trustees shall provide for the registration of Trust
Certificates and of transfers of Trust Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges that may
be imposed in relation to it. The Regular Trustees hereby appoint the
Institutional Trustee the transfer agent for Trust Certificates. Upon surrender
for registration of transfer of any Trust Certificate, the Regular Trustees
shall cause one or more new Trust Certificates to be issued in the name of the
designated transferee or transferees. Every Trust Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Trust
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees. A transferee of a Trust Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Trust Certificate. By acceptance of a Trust Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Trust
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Trust Certificate and of the Securities represented by such
Trust Certificate for purposes of receiving Distributions and
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for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Trust Certificate
or in the Securities represented by such Trust Certificate on the part of any
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the TARGETS, the TARGETS
Certificates, on original issuance, will be issued in the form of one or more,
fully registered, global certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no TARGETS
Beneficial Owner will receive a definitive TARGETS Certificate representing such
TARGETS Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered TARGETS
Certificates (the "Definitive TARGETS Certificates") have been issued to the
TARGETS Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the TARGETS and
the sole holder of the Global Certificates and shall have no obligation to
the TARGETS Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the TARGETS Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such TARGETS Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and the Clearing
Agency shall receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. The Clearing Agency
will make book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the TARGETS Holders is
required under this Declaration, unless and until Definitive TARGETS
Certificates shall have been issued to the TARGETS Beneficial Owners pursuant to
Section 9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the TARGETS Holders to the Clearing Agency, and
upon doing so shall have no obligations to give any additional notice to the
TARGETS Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS, the Regular Trustees may, in
their sole discretion, appoint a successor Clearing Agency with respect to such
TARGETS.
SECTION 9.7 Definitive TARGETS Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the TARGETS and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the TARGETS;
then:
(x) Definitive TARGETS Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such TARGETS; and
(y) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions , the Regular Trustees shall
cause Definitive TARGETS Certificates to be delivered to TARGETS Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive TARGETS
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which TARGETS may be listed, or to conform
to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If:
(a) any mutilated Trust Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Trust
Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
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then, in the absence of notice that such Trust Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
denomination. In connection with the issuance of any new Trust Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly specified in this Declaration, the TARGETS
Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which return shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the TARGETS shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
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(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
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<PAGE> 43
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct
specified in paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Company if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees,
(ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Regular Trustees, counsel
or the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or TARGETS Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Company
or TARGETS Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Company and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
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<PAGE> 44
(vii) The Company may purchase and maintain insurance on behalf of
any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Company agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as specified in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have
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the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with United States generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, to the extent, if any, required by the Trust
Indenture Act, within 180 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Forward Contract Certificates or the Treasury Securities held
by the Institutional Trustee shall be made directly to the Institutional Trustee
Account and no other funds of the Trust shall be deposited in the Institutional
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made to any Holder, the Trust may reduce subsequent
Distributions to such Holder by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
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(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) if such proposed amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, an
opinion of counsel (who may be counsel to the Sponsor or the Trust
and which opinion shall be prepared at the expense of the Sponsor)
that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and
(ii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be specified in the terms of such
Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article
V to increase or decrease the number of and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority of the Common
Securities.
(g) Subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of the Declaration to
such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the TARGETS are
listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities
representing at least 10% of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more notices in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage specified in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange or national securities
market on which the TARGETS are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning
not less than the minimum amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot
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submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange or national securities market on which the TARGETS are then
listed or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail postage prepaid, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address specified below (or such other address as the Trust may
give notice of to the Holders of the Securities):
388 Greenwich Street
New York, New York 10013
(b) if given to the Delaware Trustee, at the mailing address
specified below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
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1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at the mailing address
specified below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor specified below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
388 Greenwich Street
New York, New York 10013
(e) if given to any other Holder, at the address specified on the
books and records of the Trust.
All notices provided for in this Declaration shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
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SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
---------------------------------------
Michael J. Day, as Regular Trustee
---------------------------------------
Charles W. Scharf, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Institutional Trustee
By:
-------------------------------------
Name:
Title:
SALOMON SMITH BARNEY HOLDINGS INC.
as Sponsor
By:
-------------------------------------
Name:
Title:
<PAGE> 53
SCHEDULE I
TREASURY SECURITIES
All forms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
<TABLE>
Par Zero-Coupon Strip Rate Price Cost
- --- ----------------- ---- ----- ----
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 54
ANNEX I
TERMS OF
THE TARGETS
AND
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 1999 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the TARGETS and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
specified in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. Designation and Number.
(a) TARGETS. Securities of the Trust are hereby designated for
the purposes of identification only as "Targeted Growth Enhanced Terms
Securities" (the "TARGETS"). The certificates evidencing the TARGETS shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange or
national securities market on which the TARGETS are listed.
(b) Common Securities. Securities of the Trust are hereby
designated for the purposes of identification only as "Trust Common Securities"
(the "Common Securities" and, together with the TARGETS, the "Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be a Pro Rata
portion of (i) all monies received by the Trust (a) as quarterly distributions
in respect of the Treasury Securities and (b) as Yield Enhancement Payments, if
any, with respect to the Forward Contract (together, the "Quarterly
Distributions"), (ii) the Maturity Payment or the Accelerated Maturity Payment,
as the case may be, with respect to the Forward Contract and (iii) upon the sale
of the Treasury Securities by the Institutional Trustee following an
Acceleration Event, the net proceeds received by the Trust (the "Treasury
Proceeds") from the sale of such Treasury Securities. A Distribution is payable
only to the extent that monies are received in respect of the Forward Contract
Certificates or Treasury Securities held by the Institutional Trustee on behalf
of the Trust and to the extent the Trust has funds available therefor.
(b) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record
I-1
<PAGE> 55
dates. While the TARGETS remain in book-entry only form, the relevant record
dates for Distributions of the Maturity Payment or Accelerated Maturity Payment
shall be one Business Day prior to the date such Maturity Payment or Accelerated
Maturity Payment, as the case may be, is received by the Trust with respect to
the Forward Contract Certificates. While the TARGETS remain in book-entry only
form, the relevant record dates for Quarterly Distributions shall be one
Business Day prior to the relevant payment dates, which payment dates shall
correspond to the dates on which payments are made in respect of, and in
accordance with the terms of, the Treasury Securities and the Forward Contract
Certificates. While the TARGETS remain in book-entry only form, the relevant
record date for Distributions of the Treasury Proceeds shall be the date that is
one Business Day prior to the date such Treasury Proceeds are received by the
Trust upon liquidation of the Treasury Securities. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the TARGETS will be made as described under the heading "Description
of the TARGETS -- Book-Entry Only Issuance" in the Prospectus dated ,
1999 (the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust with respect to the TARGETS. The relevant
record dates for the Common Securities shall be the same record dates as for the
TARGETS. If the TARGETS shall not continue to remain in book-entry only form,
the relevant record dates for any Distributions shall conform to the rules of
any securities exchange or national securities market on which they are listed
and, if none, shall be 15 days before the relevant payment dates, which payment
dates shall correspond to the dates on which payments are made in respect of,
and in accordance with the terms of, the Treasury Securities and the Forward
Contract Certificates and which record date shall be confirmed by the Regular
Trustees in writing to the Institutional Trustee. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of either the Company having failed to make a payment under the Forward
Contract or the issuer of the Treasury Securities having failed to make a
payment in respect of the Treasury Securities, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on a special record date which shall be the
date on which the amount of the defaulted Distributions are actually received by
the Trust. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
Except as otherwise provided herein, in the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the Holders
of the Securities on the date of the dissolution, winding-up or termination, as
the case may be, will be entitled to receive
I-2
<PAGE> 56
distributions out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors of the
Trust, on a Pro Rata basis.
4. Distribution Upon an Acceleration Event.
(a) If, at any time, a Tax Event, an Investment Company Event or a
Bankruptcy Event (each as defined herein and each an "Acceleration Event") shall
occur and be continuing, the Regular Trustees shall give written instructions to
the Institutional Trustee to (a) dissolve the Trust, liquidate the Treasury
Securities by soliciting at least three all cash bids (one of which may be from
an affiliate of the Sponsor) and selling and transferring the Treasury
Securities to the highest of the three bidders and, (b) after satisfaction of
creditors, cause to be distributed as soon as is practicable following the
occurrence of such Acceleration Event, to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, of (i)
the Accelerated Maturity Payment and (ii) the Treasury Proceeds.
"Tax Event" means that SSBH shall have requested and received and
shall have delivered to the Regular Trustees an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that there has
been (a) an amendment to, change in or announced proposed change in the laws (or
any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of SSBH or
any of its subsidiaries, or the Trust, or a threatened challenge asserted in
writing against any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Forward Contract
Certificates or the TARGETS, which amendment or change is adopted or which
proposed change, decision or pronouncement is announced or which action,
clarification or challenge occurs on or after the date of the Prospectus
relating to the original issuance of the TARGETS (collectively a "Tax Action"),
which Tax Action relates to any of the items described in (i) and (ii) below,
and that there is more than an insubstantial risk that (i) the Trust is, or will
be, subject to United States federal income tax with respect to income accrued
or received in respect of the Forward Contract or the Treasury Securities, or
(ii) the Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means that SSBH shall have requested and
received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent legal counsel experienced in such matters to
the effect that as a result of the occurrence on or after the date hereof of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
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<PAGE> 57
"Bankruptcy Event" means either of the following shall have
occurred: (i) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or (ii) the commencement by the Company of a voluntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action.
On and from the date fixed by the Regular Trustees for any
dissolution and distribution pursuant to this paragraph 4: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the TARGETS,
will receive its Pro Rata portion of (a) the Accelerated Maturity Payment and
(b) the Treasury Proceeds, in each case to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing TARGETS held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent the right to receive a Pro
Rata portion of (a) the Accelerated Maturity Payment and (b) the Treasury
Proceeds.
(b) Acceleration Event Distribution procedures will be as follows:
(i) Notice of any Acceleration Event (each, an "Acceleration
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Securities as promptly as practicable following the
occurrence of such Acceleration Event. Each Acceleration Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust.
(ii) If an Acceleration Event occurs, then (A) while the TARGETS are
in book-entry only form, with respect to the TARGETS, by 12:00 noon, New
York City time, on the Accelerated Maturity Date, provided that the
Company has paid the Institutional Trustee by 10:00 a.m. on such date an
amount of cash equal to the Accelerated Maturity Payment, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the Pro
Rata portion of the sum of the Accelerated Maturity Payment and the
Treasury Proceeds applicable to the TARGETS and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay
such Pro Rata portion of the sum of the Accelerated Maturity Payment and
the Treasury Proceeds to the Holders of the TARGETS, and (B) with respect
to TARGETS issued in definitive form and Common
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<PAGE> 58
Securities, provided that the Company has paid the Institutional Trustee
by 10:00 a.m. on such date an amount of cash equal to the Pro Rata amount
of the Accelerated Maturity Payment applicable to such TARGETS issued in
definitive form and Common Securities, the Institutional Trustee will pay
such Pro Rata portion of the Accelerated Maturity Payment and a Pro Rata
portion of the Treasury Proceeds to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the relevant record date. If any Accelerated
Maturity Date is not a Business Day, then payment of the sum of the
Accelerated Maturity Payment and the Treasury Proceeds payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such Accelerated Maturity Date.
(iii) Acceleration Notices shall be sent by the Regular Trustees on
behalf of the Trust to (A) in respect of the TARGETS, DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global TARGETS
Certificates have been issued or, if Definitive TARGETS Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may at any time and from time to time purchase outstanding
TARGETS by tender, in the open market or by private agreement.
5. Voting Rights - TARGETS.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the TARGETS will have no
voting rights.
(b) Subject to the requirements specified in this paragraph, the
Holders of a Majority of the TARGETS, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or direct the exercise of any trust or
power conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee, as holder of the Forward Contract
Certificates and the Treasury Securities, to (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercise any trust or power conferred on the Indenture Trustee with
respect to the Forward Contract Certificates, (ii) direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or exercise any trust or power conferred on the Institutional Trustee
with respect to the Treasury Securities, (iii) waive the consequences of any
Acceleration Event under the Indenture that are waivable under the Indenture,
(iv) exercise any right to rescind or annul a declaration that the Accelerated
Maturity Payment shall be due and payable, or (v) consent to any amendment,
modification or termination of the Indenture or the Forward Contract where such
consent shall be required, provided, however, that where a consent or action
would require the
I-5
<PAGE> 59
consent or act of Holders of more than a majority (determined in accordance with
the Indenture) of the outstanding Forward Contract Certificates (a "Super
Majority"), such consent or action shall not be effective until Holders of at
least the proportion of the TARGETS that the relevant Super Majority represents
of the aggregate beneficial interests in the Forward Contract represented by all
the TARGETS outstanding shall have consented to such action or provided such
consent. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Forward Contract Certificates and the Treasury Securities, shall
not take any of the actions described in clauses (i), (ii), (iii), (iv) or (v)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If the Institutional Trustee fails to enforce its rights under the
Forward Contract, any Holder of TARGETS may directly institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Forward Contract without first instituting a legal proceeding against
the Institutional Trustee or any other Person or entity. If the Company fails to
pay amounts owed on the Forward Contract on the date such amounts are otherwise
payable, then a Holder of TARGETS may also directly institute a proceeding for
enforcement of payment to such Holder (a "Direct Action") of the amounts owed in
respect of such Holder's Pro Rata interest in the Forward Contract on or after
the due date specified in the Forward Contract without first (i) directing the
Institutional Trustee to enforce the terms of the Forward Contract or (ii)
instituting a legal proceeding directly against the Company to enforce the
Institutional Trustee's rights under the Forward Contract. Except as provided in
the preceding sentence, the Holders of TARGETS will not be able to exercise
directly any other remedy available to the Holders of the Forward Contract
Certificates. In connection with such Direct Action, SSBH will be subrogated to
the rights of such Holder of TARGETS under the Declaration to the extent of any
payment made by SSBH to such Holder of TARGETS in such Direct Action.
Any required approval or direction of Holders of TARGETS may be
given at a separate meeting of Holders of TARGETS convened for such purpose, at
a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
TARGETS are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
TARGETS. Each such notice will include a statement setting forth (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the TARGETS will be required
for the Trust to (i) cancel TARGETS Certificates, (ii) to make Distributions or
(iii) to distribute any Quarterly Distributions, the Maturity Payment, the
Accelerated Maturity Payment and the Treasury Proceeds held by the Institutional
Trustee, in each case in accordance with the Declaration and the terms of the
Securities.
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<PAGE> 60
Notwithstanding that Holders of TARGETS are entitled to vote or
consent under any of the circumstances described above, any of the TARGETS that
are owned by the Sponsor or any of its Affiliates shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Acceleration Event with respect to the TARGETS has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority of the Common Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Forward Contract Certificates and the Treasury
Securities, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred on the Institutional Trustee with respect to the
Forward Contract, (ii) direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee with respect to
the Treasury Securities, (iii) waive the consequences of any Acceleration Event
under the Indenture that are waivable under the Indenture, (iv) exercise any
right to rescind or annul a declaration that the Accelerated Maturity Payment
shall be due and payable or (v) consent to any amendment, modification or
termination of the Indenture or Forward Contract Certificates where such consent
shall be required, provided that where a consent or action under the Indenture
would require the consent or act of the Holders of a Super Majority of the
Forward Contract Certificates, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion of the Common Securities that the relevant Super Majority
represents of the aggregate beneficial interests in the Forward Contract
represented by all the Common Securities outstanding. Pursuant to this paragraph
6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the TARGETS. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the Indenture Trustee as
specified above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the
I-7
<PAGE> 61
Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to (i) cancel Common Securities, (ii) to make
Distributions, (iii) to liquidate the Treasury Securities or (iv) to distribute
any Quarterly Distribution, the Maturity Payment, the Accelerated Maturity
Payment or the Treasury Proceeds to Holders of the Securities, in each case in
accordance with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the TARGETS or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority of such
class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Forward Contract Certificates is required under the Indenture with
respect to any amendment, modification or termination of the Indenture or the
Forward Contract Certificates, the Institutional Trustee shall request the
written direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority of the
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of the holders of a Super
Majority of the Forward Contract Certificates, the Institutional Trustee may
only give such consent at the direction of the Holders of a Super
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<PAGE> 62
Majority of the Securities outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this paragraph 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean proportionately to each
Holder of Securities according to the aggregate beneficial interests in the
assets of the Trust represented by the Securities held by the relevant Holder in
relation to the aggregate beneficial interests in the assets of the Trust
represented by all Securities outstanding unless, in relation to a payment, an
Acceleration Event under the Declaration has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the TARGETS proportionately according to the aggregate beneficial
interests in the assets of the Trust represented by the TARGETS held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all TARGETS outstanding, and only after satisfaction of
all amounts owed to the Holders of the TARGETS, to each Holder of Common
Securities proportionately according to the aggregate beneficial interests in
the assets of the Trust represented by the Common Securities held by the
relevant Holder relative to the aggregate beneficial interests in the assets of
the Trust represented by all Common Securities outstanding.
9. Ranking.
The TARGETS rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Acceleration Event occurs
and is continuing in respect of the Forward Contract Certificates held by the
Institutional Trustee, no payments in respect of Distributions on, or payments
upon liquidation or otherwise with respect to, the Common Securities shall be
made until the Holders of TARGETS shall be paid in full the Distributions and
payments upon liquidation or otherwise to which they are entitled at the time.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
TARGETS to be listed on the .
11. Acceptance of Securities Guarantee, the Indenture and the
Treasury Securities.
Each Holder of TARGETS and Common Securities, by the acceptance
thereof, agrees to the provisions of the TARGETS Guarantee, and to the
provisions of the Indenture and the Treasury Securities.
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12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge on written request to the
Sponsor at its principal place of business.
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<PAGE> 64
EXHIBIT A-1
FORM OF TARGETS(R) CERTIFICATE
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE DECLARATION AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Securities
1
CUSIP NO.
Certificate Evidencing Securities
of
TARGETS Trust VI
Targeted Growth Enhanced Terms Securities
TARGETS TRUST VI, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of ( ) securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Targeted Growth Enhanced Terms Securities (the "TARGETS"). The
TARGETS are transferable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper
A1-1
<PAGE> 65
form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the TARGETS are specified in, and
this certificate and the TARGETS represented hereby are issued and shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of , 1999, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the TARGETS as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the TARGETS Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the TARGETS
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate,
is deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the TARGETS Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the TARGETS as a beneficial interest in a
pro rata portion of (i) the Treasury Securities and (ii) a cash settled forward
purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
----------------------------------------
Michael J. Day, as Regular Trustee
----------------------------------------
Charles W. Scharf, as Regular Trustee
A1-2
<PAGE> 66
-----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this TARGETS
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
__________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________
_______________________________________________________________
______________________________________________________ agent to transfer this
TARGETS Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ______________________
Signature:__________________
(Sign exactly as your name appears on the other side of this TARGETS
Certificate)
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<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SPECIFIED IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Securities
C-1
Certificate Evidencing Securities
of
TARGETS Trust VI
Trust Common Securities
TARGETS TRUST VI, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Salomon Smith
Barney Holdings Inc., a Delaware corporation (the "Holder"), is the registered
owner of common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the Trust Common Securities (the
"Common Securities"). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney upon surrender
of this certificate duly endorsed and in proper form for transfer and
satisfaction of the other conditions specified in the Declaration (as defined
below), including, without limitation, Section 9.1 thereof. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of , 1999, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as specified in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of (i) the Indenture and the Forward
Contract, (ii) the Treasury Securities and (iii) the Common Securities
Guarantee.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to characterize the Common Securities as a beneficial
interest in a pro rata portion of (i) the Treasury Securities and (ii) a cash
settled forward purchase contract.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1999.
______________________________________
Michael J. Day, as Regular Trustee
______________________________________
Charles W. Scharf, as Regular Trustee
A2-1
<PAGE> 68
______________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
__________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
______________________________ agent to transfer this TARGETS Certificate on
the books of the Trust. The agent may substitute another to act for him or
her.
Date:________________________
Signature:___________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-2
<PAGE> 69
EXHIBIT B
SPECIMEN OF FORWARD CONTRACT CERTIFICATE
B-1
<PAGE> 70
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4(k)
===========================
FORM OF
TARGETED GROWTH ENHANCED TERMS SECURITIES
GUARANTEE AGREEMENT
TARGETS TRUST II
Dated as of , 1999
===========================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...............................4
SECTION 2.2 Lists of Holders of Securities.................................4
SECTION 2.3 Reports by the TARGETS Guarantee Trustee.......................5
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee..................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Events of Default; Waiver......................................5
SECTION 2.7 Event of Default Notice.......................................5
SECTION 2.8 Conflicting Interests..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee.............6
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee....................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.........10
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility........................10
SECTION 4.2 Appointment. Removal and Resignation of TARGETS Guarantee
Trustees....................................................10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.....................................................11
SECTION 5.2 Waiver of Notice and Demand...................................11
SECTION 5.3 Obligations Not Affected......................................12
SECTION 5.4 Rights of Holders.............................................12
SECTION 5.5 Guarantee of Payment..........................................13
SECTION 5.6 Subrogation...................................................13
SECTION 5.7 Independent Obligations.......................................13
<PAGE> 3
ARTICLE VI
TERMINATION
SECTION 6.1 Termination...................................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation...................................................14
SECTION 7.2 Indemnification...............................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns........................................15
SECTION 8.2 Amendments....................................................15
SECTION 8.3 Consolidations and Mergers....................................15
SECTION 8.4 Notices.......................................................15
SECTION 8.5 Benefit.......................................................16
SECTION 8.6 Governing Law.................................................16
ii
<PAGE> 4
This GUARANTEE AGREEMENT (the "TARGETS Guarantee"), dated as of
, 1999, is executed and delivered by Salomon Smith Barney
Holdings Inc., a Delaware corporation (together with any successors by way of
merger the "Guarantor"), and The Chase Manhattan Bank, as trustee (the "TARGETS
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the TARGETS (as defined herein) of TARGETS Trust II, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of , 1999 among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof preferred securities designated the
Targeted Growth Enhanced Terms Securities(R) (the "TARGETS");
WHEREAS, as incentive for the Holders to purchase the TARGETS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this TARGETS Guarantee, to pay to the Holders the Guarantee Payments
(as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TARGETS, which purchase the Guarantor hereby agrees shall benefit the Guarantor,
the Guarantor executes and delivers this TARGETS Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this TARGETS Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this TARGETS Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) A term defined anywhere in this TARGETS Guarantee has the same
meaning throughout;
(c) all references to "the TARGETS Guarantee" or "this TARGETS
Guarantee" are to this TARGETS Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this TARGETS Guarantee to Articles and
Sections are to Articles and Sections of this TARGETS
Guarantee, unless otherwise specified;
<PAGE> 5
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this TARGETS Guarantee, unless otherwise defined
in this TARGETS Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Accelerated Maturity Date" has the meaning specified in the
Declaration.
"Accelerated Maturity Payment" has the meaning specified in the
Declaration.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are permitted or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the TARGETS Guarantee
Trustee at which the corporate trust business of the TARGETS Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of TARGETS.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this TARGETS Guarantee.
"Forward Contract" means the Forward Contract of the Guarantor
issuable under the Indenture, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TARGETS, to the extent not paid or made
by the Issuer: (i) any Maturity Payment that is required to be made in respect
of the TARGETS, to the extent the Issuer has funds available therefor, (ii) any
Accelerated Maturity Payment that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, (iii) any
Quarterly Distribution that is required to be made in respect of the TARGETS, to
the extent the Issuer has funds available therefor, (iv) any distribution of
Treasury Proceeds that is required to be made in respect of the TARGETS, to the
extent the Issuer has funds available therefor, and (v) any other remaining
assets of the Issuer payable to the Holders of the TARGETS upon liquidation of
the Issuer.
2
<PAGE> 6
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any TARGETS; provided, however, that in determining
whether the holders of the requisite percentage of TARGETS have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the TARGETS Guarantee Trustee, any
Affiliate of the TARGETS Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the TARGETS Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1999, between
the Guarantor and The Chase Manhattan Bank, as trustee, and any indenture
supplemental thereto pursuant to which the securities representing interests in
a Forward Contract (defined in the Indenture as the "Securities") are to be
issued to the Institutional Trustee of the Issuer.
"Majority of the TARGETS" means, except as provided by the Trust
Indenture Act, a vote by Holder(s), voting separately as a class, holding
TARGETS representing more than 50% of the aggregate beneficial interests
represented by all outstanding TARGETS.
"Maturity Date" has the meaning specified in the Declaration.
"Maturity Payment" has the meaning specified in the Declaration.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this TARGETS Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Quarterly Distribution" has the meaning specified in the
Declaration.
3
<PAGE> 7
"Responsible Officer" means, with respect to the TARGETS Guarantee
Trustee, any officer within the Corporate Trust Office of the TARGETS Guarantee
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the TARGETS Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, in any case, that has direct responsibility for the
administration of this TARGETS Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor TARGETS Guarantee Trustee" means a successor TARGETS
Guarantee Trustee possessing the qualifications to act as TARGETS Guarantee
Trustee under Section 4.1.
"TARGETS Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor TARGETS Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this TARGETS Guarantee and thereafter means
each such Successor TARGETS Guarantee Trustee.
"Treasury Proceeds" has the meaning specified in the Indenture.
"Treasury Securities" has the meaning specified in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This TARGETS Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this TARGETS Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this TARGETS
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the TARGETS Guarantee Trustee with a
list, in such form as the TARGETS Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within one Business Day after January 1 and June 30 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the TARGETS Guarantee Trustee; provided that the Guarantor
shall
4
<PAGE> 8
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the TARGETS
Guarantee Trustee by the Guarantor. The TARGETS Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The TARGETS Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312 (b) of the Trust Indenture Act.
SECTION 2.3 Reports by the TARGETS Guarantee Trustee
Within 60 days after April 15 of each year, the TARGETS Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The TARGETS Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee
The Guarantor shall provide to the TARGETS Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the TARGETS Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this TARGETS Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority of TARGETS may, by vote, on behalf of the
Holders of all of the TARGETS, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this TARGETS Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The TARGETS Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the TARGETS Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided that the
5
<PAGE> 9
TARGETS Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the TARGETS Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The TARGETS Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the TARGETS Guarantee Trustee shall
have received written notice of such Event of Default or a Responsible Officer
of the TARGETS Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
TARGETS Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee
(a) This TARGETS Guarantee shall be held by the TARGETS Guarantee
Trustee for the benefit of the Holders, and the TARGETS Guarantee Trustee shall
not transfer its right, title and interest in this TARGETS Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor TARGETS Guarantee Trustee on acceptance by such Successor
TARGETS Guarantee Trustee of its appointment to act as Successor TARGETS
Guarantee Trustee. The right, title and interest of the TARGETS Guarantee
Trustee shall automatically vest in any Successor TARGETS Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor TARGETS Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the TARGETS Guarantee Trustee has occurred and is continuing, the TARGETS
Guarantee Trustee shall enforce this TARGETS Guarantee for the benefit of the
Holders of the TARGETS.
(c) The TARGETS Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this TARGETS Guarantee, and no implied covenants shall be read into
this TARGETS Guarantee against the TARGETS Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee shall exercise such of the rights and
powers vested in it by this TARGETS Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
6
<PAGE> 10
(d) No provision of this TARGETS Guarantee shall be construed to
relieve the TARGETS Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the TARGETS Guarantee
Trustee shall be determined solely by the express provisions of this
TARGETS Guarantee, and the TARGETS Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this TARGETS Guarantee, and no implied
covenants or obligations shall be read into this TARGETS Guarantee
against the TARGETS Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
TARGETS Guarantee Trustee, the TARGETS Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the TARGETS Guarantee Trustee and
conforming to the requirements of this TARGETS Guarantee, but in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the TARGETS
Guarantee Trustee, the TARGETS Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this TARGETS Guarantee;
(ii) the TARGETS Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
TARGETS Guarantee Trustee, unless it shall be proved that the TARGETS
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the TARGETS Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
of the TARGETS relating to the time, method and place of conducting any
proceeding for any remedy available to the TARGETS Guarantee Trustee, or
exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee;
(iv) no provision of this TARGETS Guarantee shall require the
TARGETS Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the TARGETS
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this TARGETS Guarantee or indemnity, reasonably satisfactory
to the TARGETS Guarantee Trustee, against such risk or liability is not
reasonably assured to it;
7
<PAGE> 11
(v) The granting of any right to the TARGETS Guarantee Trustee
hereunder shall not, subject to the following, be deemed to impose on the
TARGETS Guarantee Trustee an obligation to exercise such rights subject to
3.1(d)(vi); and
(vi) the TARGETS Guarantee Trustee shall not be obligated to
exercise any remedy or take any action hereunder unless directed to do so
by the holders of a Majority of the TARGETS and shall have no liability
for its failure to act pending receipt by it of any such direction.
This Section 3.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The TARGETS Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this TARGETS Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this TARGETS
Guarantee, the TARGETS Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the TARGETS Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The TARGETS Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The TARGETS Guarantee Trustee may consult with counsel,
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The TARGETS Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this TARGETS Guarantee from
any court of competent jurisdiction.
8
<PAGE> 12
(vi) The TARGETS Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
TARGETS Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the TARGETS Guarantee Trustee such security
and indemnity, reasonably satisfactory to the TARGETS Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and
the expenses of the TARGETS Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the TARGETS Guarantee Trustee; provided that nothing
contained in this Section 3.2(a) (vi) shall be taken to relieve the
TARGETS Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
TARGETS Guarantee.
(vii) The TARGETS Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the TARGETS Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The TARGETS Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
TARGETS Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the TARGETS Guarantee Trustee or its
agents hereunder shall bind the Holders of the TARGETS, and the signature
of the TARGETS Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be required
to inquire as to the authority of the TARGETS Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
TARGETS Guarantee, both of which shall be conclusively evidenced by the
TARGETS Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this TARGETS Guarantee
the TARGETS Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the TARGETS Guarantee Trustee (i) may request
instructions from the Holders of a Majority of the TARGETS, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this TARGETS Guarantee shall be deemed to impose
any duty or obligation on the TARGETS Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be
9
<PAGE> 13
illegal, or in which the TARGETS Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the TARGETS Guarantee Trustee shall be construed to be a
duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the TARGETS Guarantee Trustee does not assume
any responsibility for their correctness. The TARGETS Guarantee Trustee makes no
representation as to the validity or sufficiency of this TARGETS Guarantee.
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility
(a) There shall at all times be a TARGETS Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the TARGETS Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the TARGETS Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the TARGETS Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the TARGETS Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees
(a) Subject to Section 4.2(b), the TARGETS Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
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<PAGE> 14
(b) The TARGETS Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor TARGETS Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor TARGETS Guarantee Trustee and delivered to the Guarantor.
(c) The TARGETS Guarantee Trustee appointed to office shall hold
office until a Successor TARGETS Guarantee Trustee shall have been appointed or
until its removal or resignation. The TARGETS Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the TARGETS Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor TARGETS
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor TARGETS Guarantee Trustee and
delivered to the Guarantor and the resigning TARGETS Guarantee Trustee.
(d) If no Successor TARGETS Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning TARGETS Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor TARGETS Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor TARGETS Guarantee Trustee.
(e) No TARGETS Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor TARGETS Guarantee Trustee.
(f) Upon termination of this TARGETS Guarantee or removal or
resignation of the TARGETS Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the TARGETS Guarantee Trustee all amounts accrued and
owing to such TARGETS Guarantee Trustee to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this TARGETS
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the
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<PAGE> 15
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this TARGETS Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TARGETS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Maturity Payment, Accelerated Maturity Payment, Quarterly
Distributions, Treasury Proceeds or any other sums payable under the terms of
the TARGETS or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the TARGETS;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TARGETS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the TARGETS;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority of the TARGETS have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the TARGETS Guarantee Trustee in respect of this TARGETS Guarantee
or exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee.
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<PAGE> 16
(b) If the TARGETS Guarantee Trustee fails to enforce its rights
under this TARGETS Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the TARGETS Guarantee Trustee's
rights under this TARGETS Guarantee, without first instituting a legal
proceeding against the Issuer, the TARGETS Guarantee Trustee or any other Person
or entity.
(c) A Holder of TARGETS may also directly institute a legal
proceeding against the Guarantor to enforce such Holder's right to receive
payment under this TARGETS Guarantee without first (i) directing the TARGETS
Guarantee Trustee to enforce the terms of this TARGETS Guarantee or (ii)
instituting a legal proceeding directly against the Issuer or any other Person
or entity.
SECTION 5.5 Guarantee of Payment
This TARGETS Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TARGETS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this TARGETS Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this TARGETS Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this TARGETS Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TARGETS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this TARGETS Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination
This TARGETS Guarantee shall terminate upon the earliest to occur of
(i) full payment of the Maturity Payment and the final payment due in respect of
the Treasury Securities, (ii) full payment of the Accelerated Maturity Payment
and the distribution of the Treasury Proceeds on an Accelerated Maturity Date to
the Holders of the TARGETS and the Common Securities as of the Record Date (as
defined in the Indenture) and (iii) full payment of the
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<PAGE> 17
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this TARGETS Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid under the TARGETS or under this
TARGETS Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this TARGETS
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
TARGETS Guarantee or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 7.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the termination of this TARGETS Guarantee.
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<PAGE> 18
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns
All guarantees and agreements contained in this TARGETS Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the TARGETS then
outstanding.
SECTION 8.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
TARGETS Guarantee may be amended only with the prior approval of the Holders of
not less than a Majority of the TARGETS. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 8.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation; provided that in any such case (i) either the Guarantor shall be
the continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia and such successor
corporation shall expressly assume the due and punctual payment of the Guarantee
Payments described herein and the due and punctual performance and observance of
all of the covenants and conditions of this TARGETS Guarantee, and (ii) the
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 8.4 Notices
All notices provided for in this TARGETS Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail postage prepaid as follows:
(a) If given to the TARGETS Guarantee Trustee, at the TARGETS
Guarantee Trustee's mailing address set forth below (or such other address as
the TARGETS Guarantee Trustee may give notice of to the Holders)
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders)
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<PAGE> 19
388 Greenwich Street
New York, New York 10013
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices provided for in this TARGETS Guarantee shall be deemed
to have been given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.5 Benefit
This TARGETS Guarantee is solely for the benefit of the Holders of
the TARGETS and, subject to Section 3.l(a), is not separately transferable from
the TARGETS.
SECTION 8.6 Governing Law
THIS TARGETS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
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<PAGE> 20
THIS TARGETS GUARANTEE is executed as of the day and year first
above written.
SALOMON SMITH BARNEY HOLDINGS INC.
as Guarantor
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
TARGETS Guarantee Trustee
By:
-------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(l)
==============================
FORM OF
TARGETED GROWTH ENHANCED TERMS SECURITIES
GUARANTEE AGREEMENT
TARGETS TRUST III
Dated as of , 1999
==============================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...............................4
SECTION 2.2 Lists of Holders of Securities.................................4
SECTION 2.3 Reports by the TARGETS Guarantee Trustee.......................5
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee..................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Events of Default; Waiver......................................5
SECTION 2.7 Event of Default Notice.......................................5
SECTION 2.8 Conflicting Interests..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee.............6
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee....................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.........10
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility........................10
SECTION 4.2 Appointment. Removal and Resignation of TARGETS Guarantee
Trustees....................................................10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.....................................................11
SECTION 5.2 Waiver of Notice and Demand...................................11
SECTION 5.3 Obligations Not Affected......................................12
SECTION 5.4 Rights of Holders.............................................12
SECTION 5.5 Guarantee of Payment..........................................13
SECTION 5.6 Subrogation...................................................13
SECTION 5.7 Independent Obligations.......................................13
<PAGE> 3
ARTICLE VI
TERMINATION
SECTION 6.1 Termination...................................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation...................................................14
SECTION 7.2 Indemnification...............................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns........................................15
SECTION 8.2 Amendments....................................................15
SECTION 8.3 Consolidations and Mergers....................................15
SECTION 8.4 Notices.......................................................15
SECTION 8.5 Benefit.......................................................16
SECTION 8.6 Governing Law.................................................16
ii
<PAGE> 4
This GUARANTEE AGREEMENT (the "TARGETS Guarantee"), dated as of
, 1999, is executed and delivered by Salomon Smith Barney Holdings
Inc., a Delaware corporation (together with any successors by way of merger the
"Guarantor"), and The Chase Manhattan Bank, as trustee (the "TARGETS Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the TARGETS (as defined herein) of TARGETS Trust III, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of , 1999 among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof preferred securities designated the Targeted
Growth Enhanced Terms Securities(R) (the "TARGETS");
WHEREAS, as incentive for the Holders to purchase the TARGETS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this TARGETS Guarantee, to pay to the Holders the Guarantee Payments
(as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TARGETS, which purchase the Guarantor hereby agrees shall benefit the Guarantor,
the Guarantor executes and delivers this TARGETS Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this TARGETS Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this TARGETS Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) A term defined anywhere in this TARGETS Guarantee has the same
meaning throughout;
(c) all references to "the TARGETS Guarantee" or "this TARGETS
Guarantee" are to this TARGETS Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this TARGETS Guarantee to Articles and
Sections are to Articles and Sections of this TARGETS
Guarantee, unless otherwise specified;
<PAGE> 5
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this TARGETS Guarantee, unless otherwise defined
in this TARGETS Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Accelerated Maturity Date" has the meaning specified in the
Declaration.
"Accelerated Maturity Payment" has the meaning specified in the
Declaration.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are permitted or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the TARGETS Guarantee
Trustee at which the corporate trust business of the TARGETS Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of TARGETS.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this TARGETS Guarantee.
"Forward Contract" means the Forward Contract of the Guarantor
issuable under the Indenture, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TARGETS, to the extent not paid or made
by the Issuer: (i) any Maturity Payment that is required to be made in respect
of the TARGETS, to the extent the Issuer has funds available therefor, (ii) any
Accelerated Maturity Payment that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, (iii) any
Quarterly Distribution that is required to be made in respect of the TARGETS, to
the extent the Issuer has funds available therefor, (iv) any distribution of
Treasury Proceeds that is required to be made in respect of the TARGETS, to the
extent the Issuer has funds available therefor, and (v) any other remaining
assets of the Issuer payable to the Holders of the TARGETS upon liquidation of
the Issuer.
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<PAGE> 6
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any TARGETS; provided, however, that in determining
whether the holders of the requisite percentage of TARGETS have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the TARGETS Guarantee Trustee, any
Affiliate of the TARGETS Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the TARGETS Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1999, between
the Guarantor and The Chase Manhattan Bank, as trustee, and any indenture
supplemental thereto pursuant to which the securities representing interests in
a Forward Contract (defined in the Indenture as the "Securities") are to be
issued to the Institutional Trustee of the Issuer.
"Majority of the TARGETS" means, except as provided by the Trust
Indenture Act, a vote by Holder(s), voting separately as a class, holding
TARGETS representing more than 50% of the aggregate beneficial interests
represented by all outstanding TARGETS.
"Maturity Date" has the meaning specified in the Declaration.
"Maturity Payment" has the meaning specified in the Declaration.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this TARGETS Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Quarterly Distribution" has the meaning specified in the
Declaration.
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<PAGE> 7
"Responsible Officer" means, with respect to the TARGETS Guarantee
Trustee, any officer within the Corporate Trust Office of the TARGETS Guarantee
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the TARGETS Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, in any case, that has direct responsibility for the
administration of this TARGETS Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor TARGETS Guarantee Trustee" means a successor TARGETS
Guarantee Trustee possessing the qualifications to act as TARGETS Guarantee
Trustee under Section 4.1.
"TARGETS Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor TARGETS Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this TARGETS Guarantee and thereafter means
each such Successor TARGETS Guarantee Trustee.
"Treasury Proceeds" has the meaning specified in the Indenture.
"Treasury Securities" has the meaning specified in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This TARGETS Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this TARGETS Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this TARGETS
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the TARGETS Guarantee Trustee with a
list, in such form as the TARGETS Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within one Business Day after January 1 and June 30 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the TARGETS Guarantee Trustee; provided that the Guarantor
shall
4
<PAGE> 8
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the TARGETS
Guarantee Trustee by the Guarantor. The TARGETS Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The TARGETS Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312 (b) of the Trust Indenture Act.
SECTION 2.3 Reports by the TARGETS Guarantee Trustee
Within 60 days after April 15 of each year, the TARGETS Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The TARGETS Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee
The Guarantor shall provide to the TARGETS Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the TARGETS Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this TARGETS Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority of TARGETS may, by vote, on behalf of the
Holders of all of the TARGETS, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this TARGETS Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The TARGETS Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the TARGETS Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided that the
5
<PAGE> 9
TARGETS Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the TARGETS Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The TARGETS Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the TARGETS Guarantee Trustee shall
have received written notice of such Event of Default or a Responsible Officer
of the TARGETS Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
TARGETS Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee
(a) This TARGETS Guarantee shall be held by the TARGETS Guarantee
Trustee for the benefit of the Holders, and the TARGETS Guarantee Trustee shall
not transfer its right, title and interest in this TARGETS Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor TARGETS Guarantee Trustee on acceptance by such Successor
TARGETS Guarantee Trustee of its appointment to act as Successor TARGETS
Guarantee Trustee. The right, title and interest of the TARGETS Guarantee
Trustee shall automatically vest in any Successor TARGETS Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor TARGETS Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the TARGETS Guarantee Trustee has occurred and is continuing, the TARGETS
Guarantee Trustee shall enforce this TARGETS Guarantee for the benefit of the
Holders of the TARGETS.
(c) The TARGETS Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this TARGETS Guarantee, and no implied covenants shall be read into
this TARGETS Guarantee against the TARGETS Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee shall exercise such of the rights and
powers vested in it by this TARGETS Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
6
<PAGE> 10
(d) No provision of this TARGETS Guarantee shall be construed to
relieve the TARGETS Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the TARGETS Guarantee
TARGETS Guarantee, and the TARGETS Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this TARGETS Guarantee, and no implied
covenants or obligations shall be read into this TARGETS Guarantee
against the TARGETS Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
TARGETS Guarantee Trustee, the TARGETS Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the TARGETS Guarantee Trustee and
conforming to the requirements of this TARGETS Guarantee, but in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the TARGETS
Guarantee Trustee, the TARGETS Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this TARGETS Guarantee;
(ii) the TARGETS Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
TARGETS Guarantee Trustee, unless it shall be proved that the TARGETS
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the TARGETS Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
of the TARGETS relating to the time, method and place of conducting any
proceeding for any remedy available to the TARGETS Guarantee Trustee, or
exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee;
(iv) no provision of this TARGETS Guarantee shall require the
TARGETS Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the TARGETS
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this TARGETS Guarantee or indemnity, reasonably satisfactory
to the TARGETS Guarantee Trustee, against such risk or liability is not
reasonably assured to it;
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<PAGE> 11
(v) The granting of any right to the TARGETS Guarantee Trustee
hereunder shall not, subject to the following, be deemed to impose on the
TARGETS Guarantee Trustee an obligation to exercise such rights subject to
3.1(d)(vi); and
(vi) the TARGETS Guarantee Trustee shall not be obligated to
exercise any remedy or take any action hereunder unless directed to do so
by the holders of a Majority of the TARGETS and shall have no liability
for its failure to act pending receipt by it of any such direction.
This Section 3.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The TARGETS Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this TARGETS Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this TARGETS
Guarantee, the TARGETS Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the TARGETS Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The TARGETS Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The TARGETS Guarantee Trustee may consult with counsel,
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The TARGETS Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this TARGETS Guarantee from
any court of competent jurisdiction.
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<PAGE> 12
(vi) The TARGETS Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
TARGETS Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the TARGETS Guarantee Trustee such security
and indemnity, reasonably satisfactory to the TARGETS Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and
the expenses of the TARGETS Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the TARGETS Guarantee Trustee; provided that nothing
contained in this Section 3.2(a) (vi) shall be taken to relieve the
TARGETS Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
TARGETS Guarantee.
(vii) The TARGETS Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the TARGETS Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The TARGETS Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
TARGETS Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the TARGETS Guarantee Trustee or its
agents hereunder shall bind the Holders of the TARGETS, and the signature
of the TARGETS Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be required
to inquire as to the authority of the TARGETS Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
TARGETS Guarantee, both of which shall be conclusively evidenced by the
TARGETS Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this TARGETS Guarantee
the TARGETS Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the TARGETS Guarantee Trustee (i) may request
instructions from the Holders of a Majority of the TARGETS, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this TARGETS Guarantee shall be deemed to impose
any duty or obligation on the TARGETS Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be
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<PAGE> 13
illegal, or in which the TARGETS Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the TARGETS Guarantee Trustee shall be construed to be a
duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the TARGETS Guarantee Trustee does not assume
any responsibility for their correctness. The TARGETS Guarantee Trustee makes no
representation as to the validity or sufficiency of this TARGETS Guarantee.
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility
(a) There shall at all times be a TARGETS Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the TARGETS Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the TARGETS Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the TARGETS Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the TARGETS Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees
(a) Subject to Section 4.2(b), the TARGETS Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
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<PAGE> 14
(b) The TARGETS Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor TARGETS Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor TARGETS Guarantee Trustee and delivered to the Guarantor.
(c) The TARGETS Guarantee Trustee appointed to office shall hold
office until a Successor TARGETS Guarantee Trustee shall have been appointed or
until its removal or resignation. The TARGETS Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the TARGETS Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor TARGETS
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor TARGETS Guarantee Trustee and
delivered to the Guarantor and the resigning TARGETS Guarantee Trustee.
(d) If no Successor TARGETS Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning TARGETS Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor TARGETS Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor TARGETS Guarantee Trustee.
(e) No TARGETS Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor TARGETS Guarantee Trustee.
(f) Upon termination of this TARGETS Guarantee or removal or
resignation of the TARGETS Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the TARGETS Guarantee Trustee all amounts accrued and
owing to such TARGETS Guarantee Trustee to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this TARGETS
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the
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<PAGE> 15
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this TARGETS Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TARGETS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Maturity Payment, Accelerated Maturity Payment, Quarterly
Distributions, Treasury Proceeds or any other sums payable under the terms of
the TARGETS or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the TARGETS;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TARGETS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the TARGETS;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority of the TARGETS have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the TARGETS Guarantee Trustee in respect of this TARGETS Guarantee
or exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee.
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(b) If the TARGETS Guarantee Trustee fails to enforce its rights
under this TARGETS Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the TARGETS Guarantee Trustee's
rights under this TARGETS Guarantee, without first instituting a legal
proceeding against the Issuer, the TARGETS Guarantee Trustee or any other Person
or entity.
(c) A Holder of TARGETS may also directly institute a legal
proceeding against the Guarantor to enforce such Holder's right to receive
payment under this TARGETS Guarantee without first (i) directing the TARGETS
Guarantee Trustee to enforce the terms of this TARGETS Guarantee or (ii)
instituting a legal proceeding directly against the Issuer or any other Person
or entity.
SECTION 5.5 Guarantee of Payment
This TARGETS Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TARGETS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this TARGETS Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this TARGETS Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this TARGETS Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TARGETS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this TARGETS Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination
This TARGETS Guarantee shall terminate upon the earliest to occur of
(i) full payment of the Maturity Payment and the final payment due in respect of
the Treasury Securities, (ii) full payment of the Accelerated Maturity Payment
and the distribution of the Treasury Proceeds on an Accelerated Maturity Date to
the Holders of the TARGETS and the Common Securities as of the Record Date (as
defined in the Indenture) and (iii) full payment of the
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<PAGE> 17
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this TARGETS Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid under the TARGETS or under this
TARGETS Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this TARGETS
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
TARGETS Guarantee or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 7.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the termination of this TARGETS Guarantee.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns
All guarantees and agreements contained in this TARGETS Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the TARGETS then
outstanding.
SECTION 8.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
TARGETS Guarantee may be amended only with the prior approval of the Holders of
not less than a Majority of the TARGETS. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 8.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation; provided that in any such case (i) either the Guarantor shall be
the continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia and such successor
corporation shall expressly assume the due and punctual payment of the Guarantee
Payments described herein and the due and punctual performance and observance of
all of the covenants and conditions of this TARGETS Guarantee, and (ii) the
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 8.4 Notices
All notices provided for in this TARGETS Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail postage prepaid as follows:
(a) If given to the TARGETS Guarantee Trustee, at the TARGETS
Guarantee Trustee's mailing address set forth below (or such other address as
the TARGETS Guarantee Trustee may give notice of to the Holders)
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders)
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<PAGE> 19
388 Greenwich Street
New York, New York 10013
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices provided for in this TARGETS Guarantee shall be deemed
to have been given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.5 Benefit
This TARGETS Guarantee is solely for the benefit of the Holders of
the TARGETS and, subject to Section 3.l(a), is not separately transferable from
the TARGETS.
SECTION 8.6 Governing Law
THIS TARGETS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
16
<PAGE> 20
THIS TARGETS GUARANTEE is executed as of the day and year first
above written.
SALOMON SMITH BARNEY HOLDINGS INC.
as Guarantor
By:
---------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
TARGETS Guarantee Trustee
By:
---------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(m)
==============================
FORM OF
TARGETED GROWTH ENHANCED TERMS SECURITIES
GUARANTEE AGREEMENT
TARGETS TRUST IV
Dated as of , 1999
==============================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...............................4
SECTION 2.2 Lists of Holders of Securities.................................4
SECTION 2.3 Reports by the TARGETS Guarantee Trustee.......................5
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee..................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Events of Default; Waiver......................................5
SECTION 2.7 Event of Default Notice.......................................5
SECTION 2.8 Conflicting Interests..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee.............6
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee....................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.........10
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility........................10
SECTION 4.2 Appointment. Removal and Resignation of TARGETS Guarantee
Trustees....................................................10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.....................................................11
SECTION 5.2 Waiver of Notice and Demand...................................11
SECTION 5.3 Obligations Not Affected......................................12
SECTION 5.4 Rights of Holders.............................................12
SECTION 5.5 Guarantee of Payment..........................................13
SECTION 5.6 Subrogation...................................................13
SECTION 5.7 Independent Obligations.......................................13
<PAGE> 3
ARTICLE VI
TERMINATION
SECTION 6.1 Termination...................................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation...................................................14
SECTION 7.2 Indemnification...............................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns........................................15
SECTION 8.2 Amendments....................................................15
SECTION 8.3 Consolidations and Mergers....................................15
SECTION 8.4 Notices.......................................................15
SECTION 8.5 Benefit.......................................................16
SECTION 8.6 Governing Law.................................................16
ii
<PAGE> 4
This GUARANTEE AGREEMENT (the "TARGETS Guarantee"), dated as of
, 1999, is executed and delivered by Salomon Smith Barney Holdings
Inc., a Delaware corporation (together with any successors by way of merger the
"Guarantor"), and The Chase Manhattan Bank, as trustee (the "TARGETS Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the TARGETS (as defined herein) of TARGETS Trust IV, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of , 1999 among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof preferred securities designated the Targeted
Growth Enhanced Terms Securities(R) (the "TARGETS");
WHEREAS, as incentive for the Holders to purchase the TARGETS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this TARGETS Guarantee, to pay to the Holders the Guarantee Payments
(as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TARGETS, which purchase the Guarantor hereby agrees shall benefit the Guarantor,
the Guarantor executes and delivers this TARGETS Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this TARGETS Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this TARGETS Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) A term defined anywhere in this TARGETS Guarantee has the same
meaning throughout;
(c) all references to "the TARGETS Guarantee" or "this TARGETS
Guarantee" are to this TARGETS Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this TARGETS Guarantee to Articles and
Sections are to Articles and Sections of this TARGETS
Guarantee, unless otherwise specified;
<PAGE> 5
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this TARGETS Guarantee, unless otherwise defined
in this TARGETS Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Accelerated Maturity Date" has the meaning specified in the
Declaration.
"Accelerated Maturity Payment" has the meaning specified in the
Declaration.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are permitted or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the TARGETS Guarantee
Trustee at which the corporate trust business of the TARGETS Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of TARGETS.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this TARGETS Guarantee.
"Forward Contract" means the Forward Contract of the Guarantor
issuable under the Indenture, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TARGETS, to the extent not paid or made
by the Issuer: (i) any Maturity Payment that is required to be made in respect
of the TARGETS, to the extent the Issuer has funds available therefor, (ii) any
Accelerated Maturity Payment that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, (iii) any
Quarterly Distribution that is required to be made in respect of the TARGETS, to
the extent the Issuer has funds available therefor, (iv) any distribution of
Treasury Proceeds that is required to be made in respect of the TARGETS, to the
extent the Issuer has funds available therefor, and (v) any other remaining
assets of the Issuer payable to the Holders of the TARGETS upon liquidation of
the Issuer.
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"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any TARGETS; provided, however, that in determining
whether the holders of the requisite percentage of TARGETS have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the TARGETS Guarantee Trustee, any
Affiliate of the TARGETS Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the TARGETS Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1999, between
the Guarantor and The Chase Manhattan Bank, as trustee, and any indenture
supplemental thereto pursuant to which the securities representing interests in
a Forward Contract (defined in the Indenture as the "Securities") are to be
issued to the Institutional Trustee of the Issuer.
"Majority of the TARGETS" means, except as provided by the Trust
Indenture Act, a vote by Holder(s), voting separately as a class, holding
TARGETS representing more than 50% of the aggregate beneficial interests
represented by all outstanding TARGETS.
"Maturity Date" has the meaning specified in the Declaration.
"Maturity Payment" has the meaning specified in the Declaration.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this TARGETS Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Quarterly Distribution" has the meaning specified in the
Declaration.
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"Responsible Officer" means, with respect to the TARGETS Guarantee
Trustee, any officer within the Corporate Trust Office of the TARGETS Guarantee
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the TARGETS Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, in any case, that has direct responsibility for the
administration of this TARGETS Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor TARGETS Guarantee Trustee" means a successor TARGETS
Guarantee Trustee possessing the qualifications to act as TARGETS Guarantee
Trustee under Section 4.1.
"TARGETS Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor TARGETS Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this TARGETS Guarantee and thereafter means
each such Successor TARGETS Guarantee Trustee.
"Treasury Proceeds" has the meaning specified in the Indenture.
"Treasury Securities" has the meaning specified in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This TARGETS Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this TARGETS Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this TARGETS
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the TARGETS Guarantee Trustee with a
list, in such form as the TARGETS Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within one Business Day after January 1 and June 30 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the TARGETS Guarantee Trustee; provided that the Guarantor
shall
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not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the TARGETS
Guarantee Trustee by the Guarantor. The TARGETS Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The TARGETS Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312 (b) of the Trust Indenture Act.
SECTION 2.3 Reports by the TARGETS Guarantee Trustee
Within 60 days after April 15 of each year, the TARGETS Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The TARGETS Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee
The Guarantor shall provide to the TARGETS Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the TARGETS Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this TARGETS Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority of TARGETS may, by vote, on behalf of the
Holders of all of the TARGETS, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this TARGETS Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The TARGETS Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the TARGETS Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided that the
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TARGETS Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the TARGETS Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The TARGETS Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the TARGETS Guarantee Trustee shall
have received written notice of such Event of Default or a Responsible Officer
of the TARGETS Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
TARGETS Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee
(a) This TARGETS Guarantee shall be held by the TARGETS Guarantee
Trustee for the benefit of the Holders, and the TARGETS Guarantee Trustee shall
not transfer its right, title and interest in this TARGETS Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor TARGETS Guarantee Trustee on acceptance by such Successor
TARGETS Guarantee Trustee of its appointment to act as Successor TARGETS
Guarantee Trustee. The right, title and interest of the TARGETS Guarantee
Trustee shall automatically vest in any Successor TARGETS Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor TARGETS Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the TARGETS Guarantee Trustee has occurred and is continuing, the TARGETS
Guarantee Trustee shall enforce this TARGETS Guarantee for the benefit of the
Holders of the TARGETS.
(c) The TARGETS Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this TARGETS Guarantee, and no implied covenants shall be read into
this TARGETS Guarantee against the TARGETS Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee shall exercise such of the rights and
powers vested in it by this TARGETS Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
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(d) No provision of this TARGETS Guarantee shall be construed to
relieve the TARGETS Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the TARGETS Guarantee
Trustee shall be determined solely by the express provisions of this
TARGETS Guarantee, and the TARGETS Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this TARGETS Guarantee, and no implied
covenants or obligations shall be read into this TARGETS Guarantee
against the TARGETS Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
TARGETS Guarantee Trustee, the TARGETS Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the TARGETS Guarantee Trustee and
conforming to the requirements of this TARGETS Guarantee, but in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the TARGETS
Guarantee Trustee, the TARGETS Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this TARGETS Guarantee;
(ii) the TARGETS Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
TARGETS Guarantee Trustee, unless it shall be proved that the TARGETS
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the TARGETS Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
of the TARGETS relating to the time, method and place of conducting any
proceeding for any remedy available to the TARGETS Guarantee Trustee, or
exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee;
(iv) no provision of this TARGETS Guarantee shall require the
TARGETS Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the TARGETS
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this TARGETS Guarantee or indemnity, reasonably satisfactory
to the TARGETS Guarantee Trustee, against such risk or liability is not
reasonably assured to it;
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(v) The granting of any right to the TARGETS Guarantee Trustee
hereunder shall not, subject to the following, be deemed to impose on the
TARGETS Guarantee Trustee an obligation to exercise such rights subject to
3.1(d)(vi); and
(vi) the TARGETS Guarantee Trustee shall not be obligated to
exercise any remedy or take any action hereunder unless directed to do so
by the holders of a Majority of the TARGETS and shall have no liability
for its failure to act pending receipt by it of any such direction.
This Section 3.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The TARGETS Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this TARGETS Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this TARGETS
Guarantee, the TARGETS Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the TARGETS Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The TARGETS Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The TARGETS Guarantee Trustee may consult with counsel,
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The TARGETS Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this TARGETS Guarantee from
any court of competent jurisdiction.
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(vi) The TARGETS Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
TARGETS Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the TARGETS Guarantee Trustee such security
and indemnity, reasonably satisfactory to the TARGETS Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and
the expenses of the TARGETS Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the TARGETS Guarantee Trustee; provided that nothing
contained in this Section 3.2(a) (vi) shall be taken to relieve the
TARGETS Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
TARGETS Guarantee.
(vii) The TARGETS Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the TARGETS Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The TARGETS Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
TARGETS Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the TARGETS Guarantee Trustee or its
agents hereunder shall bind the Holders of the TARGETS, and the signature
of the TARGETS Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be required
to inquire as to the authority of the TARGETS Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
TARGETS Guarantee, both of which shall be conclusively evidenced by the
TARGETS Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this TARGETS Guarantee
the TARGETS Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the TARGETS Guarantee Trustee (i) may request
instructions from the Holders of a Majority of the TARGETS, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this TARGETS Guarantee shall be deemed to impose
any duty or obligation on the TARGETS Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be
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illegal, or in which the TARGETS Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the TARGETS Guarantee Trustee shall be construed to be a
duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the TARGETS Guarantee Trustee does not assume
any responsibility for their correctness. The TARGETS Guarantee Trustee makes no
representation as to the validity or sufficiency of this TARGETS Guarantee.
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility
(a) There shall at all times be a TARGETS Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the TARGETS Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the TARGETS Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the TARGETS Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the TARGETS Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees
(a) Subject to Section 4.2(b), the TARGETS Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
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(b) The TARGETS Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor TARGETS Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor TARGETS Guarantee Trustee and delivered to the Guarantor.
(c) The TARGETS Guarantee Trustee appointed to office shall hold
office until a Successor TARGETS Guarantee Trustee shall have been appointed or
until its removal or resignation. The TARGETS Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the TARGETS Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor TARGETS
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor TARGETS Guarantee Trustee and
delivered to the Guarantor and the resigning TARGETS Guarantee Trustee.
(d) If no Successor TARGETS Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning TARGETS Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor TARGETS Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor TARGETS Guarantee Trustee.
(e) No TARGETS Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor TARGETS Guarantee Trustee.
(f) Upon termination of this TARGETS Guarantee or removal or
resignation of the TARGETS Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the TARGETS Guarantee Trustee all amounts accrued and
owing to such TARGETS Guarantee Trustee to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this TARGETS
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the
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Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this TARGETS Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TARGETS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Maturity Payment, Accelerated Maturity Payment, Quarterly
Distributions, Treasury Proceeds or any other sums payable under the terms of
the TARGETS or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the TARGETS;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TARGETS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the TARGETS;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority of the TARGETS have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the TARGETS Guarantee Trustee in respect of this TARGETS Guarantee
or exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee.
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(b) If the TARGETS Guarantee Trustee fails to enforce its rights
under this TARGETS Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the TARGETS Guarantee Trustee's
rights under this TARGETS Guarantee, without first instituting a legal
proceeding against the Issuer, the TARGETS Guarantee Trustee or any other Person
or entity.
(c) A Holder of TARGETS may also directly institute a legal
proceeding against the Guarantor to enforce such Holder's right to receive
payment under this TARGETS Guarantee without first (i) directing the TARGETS
Guarantee Trustee to enforce the terms of this TARGETS Guarantee or (ii)
instituting a legal proceeding directly against the Issuer or any other Person
or entity.
SECTION 5.5 Guarantee of Payment
This TARGETS Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TARGETS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this TARGETS Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this TARGETS Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this TARGETS Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TARGETS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this TARGETS Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination
This TARGETS Guarantee shall terminate upon the earliest to occur of
(i) full payment of the Maturity Payment and the final payment due in respect of
the Treasury Securities, (ii) full payment of the Accelerated Maturity Payment
and the distribution of the Treasury Proceeds on an Accelerated Maturity Date to
the Holders of the TARGETS and the Common Securities as of the Record Date (as
defined in the Indenture) and (iii) full payment of the
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amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this TARGETS Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid under the TARGETS or under this
TARGETS Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this TARGETS
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
TARGETS Guarantee or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 7.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the termination of this TARGETS Guarantee.
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<PAGE> 18
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns
All guarantees and agreements contained in this TARGETS Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the TARGETS then
outstanding.
SECTION 8.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
TARGETS Guarantee may be amended only with the prior approval of the Holders of
not less than a Majority of the TARGETS. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 8.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation; provided that in any such case (i) either the Guarantor shall be
the continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia and such successor
corporation shall expressly assume the due and punctual payment of the Guarantee
Payments described herein and the due and punctual performance and observance of
all of the covenants and conditions of this TARGETS Guarantee, and (ii) the
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 8.4 Notices
All notices provided for in this TARGETS Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail postage prepaid as follows:
(a) If given to the TARGETS Guarantee Trustee, at the TARGETS
Guarantee Trustee's mailing address set forth below (or such other address as
the TARGETS Guarantee Trustee may give notice of to the Holders)
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders)
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<PAGE> 19
388 Greenwich Street
New York, New York 10013
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices provided for in this TARGETS Guarantee shall be deemed
to have been given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.5 Benefit
This TARGETS Guarantee is solely for the benefit of the Holders of
the TARGETS and, subject to Section 3.l(a), is not separately transferable from
the TARGETS.
SECTION 8.6 Governing Law
THIS TARGETS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
16
<PAGE> 20
THIS TARGETS GUARANTEE is executed as of the day and year first
above written.
SALOMON SMITH BARNEY HOLDINGS INC.
as Guarantor
By:
---------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
TARGETS Guarantee Trustee
By:
---------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(n)
==========================
FORM OF
TARGETED GROWTH ENHANCED TERMS SECURITIES
GUARANTEE AGREEMENT
TARGETS TRUST V
Dated as of , 1999
==========================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...............................4
SECTION 2.2 Lists of Holders of Securities.................................4
SECTION 2.3 Reports by the TARGETS Guarantee Trustee.......................5
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee..................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Events of Default; Waiver......................................5
SECTION 2.7 Event of Default Notice.......................................5
SECTION 2.8 Conflicting Interests..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee.............6
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee....................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.........10
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility........................10
SECTION 4.2 Appointment. Removal and Resignation of TARGETS Guarantee
Trustees..................................................10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.....................................................11
SECTION 5.2 Waiver of Notice and Demand...................................11
SECTION 5.3 Obligations Not Affected......................................12
SECTION 5.4 Rights of Holders.............................................12
SECTION 5.5 Guarantee of Payment..........................................13
SECTION 5.6 Subrogation...................................................13
SECTION 5.7 Independent Obligations.......................................13
<PAGE> 3
ARTICLE VI
TERMINATION
SECTION 6.1 Termination...................................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation...................................................14
SECTION 7.2 Indemnification...............................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns........................................15
SECTION 8.2 Amendments....................................................15
SECTION 8.3 Consolidations and Mergers....................................15
SECTION 8.4 Notices.......................................................15
SECTION 8.5 Benefit.......................................................16
SECTION 8.6 Governing Law.................................................16
ii
<PAGE> 4
This GUARANTEE AGREEMENT (the "TARGETS Guarantee"), dated as of
, 1999, is executed and delivered by Salomon Smith Barney Holdings
Inc., a Delaware corporation (together with any successors by way of merger the
"Guarantor"), and The Chase Manhattan Bank, as trustee (the "TARGETS Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the TARGETS (as defined herein) of TARGETS Trust V, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of , 1999 among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof preferred securities designated the Targeted
Growth Enhanced Terms Securities(R) (the "TARGETS");
WHEREAS, as incentive for the Holders to purchase the TARGETS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this TARGETS Guarantee, to pay to the Holders the Guarantee Payments
(as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TARGETS, which purchase the Guarantor hereby agrees shall benefit the Guarantor,
the Guarantor executes and delivers this TARGETS Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this TARGETS Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this TARGETS Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) A term defined anywhere in this TARGETS Guarantee has the same
meaning throughout;
(c) all references to "the TARGETS Guarantee" or "this TARGETS
Guarantee" are to this TARGETS Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this TARGETS Guarantee to Articles and
Sections are to Articles and Sections of this TARGETS
Guarantee, unless otherwise specified;
<PAGE> 5
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this TARGETS Guarantee, unless otherwise defined
in this TARGETS Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Declaration.
"Accelerated Maturity Payment" has the meaning specified in the
Declaration.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are permitted or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the TARGETS Guarantee
Trustee at which the corporate trust business of the TARGETS Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of TARGETS.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this TARGETS Guarantee.
"Forward Contract" means the Forward Contract of the Guarantor
issuable under the Indenture, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TARGETS, to the extent not paid or made
by the Issuer: (i) any Maturity Payment that is required to be made in respect
of the TARGETS, to the extent the Issuer has funds available therefor, (ii) any
Accelerated Maturity Payment that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, (iii) any
Quarterly Distribution that is required to be made in respect of the TARGETS, to
the extent the Issuer has funds available therefor, (iv) any distribution of
Treasury Proceeds that is required to be made in respect of the TARGETS, to the
extent the Issuer has funds available therefor, and (v) any other remaining
assets of the Issuer payable to the Holders of the TARGETS upon liquidation of
the Issuer.
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<PAGE> 6
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any TARGETS; provided, however, that in determining
whether the holders of the requisite percentage of TARGETS have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the TARGETS Guarantee Trustee, any
Affiliate of the TARGETS Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the TARGETS Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1999, between
the Guarantor and The Chase Manhattan Bank, as trustee, and any indenture
supplemental thereto pursuant to which the securities representing interests in
a Forward Contract (defined in the Indenture as the "Securities") are to be
issued to the Institutional Trustee of the Issuer.
"Majority of the TARGETS" means, except as provided by the Trust
Indenture Act, a vote by Holder(s), voting separately as a class, holding
TARGETS representing more than 50% of the aggregate beneficial interests
represented by all outstanding TARGETS.
"Maturity Date" has the meaning specified in the Declaration.
"Maturity Payment" has the meaning specified in the Declaration.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this TARGETS Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Quarterly Distribution" has the meaning specified in the
Declaration.
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<PAGE> 7
"Responsible Officer" means, with respect to the TARGETS Guarantee
Trustee, any officer within the Corporate Trust Office of the TARGETS Guarantee
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the TARGETS Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, in any case, that has direct responsibility for the
administration of this TARGETS Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor TARGETS Guarantee Trustee" means a successor TARGETS
Guarantee Trustee possessing the qualifications to act as TARGETS Guarantee
Trustee under Section 4.1.
"TARGETS Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor TARGETS Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this TARGETS Guarantee and thereafter means
each such Successor TARGETS Guarantee Trustee.
"Treasury Proceeds" has the meaning specified in the Indenture.
"Treasury Securities" has the meaning specified in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This TARGETS Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this TARGETS Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this TARGETS
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the TARGETS Guarantee Trustee with a
list, in such form as the TARGETS Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within one Business Day after January 1 and June 30 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the TARGETS Guarantee Trustee; provided that the Guarantor
shall
4
<PAGE> 8
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the TARGETS
Guarantee Trustee by the Guarantor. The TARGETS Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The TARGETS Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312 (b) of the Trust Indenture Act.
SECTION 2.3 Reports by the TARGETS Guarantee Trustee
Within 60 days after April 15 of each year, the TARGETS Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The TARGETS Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee
The Guarantor shall provide to the TARGETS Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the TARGETS Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this TARGETS Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority of TARGETS may, by vote, on behalf of the
Holders of all of the TARGETS, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this TARGETS Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The TARGETS Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the TARGETS Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided that the
5
<PAGE> 9
TARGETS Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the TARGETS Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The TARGETS Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the TARGETS Guarantee Trustee shall
have received written notice of such Event of Default or a Responsible Officer
of the TARGETS Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
TARGETS Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee
(a) This TARGETS Guarantee shall be held by the TARGETS Guarantee
Trustee for the benefit of the Holders, and the TARGETS Guarantee Trustee shall
not transfer its right, title and interest in this TARGETS Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor TARGETS Guarantee Trustee on acceptance by such Successor
TARGETS Guarantee Trustee of its appointment to act as Successor TARGETS
Guarantee Trustee. The right, title and interest of the TARGETS Guarantee
Trustee shall automatically vest in any Successor TARGETS Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor TARGETS Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the TARGETS Guarantee Trustee has occurred and is continuing, the TARGETS
Guarantee Trustee shall enforce this TARGETS Guarantee for the benefit of the
Holders of the TARGETS.
(c) The TARGETS Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this TARGETS Guarantee, and no implied covenants shall be read into
this TARGETS Guarantee against the TARGETS Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee shall exercise such of the rights and
powers vested in it by this TARGETS Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
6
<PAGE> 10
(d) No provision of this TARGETS Guarantee shall be construed to
relieve the TARGETS Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the TARGETS Guarantee
Trustee shall be determined solely by the express provisions of this
TARGETS Guarantee, and the TARGETS Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this TARGETS Guarantee, and no implied
covenants or obligations shall be read into this TARGETS Guarantee
against the TARGETS Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
TARGETS Guarantee Trustee, the TARGETS Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the TARGETS Guarantee Trustee and
conforming to the requirements of this TARGETS Guarantee, but in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the TARGETS
Guarantee Trustee, the TARGETS Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this TARGETS Guarantee;
(ii) the TARGETS Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
TARGETS Guarantee Trustee, unless it shall be proved that the TARGETS
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the TARGETS Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
of the TARGETS relating to the time, method and place of conducting any
proceeding for any remedy available to the TARGETS Guarantee Trustee, or
exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee;
(iv) no provision of this TARGETS Guarantee shall require the
TARGETS Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the TARGETS
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to
it under the terms of this TARGETS Guarantee or indemnity, reasonably
satisfactory to the TARGETS Guarantee Trustee, against such risk or
liability is not reasonably assured to it;
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<PAGE> 11
(v) The granting of any right to the TARGETS Guarantee Trustee
hereunder shall not, subject to the following, be deemed to impose on the
TARGETS Guarantee Trustee an obligation to exercise such rights subject to
3.1(d)(vi); and
(vi) the TARGETS Guarantee Trustee shall not be obligated to
exercise any remedy or take any action hereunder unless directed to do so
by the holders of a Majority of the TARGETS and shall have no liability
for its failure to act pending receipt by it of any such direction.
This Section 3.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The TARGETS Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this TARGETS Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this TARGETS
Guarantee, the TARGETS Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the TARGETS Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The TARGETS Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The TARGETS Guarantee Trustee may consult with counsel,
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The TARGETS Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this TARGETS Guarantee from
any court of competent jurisdiction.
8
<PAGE> 12
(vi) The TARGETS Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
TARGETS Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the TARGETS Guarantee Trustee such security
and indemnity, reasonably satisfactory to the TARGETS Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and
the expenses of the TARGETS Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the TARGETS Guarantee Trustee; provided that nothing
contained in this Section 3.2(a) (vi) shall be taken to relieve the
TARGETS Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
TARGETS Guarantee.
(vii) The TARGETS Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the TARGETS Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The TARGETS Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
TARGETS Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the TARGETS Guarantee Trustee or its
agents hereunder shall bind the Holders of the TARGETS, and the signature
of the TARGETS Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be required
to inquire as to the authority of the TARGETS Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
TARGETS Guarantee, both of which shall be conclusively evidenced by the
TARGETS Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this TARGETS Guarantee
the TARGETS Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the TARGETS Guarantee Trustee (i) may request
instructions from the Holders of a Majority of the TARGETS, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this TARGETS Guarantee shall be deemed to impose
any duty or obligation on the TARGETS Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be
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<PAGE> 13
illegal, or in which the TARGETS Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the TARGETS Guarantee Trustee shall be construed to be a
duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the TARGETS Guarantee Trustee does not assume
any responsibility for their correctness. The TARGETS Guarantee Trustee makes no
representation as to the validity or sufficiency of this TARGETS Guarantee.
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility
(a) There shall at all times be a TARGETS Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the TARGETS Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the TARGETS Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the TARGETS Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the TARGETS Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees
(a) Subject to Section 4.2(b), the TARGETS Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
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<PAGE> 14
(b) The TARGETS Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor TARGETS Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor TARGETS Guarantee Trustee and delivered to the Guarantor.
(c) The TARGETS Guarantee Trustee appointed to office shall hold
office until a Successor TARGETS Guarantee Trustee shall have been appointed or
until its removal or resignation. The TARGETS Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the TARGETS Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor TARGETS
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor TARGETS Guarantee Trustee and
delivered to the Guarantor and the resigning TARGETS Guarantee Trustee.
(d) If no Successor TARGETS Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning TARGETS Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor TARGETS Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor TARGETS Guarantee Trustee.
(e) No TARGETS Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor TARGETS Guarantee Trustee.
(f) Upon termination of this TARGETS Guarantee or removal or
resignation of the TARGETS Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the TARGETS Guarantee Trustee all amounts accrued and
owing to such TARGETS Guarantee Trustee to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this TARGETS
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the
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<PAGE> 15
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this TARGETS Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TARGETS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Maturity Payment, Accelerated Maturity Payment, Quarterly
Distributions, Treasury Proceeds or any other sums payable under the terms of
the TARGETS or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the TARGETS;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TARGETS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the TARGETS;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority of the TARGETS have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the TARGETS Guarantee Trustee in respect of this TARGETS Guarantee
or exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee.
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<PAGE> 16
(b) If the TARGETS Guarantee Trustee fails to enforce its rights
under this TARGETS Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the TARGETS Guarantee Trustee's
rights under this TARGETS Guarantee, without first instituting a legal
proceeding against the Issuer, the TARGETS Guarantee Trustee or any other Person
or entity.
(c) A Holder of TARGETS may also directly institute a legal
proceeding against the Guarantor to enforce such Holder's right to receive
payment under this TARGETS Guarantee without first (i) directing the TARGETS
Guarantee Trustee to enforce the terms of this TARGETS Guarantee or (ii)
instituting a legal proceeding directly against the Issuer or any other Person
or entity.
SECTION 5.5 Guarantee of Payment
This TARGETS Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TARGETS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this TARGETS Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this TARGETS Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this TARGETS Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TARGETS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this TARGETS Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination
This TARGETS Guarantee shall terminate upon the earliest to occur of
(i) full payment of the Maturity Payment and the final payment due in respect of
the Treasury Securities, (ii) full payment of the Accelerated Maturity Payment
and the distribution of the Treasury Proceeds on an Accelerated Maturity Date to
the Holders of the TARGETS and the Common Securities as of the Record Date (as
defined in the Indenture) and (iii) full payment of the
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<PAGE> 17
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this TARGETS Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid under the TARGETS or under this
TARGETS Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this TARGETS
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
TARGETS Guarantee or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 7.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the termination of this TARGETS Guarantee.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns
All guarantees and agreements contained in this TARGETS Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the TARGETS then
outstanding.
SECTION 8.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
TARGETS Guarantee may be amended only with the prior approval of the Holders of
not less than a Majority of the TARGETS. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 8.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation; provided that in any such case (i) either the Guarantor shall be
the continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia and such successor
corporation shall expressly assume the due and punctual payment of the Guarantee
Payments described herein and the due and punctual performance and observance of
all of the covenants and conditions of this TARGETS Guarantee, and (ii) the
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 8.4 Notices
All notices provided for in this TARGETS Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail postage prepaid as follows:
(a) If given to the TARGETS Guarantee Trustee, at the TARGETS
Guarantee Trustee's mailing address set forth below (or such other address as
the TARGETS Guarantee Trustee may give notice of to the Holders)
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders)
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<PAGE> 19
388 Greenwich Street
New York, New York 10013
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices provided for in this TARGETS Guarantee shall be deemed
to have been given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.5 Benefit
This TARGETS Guarantee is solely for the benefit of the Holders of
the TARGETS and, subject to Section 3.l(a), is not separately transferable from
the TARGETS.
SECTION 8.6 Governing Law
THIS TARGETS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
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<PAGE> 20
THIS TARGETS GUARANTEE is executed as of the day and year first
above written.
SALOMON SMITH BARNEY HOLDINGS INC.
as Guarantor
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
TARGETS Guarantee Trustee
By:
-------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(o)
=======================
FORM OF
TARGETED GROWTH ENHANCED TERMS SECURITIES
GUARANTEE AGREEMENT
TARGETS TRUST VI
Dated as of , 1999
=======================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...............................4
SECTION 2.2 Lists of Holders of Securities.................................4
SECTION 2.3 Reports by the TARGETS Guarantee Trustee.......................5
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee..................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Events of Default; Waiver......................................5
SECTION 2.7 Event of Default Notice.......................................5
SECTION 2.8 Conflicting Interests..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee.............6
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee....................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.........10
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility........................10
SECTION 4.2 Appointment. Removal and Resignation of TARGETS Guarantee
Trustees......................................................10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.....................................................11
SECTION 5.2 Waiver of Notice and Demand...................................11
SECTION 5.3 Obligations Not Affected......................................12
SECTION 5.4 Rights of Holders.............................................12
SECTION 5.5 Guarantee of Payment..........................................13
SECTION 5.6 Subrogation...................................................13
SECTION 5.7 Independent Obligations.......................................13
<PAGE> 3
ARTICLE VI
TERMINATION
SECTION 6.1 Termination...................................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation...................................................14
SECTION 7.2 Indemnification...............................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns........................................15
SECTION 8.2 Amendments....................................................15
SECTION 8.3 Consolidations and Mergers....................................15
SECTION 8.4 Notices.......................................................15
SECTION 8.5 Benefit.......................................................16
SECTION 8.6 Governing Law.................................................16
ii
<PAGE> 4
This GUARANTEE AGREEMENT (the "TARGETS Guarantee"), dated as of
, 1999, is executed and delivered by Salomon Smith Barney Holdings
Inc., a Delaware corporation (together with any successors by way of merger the
"Guarantor"), and The Chase Manhattan Bank, as trustee (the "TARGETS Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the TARGETS (as defined herein) of TARGETS Trust VI, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of , 1999 among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof preferred securities designated the Targeted
Growth Enhanced Terms Securities(R) (the "TARGETS");
WHEREAS, as incentive for the Holders to purchase the TARGETS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this TARGETS Guarantee, to pay to the Holders the Guarantee Payments
(as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TARGETS, which purchase the Guarantor hereby agrees shall benefit the Guarantor,
the Guarantor executes and delivers this TARGETS Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this TARGETS Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this TARGETS Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) A term defined anywhere in this TARGETS Guarantee has the same
meaning throughout;
(c) all references to "the TARGETS Guarantee" or "this TARGETS
Guarantee" are to this TARGETS Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this TARGETS Guarantee to Articles and
Sections are to Articles and Sections of this TARGETS
Guarantee, unless otherwise specified;
<PAGE> 5
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this TARGETS Guarantee, unless otherwise defined
in this TARGETS Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Declaration.
"Accelerated Maturity Payment" has the meaning specified in the
Declaration.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are permitted or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the TARGETS Guarantee
Trustee at which the corporate trust business of the TARGETS Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of TARGETS.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this TARGETS Guarantee.
"Forward Contract" means the Forward Contract of the Guarantor
issuable under the Indenture, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TARGETS, to the extent not paid or made
by the Issuer: (i) any Maturity Payment that is required to be made in respect
of the TARGETS, to the extent the Issuer has funds available therefor, (ii) any
Accelerated Maturity Payment that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, (iii) any
Quarterly Distribution that is required to be made in respect of the TARGETS, to
the extent the Issuer has funds available therefor, (iv) any distribution of
Treasury Proceeds that is required to be made in respect of the TARGETS, to the
extent the Issuer has funds available therefor, and (v) any other remaining
assets of the Issuer payable to the Holders of the TARGETS upon liquidation of
the Issuer.
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<PAGE> 6
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any TARGETS; provided, however, that in determining
whether the holders of the requisite percentage of TARGETS have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the TARGETS Guarantee Trustee, any
Affiliate of the TARGETS Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the TARGETS Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1999, between
the Guarantor and The Chase Manhattan Bank, as trustee, and any indenture
supplemental thereto pursuant to which the securities representing interests in
a Forward Contract (defined in the Indenture as the "Securities") are to be
issued to the Institutional Trustee of the Issuer.
"Majority of the TARGETS" means, except as provided by the Trust
Indenture Act, a vote by Holder(s), voting separately as a class, holding
TARGETS representing more than 50% of the aggregate beneficial interests
represented by all outstanding TARGETS.
"Maturity Date" has the meaning specified in the Declaration.
"Maturity Payment" has the meaning specified in the Declaration.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this TARGETS Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Quarterly Distribution" has the meaning specified in the
Declaration.
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<PAGE> 7
"Responsible Officer" means, with respect to the TARGETS Guarantee
Trustee, any officer within the Corporate Trust Office of the TARGETS Guarantee
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, trust officer or
other officer of the Corporate Trust Office of the TARGETS Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, in any case, that has direct responsibility for the
administration of this TARGETS Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor TARGETS Guarantee Trustee" means a successor TARGETS
Guarantee Trustee possessing the qualifications to act as TARGETS Guarantee
Trustee under Section 4.1.
"TARGETS Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor TARGETS Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this TARGETS Guarantee and thereafter means
each such Successor TARGETS Guarantee Trustee.
"Treasury Proceeds" has the meaning specified in the Indenture.
"Treasury Securities" has the meaning specified in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This TARGETS Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this TARGETS Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this TARGETS
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the TARGETS Guarantee Trustee with a
list, in such form as the TARGETS Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within one Business Day after January 1 and June 30 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the TARGETS Guarantee Trustee; provided that the Guarantor
shall
4
<PAGE> 8
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the TARGETS
Guarantee Trustee by the Guarantor. The TARGETS Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The TARGETS Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312 (b) of the Trust Indenture Act.
SECTION 2.3 Reports by the TARGETS Guarantee Trustee
Within 60 days after April 15 of each year, the TARGETS Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The TARGETS Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee
The Guarantor shall provide to the TARGETS Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the TARGETS Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this TARGETS Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority of TARGETS may, by vote, on behalf of the
Holders of all of the TARGETS, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this TARGETS Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The TARGETS Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the TARGETS Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided that the
5
<PAGE> 9
TARGETS Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the TARGETS Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The TARGETS Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the TARGETS Guarantee Trustee shall
have received written notice of such Event of Default or a Responsible Officer
of the TARGETS Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
TARGETS Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee
(a) This TARGETS Guarantee shall be held by the TARGETS Guarantee
Trustee for the benefit of the Holders, and the TARGETS Guarantee Trustee shall
not transfer its right, title and interest in this TARGETS Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor TARGETS Guarantee Trustee on acceptance by such Successor
TARGETS Guarantee Trustee of its appointment to act as Successor TARGETS
Guarantee Trustee. The right, title and interest of the TARGETS Guarantee
Trustee shall automatically vest in any Successor TARGETS Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor TARGETS Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the TARGETS Guarantee Trustee has occurred and is continuing, the TARGETS
Guarantee Trustee shall enforce this TARGETS Guarantee for the benefit of the
Holders of the TARGETS.
(c) The TARGETS Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this TARGETS Guarantee, and no implied covenants shall be read into
this TARGETS Guarantee against the TARGETS Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee shall exercise such of the rights and
powers vested in it by this TARGETS Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
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(d) No provision of this TARGETS Guarantee shall be construed to
relieve the TARGETS Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the TARGETS Guarantee
Trustee shall be determined solely by the express provisions of this
TARGETS Guarantee, and the TARGETS Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this TARGETS Guarantee, and no implied
covenants or obligations shall be read into this TARGETS Guarantee
against the TARGETS Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
TARGETS Guarantee Trustee, the TARGETS Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the TARGETS Guarantee Trustee and
conforming to the requirements of this TARGETS Guarantee, but in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the TARGETS
Guarantee Trustee, the TARGETS Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this TARGETS Guarantee;
(ii) the TARGETS Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
TARGETS Guarantee Trustee, unless it shall be proved that the TARGETS
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the TARGETS Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
of the TARGETS relating to the time, method and place of conducting any
proceeding for any remedy available to the TARGETS Guarantee Trustee, or
exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee;
(iv) no provision of this TARGETS Guarantee shall require the
TARGETS Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the TARGETS
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this TARGETS Guarantee or indemnity, reasonably satisfactory
to the TARGETS Guarantee Trustee, against such risk or liability is not
reasonably assured to it;
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(v) The granting of any right to the TARGETS Guarantee Trustee
hereunder shall not, subject to the following, be deemed to impose on the
TARGETS Guarantee Trustee an obligation to exercise such rights subject to
3.1(d)(vi); and
(vi) the TARGETS Guarantee Trustee shall not be obligated to
exercise any remedy or take any action hereunder unless directed to do so
by the holders of a Majority of the TARGETS and shall have no liability
for its failure to act pending receipt by it of any such direction.
This Section 3.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The TARGETS Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this TARGETS Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this TARGETS
Guarantee, the TARGETS Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the TARGETS Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The TARGETS Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The TARGETS Guarantee Trustee may consult with counsel,
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The TARGETS Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this TARGETS Guarantee from
any court of competent jurisdiction.
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(vi) The TARGETS Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
TARGETS Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the TARGETS Guarantee Trustee such security
and indemnity, reasonably satisfactory to the TARGETS Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and
the expenses of the TARGETS Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the TARGETS Guarantee Trustee; provided that nothing
contained in this Section 3.2(a) (vi) shall be taken to relieve the
TARGETS Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
TARGETS Guarantee.
(vii) The TARGETS Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the TARGETS Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The TARGETS Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
TARGETS Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the TARGETS Guarantee Trustee or its
agents hereunder shall bind the Holders of the TARGETS, and the signature
of the TARGETS Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be required
to inquire as to the authority of the TARGETS Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
TARGETS Guarantee, both of which shall be conclusively evidenced by the
TARGETS Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this TARGETS Guarantee
the TARGETS Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the TARGETS Guarantee Trustee (i) may request
instructions from the Holders of a Majority of the TARGETS, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this TARGETS Guarantee shall be deemed to impose
any duty or obligation on the TARGETS Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be
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illegal, or in which the TARGETS Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the TARGETS Guarantee Trustee shall be construed to be a
duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the TARGETS Guarantee Trustee does not assume
any responsibility for their correctness. The TARGETS Guarantee Trustee makes no
representation as to the validity or sufficiency of this TARGETS Guarantee.
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility
(a) There shall at all times be a TARGETS Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the TARGETS Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the TARGETS Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the TARGETS Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the TARGETS Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees
(a) Subject to Section 4.2(b), the TARGETS Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
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(b) The TARGETS Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor TARGETS Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor TARGETS Guarantee Trustee and delivered to the Guarantor.
(c) The TARGETS Guarantee Trustee appointed to office shall hold
office until a Successor TARGETS Guarantee Trustee shall have been appointed or
until its removal or resignation. The TARGETS Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the TARGETS Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor TARGETS
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor TARGETS Guarantee Trustee and
delivered to the Guarantor and the resigning TARGETS Guarantee Trustee.
(d) If no Successor TARGETS Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning TARGETS Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor TARGETS Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor TARGETS Guarantee Trustee.
(e) No TARGETS Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor TARGETS Guarantee Trustee.
(f) Upon termination of this TARGETS Guarantee or removal or
resignation of the TARGETS Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the TARGETS Guarantee Trustee all amounts accrued and
owing to such TARGETS Guarantee Trustee to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this TARGETS
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the
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Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this TARGETS Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TARGETS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Maturity Payment, Accelerated Maturity Payment, Quarterly
Distributions, Treasury Proceeds or any other sums payable under the terms of
the TARGETS or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the TARGETS;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TARGETS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the TARGETS;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority of the TARGETS have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the TARGETS Guarantee Trustee in respect of this TARGETS Guarantee
or exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee.
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(b) If the TARGETS Guarantee Trustee fails to enforce its rights
under this TARGETS Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the TARGETS Guarantee Trustee's
rights under this TARGETS Guarantee, without first instituting a legal
proceeding against the Issuer, the TARGETS Guarantee Trustee or any other Person
or entity.
(c) A Holder of TARGETS may also directly institute a legal
proceeding against the Guarantor to enforce such Holder's right to receive
payment under this TARGETS Guarantee without first (i) directing the TARGETS
Guarantee Trustee to enforce the terms of this TARGETS Guarantee or (ii)
instituting a legal proceeding directly against the Issuer or any other Person
or entity.
SECTION 5.5 Guarantee of Payment
This TARGETS Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TARGETS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this TARGETS Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this TARGETS Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this TARGETS Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TARGETS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this TARGETS Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination
This TARGETS Guarantee shall terminate upon the earliest to occur of
(i) full payment of the Maturity Payment and the final payment due in respect of
the Treasury Securities, (ii) full payment of the Accelerated Maturity Payment
and the distribution of the Treasury Proceeds on an Accelerated Maturity Date to
the Holders of the TARGETS and the Common Securities as of the Record Date (as
defined in the Indenture) and (iii) full payment of the
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amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this TARGETS Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid under the TARGETS or under this
TARGETS Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this TARGETS
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
TARGETS Guarantee or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 7.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the termination of this TARGETS Guarantee.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns
All guarantees and agreements contained in this TARGETS Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the TARGETS then
outstanding.
SECTION 8.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
TARGETS Guarantee may be amended only with the prior approval of the Holders of
not less than a Majority of the TARGETS. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 8.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation; provided that in any such case (i) either the Guarantor shall be
the continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia and such successor
corporation shall expressly assume the due and punctual payment of the Guarantee
Payments described herein and the due and punctual performance and observance of
all of the covenants and conditions of this TARGETS Guarantee, and (ii) the
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 8.4 Notices
All notices provided for in this TARGETS Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail postage prepaid as follows:
(a) If given to the TARGETS Guarantee Trustee, at the TARGETS
Guarantee Trustee's mailing address set forth below (or such other address as
the TARGETS Guarantee Trustee may give notice of to the Holders)
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Structured Finance Services
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders)
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388 Greenwich Street
New York, New York 10013
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices provided for in this TARGETS Guarantee shall be deemed
to have been given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.5 Benefit
This TARGETS Guarantee is solely for the benefit of the Holders of
the TARGETS and, subject to Section 3.l(a), is not separately transferable from
the TARGETS.
SECTION 8.6 Governing Law
THIS TARGETS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
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THIS TARGETS GUARANTEE is executed as of the day and year first
above written.
SALOMON SMITH BARNEY HOLDINGS INC.
as Guarantor
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
TARGETS Guarantee Trustee
By:
--------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(p)
SALOMON SMITH BARNEY HOLDINGS INC.
to
THE CHASE MANHATTAN BANK,
Trustee
==========
FORM OF
FORWARD CONTRACT AND INDENTURE
WITH RESPECT TO
COMMON STOCK OF
==========
Dated as of , 1999
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101 Definitions....................................................1
SECTION 102 Compliance Certificates and Opinions...........................8
SECTION 103 Form of Documents Delivered to Trustee.........................9
SECTION 104 Acts of Holders...............................................10
SECTION 105 Notices, Etc., to Trustee and Company.........................10
SECTION 106 Notice to Holders; Waiver.....................................11
SECTION 107 Conflict with Trust Indenture Act.............................11
SECTION 108 Effect of Headings and Table of Contents......................11
SECTION 109 Successors and Assigns........................................11
SECTION 110 Separability Clause...........................................12
SECTION 111 Benefits of Indenture.........................................12
SECTION 112 Governing Law.................................................12
SECTION 113 Legal Holidays................................................12
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally...............................................12
SECTION 202 Definitive Securities.........................................13
SECTION 203 Form of Trustee's Certificate of Authentication...............13
SECTION 204 Securities in Global Form.....................................13
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued...........................................14
SECTION 302 Execution, Authentication, Delivery and Dating................14
SECTION 303 Global Securities; Temporary Securities.......................15
SECTION 304 Registration, Registration of Transfer and Exchange...........17
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities..............18
SECTION 306 Persons Deemed Owners.........................................19
SECTION 307 Cancellation..................................................19
SECTION 308 Yield Enhancement Payments....................................19
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.......................21
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<PAGE> 3
SECTION 402 Maturity......................................................22
SECTION 403 Dilution Adjustments..........................................22
SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization
Event.......................................................26
SECTION 405 Adjustments of Exchange Rate..................................27
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events...........................................27
SECTION 502 Acceleration of Maturity......................................28
SECTION 503 Taxes.........................................................29
SECTION 504 Treatment of Forward Contract.................................29
SECTION 505 Notices.......................................................29
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by
Trustee.....................................................29
SECTION 507 Trustee May Enforce Claims Without Possession of Securities...30
SECTION 508 Application of Money Collected................................30
SECTION 509 Limitation on Suits...........................................31
SECTION 510 Restoration of Rights and Remedies............................31
SECTION 511 Rights and Remedies Cumulative................................31
SECTION 512 Delay or Omission Not Waiver..................................32
SECTION 513 Control by Holders............................................32
SECTION 514 Waiver of Past Defaults.......................................32
SECTION 515 Waiver of Stay or Extension Laws..............................33
SECTION 516 Filing Proofs of Claim........................................33
SECTION 517 Unconditional Right of Holders to Receive Payments............34
SECTION 518 Restoration of Rights and Remedies............................34
SECTION 519 Undertaking for Costs.........................................34
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.....................................34
SECTION 602 Certain Duties and Responsibilities of Trustee................36
SECTION 603 Not Responsible for Recitals or Issuance of Securities........37
SECTION 604 May Hold Securities...........................................37
SECTION 605 Money Held in Trust...........................................37
SECTION 606 Compensation and Reimbursement................................37
SECTION 607 Corporate Trustee Required; Eligibility.......................38
SECTION 608 Resignation and Removal; Appointment of Successor.............38
SECTION 609 Acceptance of Appointment by Successor........................40
SECTION 610 Merger, Conversion, Consolidation or Succession to Business...41
SECTION 611 Disclosure of Names and Addresses of Holders..................41
SECTION 612 Reports by Trustee............................................41
ii
<PAGE> 4
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.................................41
SECTION 702 Successor Corporation Substituted.............................42
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures without Consent of Holders............42
SECTION 802 Supplemental Indentures with Consent of Holders...............43
SECTION 803 Execution of Supplemental Indentures..........................44
SECTION 804 Effect of Supplemental Indentures.............................44
SECTION 805 Conformity with Trust Indenture Act...........................44
SECTION 806 Reference in Securities to Supplemental Indentures............45
ARTICLE IX
COVENANTS
SECTION 901 Payment.......................................................45
SECTION 902 Maintenance of Office or Agency...............................45
SECTION 903 Money for Securities Payments to Be Held in Trust.............45
SECTION 904 Limitation on Liens...........................................47
SECTION 905 Waiver of Certain Covenants...................................47
SECTION 906 Officers' Certificate as to Default...........................47
SECTION 907 Payment of Expenses...........................................47
EXHIBIT A-1................................................................A-1
iii
<PAGE> 5
Salomon Smith Barney Holdings Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of
Trust Indenture
Act Section Indenture Section
ss. 310 (a)(1)............................................. 607
(a)(2)............................................. 607
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(a)(5)............................................. 607
(b)................................................ 608
(c)................................................ Not Applicable
ss. 311 (c)................................................ Not Applicable
ss. 312 (a)................................................ 611
(b)................................................ 611
(c)................................................ 611
ss. 313 (a)................................................ 612
(c)................................................ 612
ss. 314 (c)................................................ 102
(d)................................................ Not Applicable
(e)................................................ 102
ss. 315 (a)................................................ 601, 602(a)
(c)................................................ 602(b)
(d)................................................ 601, 602(c)
(e)................................................ 519
ss. 316 (a)(1)(A).......................................... 513
(a)(1)(B).......................................... 514
(a)(2)............................................. Not Applicable
(b)................................................ 517
ss. 317 (a)(1)............................................. 506
(a)(2)............................................. 516
(b)................................................ 903
ss. 318 (a)................................................ 107
- --------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of , 1999, between SALOMON SMITH BARNEY
HOLDINGS INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company") with principal executive offices
at 388 Greenwich Street, New York, New York 10013, and THE CHASE MANHATTAN BANK,
a New York banking corporation (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of certain securities (the "Securities")
representing interests in a forward contract relating to the Common Stock of
and having the terms set forth in this Indenture (the "Forward Contract"), which
will be purchased by TARGETS Trust II, a business trust established under the
laws of the State of Delaware (the "Trust"). This Indenture is subject to the
provisions of the Trust Indenture Act (as hereinafter defined) that are required
to be part of this Indenture and, to the extent applicable, shall be governed by
such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States; and, except as otherwise herein or in any
indenture supplemental hereto expressly provided, the term "generally
accepted accounting principles" with
<PAGE> 7
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Accelerated Maturity Date" has the meaning specified in Section
502.
"Accelerated Maturity Payment" has the meaning specified in Section
502.
"Acceleration Event" has the meaning specified in Section 501.
"Act," when used with respect to any Holder, has the meaning
specified in Section 103.
"Affiliate" of any specified Person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" has the meaning specified in Section 204.
"Appreciation Cap" has the meaning specified in Section 402.
"Authorized Newspaper" means a newspaper of general circulation in
the place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required hereunder,
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Board of Directors" means either the Board of Directors of the
Company, or the Executive Committee or any other duly authorized committee of
that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part of the
Securities, issued to the Depositary of Securities in accordance with Section
303, and bearing the legend prescribed in Section 303.
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed;
provided that, when used
2
<PAGE> 8
with respect to any Place of Payment, "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to the Securities.
"Closing Price" of the Common Stock or any marketable security on
any date of determination means the daily closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security as
reported on the New York Stock Exchange ("NYSE") or which is quoted on a
national securities market on such date of determination or, if such security is
not traded on NYSE or quoted on a national securities market on any such date,
as reported in the composite transactions for the principal United States
securities exchange on which if such security is so listed, or if such security
is not so listed on a United States national or regional securities exchange,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock of the Designated Issuer.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board or a
Vice-Chairman, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Treasurer, the Deputy Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date of initial execution of this Indenture is 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" per share of Common Stock as of a particular
date means the average of the Closing Prices of a share of Common Stock on each
of the 10 Trading Days immediately prior to but not including that particular
date.
3
<PAGE> 9
"Defaulted Yield Enhancement Payments" has the meaning specified in
Section 308.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, including Book-Entry Securities, the
Person designated as Depositary by the Company until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person
"Depositary" shall be a collective reference to such Persons.
"Designated Issuer" means , a corporation, together with
any successor entity in a merger, consolidation or amalgamation.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 403 (a), (b), (c) or (d).
"Dollar" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"Excess Purchase Payment" has the meaning providing in Section
403(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" has the meaning provided in Section 402.
"Forward Contract" has the meaning specified in the first recital of
this Indenture.
"Global Security" has the meaning specified in Section 204.
"Holder" means, with respect to a Security, the person in whose name
such Security is registered in the Security Register.
"Indenture" means this instrument originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"majority" of the Outstanding Securities means, except as otherwise
provided by the Trust Indenture Act, Outstanding Securities representing an
aggregate of more than 50% of all outstanding interests in the Forward Contract.
"Marketable Securities" has the meaning specified in Section 404.
"Maturity," when used with respect to the Forward Contract, means
the date on which the Maturity Payment or Accelerated Maturity Payment becomes
due and payable as the case may be and as therein or herein provided, whether on
the Maturity Date or an Accelerated Maturity Date.
4
<PAGE> 10
"Maturity Date" means .
"Maturity Payment" has the meaning specified in Section 402.
"New York Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York are permitted or
required by any applicable law to close.
"Officers' Certificate" means a written certificate containing the
information specified in Section 102 signed by the Chairman or a Vice Chairman
of the Board, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Controller, the Treasurer, the Deputy Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
which certificate complies with the applicable requirements of Section 314(e) of
the Trust Indenture Act, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to any Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; and
(iii) Securities that have been paid pursuant to Sections 402
or 502 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holder of the requisite
amount or percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting for quorum purposes, and for the purpose of making the calculations
required by Section 316 of the Trust Indenture Act, any Securities owned by the
Company or any other obligor upon such Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Any Securities so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the
5
<PAGE> 11
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor. In determining whether the
requisite percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, such percentage
refers to Outstanding Securities representing an aggregate interest in the
Forward Contract equaling at least such percentage.
"Paying Agent" means any Person authorized by the Company to pay
amounts owed on Securities on behalf of the Company.
"Payment Date" means , , and of each
year, or, in the case of Defaulted Yield Enhancement Payments, if any, the date
established for payment pursuant to Section 308.
"Permitted Dividend" has the meaning specified in Section 403(d).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities, means
the place or places where any amounts owed in respect of the Securities are
payable.
"Record Date" means, with respect to any Payment Date, either (i)
the day that is one Business Day prior to such Payment Date so long as the
Securities are in book-entry only form, or (ii) if the Securities are not in
book-entry only form, the day that is 15 days prior to such Payment Date.
"Reorganization Event" has the meaning specified in Section 404.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust officer, any
trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and, in any
case, that has direct responsibility for the administration of this Indenture
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means Salomon Smith Barney Inc. and any
Subsidiary which owns or may hereafter own, directly or indirectly, any of the
voting stock of, or succeeds to any substantial part of the business now
conducted by, Salomon Smith Barney Inc. For the purposes of this definition and
the definition of "Subsidiary", "voting stock" means stock having
6
<PAGE> 12
voting power for the election of directors, whether at all times or only for so
long as no senior class of stock has such voting power by reason of any
contingency.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 304.
"Special Record Date" means, for the payment of any Defaulted Yield
Enhancement Payments, if any, a date fixed by the Trustee pursuant to Section
308.
"Stated Amount" means $ .
"Subsidiary" means a corporation, a majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 403, means the average Closing Price
per share of the Common Stock for the Calculation Period of 10 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 403(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 10 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to the "Closing Price" definition. The
"ex-date" with respect to any dividend, distribution or issuance shall mean the
first date on which the shares of Common Stock trade regular way on their
principal market without the right to receive such dividend, distribution or
issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange,
securities market or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange, securities market or association or over-the-counter market that is
the primary market for the trading of such security.
"Transaction Value" has the meaning specified in Section 404.
"Trust" has the meaning specified in the first recital of this
Indenture.
7
<PAGE> 13
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 805.
"Trust Securities" has the meaning specified in Section 907.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Vice President," when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
"Yield Enhancement Payment" means % per annum of the Stated
Amount, accruing from , 1999, computed on the basis of a 360-day year of
twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month, together with, in the case of any
Defaulted Yield Enhancement Payment, interest thereon in accordance with Section
308.
SECTION 102 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of any such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 907) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
8
<PAGE> 14
(4) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
SECTION 103 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Any certificate or opinion delivered by the Company to the Trustee
may evidence a signature by facsimile; provided that the Company shall deliver
to the Trustee such certificate or opinion with an original signature within a
reasonable period of time.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders in person or by an agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of
9
<PAGE> 15
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
SECTION 104 Acts of Holders.
(a) The ownership of Securities shall be proved by the
Security Register, and the Depositary, or its nominee, shall be deemed the owner
of the Global Securities, and owners of beneficial interests in a Global
Security will not be considered the owners of any Securities.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(c) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
10
<PAGE> 16
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, by first-class mail, postage prepaid,
to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice to the Holders thereof shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, by first-class mail,
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Security Register, within the time prescribed for
the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of the
Trustee (which shall include, but not be limited to, hand-delivery or overnight
courier) shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
SECTION 107 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the
Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
11
<PAGE> 17
SECTION 110 Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112 Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 113 Legal Holidays.
In any case where any Maturity of any Security or any Payment Date
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities) payment at such Maturity
or Payment Date need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made at such Maturity or Payment Date, as the case
may be, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally.
The Securities shall be in substantially in the form of Exhibit A
hereto with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities are issued in global form as permitted by
Section 303, the form thereof also shall be established as provided in the
preceding sentence.
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SECTION 202 Definitive Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 203 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the form set forth below.
This is one of the Securities designated in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Signatory
SECTION 204 Securities in Global Form.
Except as provided in Section 304 hereof, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of certificated Securities. If Securities are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
or specified number of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate number of Outstanding Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount or changes in the rights of Holders of
Outstanding Securities represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein.
This Section 204 shall apply only to Securities issued in global
form ("Global Securities") and deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 204, authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's written instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, a Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
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prevent the Company, the Trustee, or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security.
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued.
Securities evidencing an aggregate beneficial interest in the
Forward Contract of not more than 100% may be authenticated and delivered under
this Indenture. All Securities shall be substantially identical in form except
for the beneficial interest in the Forward Contract represented thereby.
SECTION 302 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by the
Chairman or a Vice Chairman of the Board, a Vice President, the Chief Financial
Officer or the Chief Accounting Officer, under its corporate seal reproduced
thereon attested by the signature of its Secretary or one of its Assistant
Secretaries or its Treasurer, the Deputy Treasurer or one of its Assistant
Treasurers. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.
The Trustee shall have the right to decline to authenticate and
deliver such Securities if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken or if the Trustee in good faith by
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
If all of the Securities are not to be originally issued at the same
time, then the documents required to be delivered pursuant to this Section 302
must be delivered only once, prior to the authentication and delivery of the
first Security; provided, however, that any
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subsequent request by the Company to the Trustee to authenticate Securities upon
original issuance shall constitute a representation and warranty by the Company
that, as of the date of such request, the statements made in any Opinion of
Counsel delivered pursuant to this Section 302 shall be true and correct as if
made on such date.
If Securities are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order, authenticate and deliver one or more Securities
in global form that (i) shall represent the number of the Outstanding Securities
to be represented by such Global Securities, (ii) shall be registered, if in
registered form, in the name of the Depositary for such Book-Entry Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Unless and until it
is exchanged in whole or in part for Securities in certificated form, this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary" or to such other
effect as the Depositary and the Trustee may agree.
Each Depositary designated for a Book-Entry Security in registered
form must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation. The Trustee shall have no responsibility to
determine if the Depositary is so registered. Each Depositary shall enter into
an agreement with the Trustee governing their respective duties and rights with
regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
The Trustee may appoint an authenticating agent (each, an
"Authentication Agent") to authenticate the Securities. Any Authenticating Agent
may authenticate Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by any
such Authenticating Agent.
SECTION 303 Global Securities; Temporary Securities.
(a) No definitive Security shall be issued in exchange for a
Global Security deposited with the Depositary pursuant to Section 302
representing any Securities unless such transfer complies with Section 304 of
this Indenture and (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Global Security or,
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in the case of a Depositary located in the United States, if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Issuer within 90 days of such
notice or (ii) the Company determines not to have the Securities represented by
a Global Security; provided, however, that the Company may not make such
determination during any period during which the Securities must be held in
global form as may be required by the Securities Act.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 303 shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate number of Securities.
Any portion of a Global Security transferred pursuant to this Section 303 shall
be executed, authenticated and delivered as specified in Section 304 and
registered in such names as the Depositary shall direct.
(c) Subject to the provisions of Section 303(b) above, the
registered holder of a Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a holder is entitled to take under this
Indenture or such Securities.
(d) In the event of the occurrence of any of the events
specified in paragraph (a) of this Section 303 the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which may be in global form, that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. The definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such definitive Securities. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of such temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 902,
without charge to the Holder in a Place of Payment. Upon surrender for
cancellation of any temporary Securities, the Company shall execute, and the
Trustee shall authenticate and deliver, in exchange therefor the same aggregate
number of definitive Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
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SECTION 304 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company maintained pursuant to Section 902 in a Place of
Payment being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency maintained pursuant to Section 902 in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities,
evidencing a like aggregate beneficial interest in the Forward Contract.
At the option of the Holder, Securities (except a Global Security
representing all or a portion of the Securities which may be exchanged in
accordance with Section 303 hereof) may be exchanged for other Securities
evidencing a like aggregate interest in the Forward Contract, upon surrender of
the Securities to be exchanged at such office or agency.
If at any time the Depositary for the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities or if at any time the Depositary for the Securities shall no longer
be eligible under Section 302, the Company shall appoint a successor Depositary
with respect to the Securities.
The Depositary may surrender a Global Security in exchange in whole
or in part for Securities in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge, to each
Person specified by such Depositary a new certificated Security or Securities of
like tenor, in aggregate number equal to and in exchange for such Person's
beneficial interest in the Global Security, and to such Depositary a new Global
Security of like tenor representing an aggregate number of securities equal to
the difference, if any, between the aggregate beneficial interest in the Forward
Contract represented by the surrendered Global Security and the aggregate
beneficial interest in the Forward Contract represented by the certificated
Securities delivered to Holders thereof.
Upon the exchange in full of a Global Security for Securities in
certificated form, such Global Security shall be canceled by the Trustee. Except
as provided in Section 303(a) and (b) hereof, Securities issued in exchange for
a Book-Entry Security pursuant to this Section shall be registered in such names
as the Depositary for such Book-Entry Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall make available such Securities to the Persons in whose names
such Securities are so registered.
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Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
obligation, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange. The
Trustee shall have no liability for any transfers or exchanges of the Securities
in accordance with the provisions of this Indenture being in compliance with the
Securities Act or any other applicable law.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Securities Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 303 or 806 not involving
any transfer.
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and evidencing a like aggregate beneficial
interest in the Forward Contract.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
a new Security evidencing a like aggregate beneficial interest in the Forward
Contract.
Upon the issuance of any new Security under this Section, the
Company or the Securities Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone,
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and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of any mutilated, destroyed, lost or stolen Securities.
SECTION 306 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment in respect of amounts owed on such
Security and for all other purposes whatsoever, whether or not such payments
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary; provided,
however, that the Depositary, or its nominee, shall be deemed the owner of any
Global Securities registered in its name, and owners of beneficial interests in
a Global Security will not be considered the owners of any Securities for
purposes of this Indenture.
SECTION 307 Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be destroyed by the
Trustee and a certificate evidencing such destruction shall be delivered to the
Company.
SECTION 308 Yield Enhancement Payments.
A pro rata portion (based on the beneficial interest in the Forward
Contract represented by each of the Securities) of the Yield Enhancement
Payment, if any, shall be remitted (a) by the Company to the Paying Agent prior
to 10:00 am on each Payment Date and (b) thereafter by the Paying Agent on each
Payment Date to the Persons in whose name such Securities are registered at the
close of business on the Record Date therefor. At least 5 Business Days prior to
the applicable Record Date, the Company shall notify the Trustee in writing of
the aggregate amount of the Yield Enhancement Payment, if any, to be paid on
each Payment Date.
In the event of acceleration of maturity of the Forward Contract to
an Accelerated Maturity Date occurring after any Record Date and on or prior to
the next succeeding Payment Date, Yield Enhancement Payments, if any, otherwise
payable on such Payment Date shall be payable on the Accelerated Maturity Date,
and such Yield Enhancement Payments (in the amounts determined as provided
above) shall be paid to the Persons in whose name the
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Securities are registered at the close of business on such Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of acceleration of maturity of the Forward Contract to an Accelerated
Maturity Date, Yield Enhancement Payments, if any, that would otherwise be
payable after the Accelerated Maturity Payment with respect to the Forward
Contract shall not be payable.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer making Yield Enhancement Payments
during the period until the Maturity Date or the Accelerated Maturity Date, as
the case may be. Yield Enhancement Payments, if any, which are payable, but are
deferred by the Company and not punctually paid or duly provided for, on any
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Record Date by virtue of having been such Holder, and such Yield Enhancement
Payments, together with, to the extent permitted by applicable law, interest
thereon at the rate of % compounded quarterly for each quarter until such Yield
Enhancement Payments are paid (herein called "Defaulted Yield Enhancement
Payments"), may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Yield Enhancement Payments, if any, to the Persons in whose names the
Securities are registered at the close of business on a Special Record
Date for the payment of such Defaulted Yield Enhancement Payments, if any,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing at least one Business Day prior to the Payment Date on
which Yield Enhancement Payments would otherwise be payable of the
aggregate amount of Defaulted Yield Enhancement Payments, if any, proposed
to be paid on the Securities and the date of the proposed payment.
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Yield Enhancement Payments, if any, which shall be (i) not
more than 15 Business Days and not less than 10 Business Days prior to the
date of the proposed payment or (ii) if the Company proposes to pay such
Defaulted Yield Enhancement Payments as part of the Maturity Payment, the
Record Date with respect to the Maturity Date. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Yield Enhancement Payments, if any, and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities at such Holder's address as it appears in the Security
Register, not less than 10 Business Days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Yield Enhancement
Payments, if any, and the Special Record Date therefor having been so
mailed, such Defaulted Yield Enhancement Payments, if any, shall be paid
to the Person in whose name the Securities are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2),
(2) The Company may make payment of any Defaulted Yield
Enhancement Payments, if any, in any other lawful manner not inconsistent
with the requirements of any stock exchange or national securities market
on which any securities issued by the Trust are listed, and upon such
notice as may be required by such exchange
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or market, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
At the option of the Company, Yield Enhancement Payments, if any,
shall be remitted by the Trustee (i) by mailing a check to the address of the
persons entitled thereto as such address shall appear in the Security Register
or (ii) by wire transfer to an account maintained by the persons entitled
thereto as specified in the applicable Security Register if such person (a)
shall have provided wire instructions to the Paying Agent at least five (5)
Business Days prior to the relevant Record Date and (b) holds an aggregate
Security representing the right to receive, at maturity, at least $5,000,000.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to Yield Enhancement
Payments, if any, accrued and unpaid, and to be accrued, which were carried by
such other Security.
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities (except as to any surviving rights of
registration of transfer or exchange of Securities and replacement of lost,
stolen or mutilated Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either
(A) all Securities theretofore authenticated and
delivered have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company
has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge all amounts owed in respect of such Securities not
theretofore delivered to the Trustee for cancellation.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of this
Section, the obligations of the Trustee under the last paragraph of Section 903,
shall survive.
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SECTION 402 Maturity.
Subject to earlier acceleration of maturity in accordance with
Article V hereof, on the Maturity Date the Company shall be obligated to pay to
the Holders, in respect of the Securities held by them, an amount in cash (the
"Maturity Payment") equal to a pro rata portion (based on the beneficial
interest in the Forward Contract represented by such Securities) of the sum of
(A) the product of (i) multiplied by (ii) the Current Market Price of the
Common Stock as of the date one New York Business Day prior to the Maturity Date
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Maturity Date.
The "Exchange Rate" shall be determined in accordance with the
following formula, subject to adjustment as a result of certain events as
provided in Sections 403, 404 and 405: (i) if the Current Market Price of the
Common Stock as of the Maturity Date or the Accelerated Maturity Date, as the
case may be, is less than or equal to $ (the "Appreciation Cap"), then the
Exchange Rate shall be , and (ii) if the Current Market Price of the Common
Stock as of the Maturity Date or the Accelerated Maturity Date, as the case may
be, is greater than the Appreciation Cap, then the Exchange Rate shall be a
fraction (rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th), of which the numerator
is the Appreciation Cap, and of which the denominator is the Current Market
Price of the Common Stock as of the Maturity Date or the Accelerated Maturity
Date, as the case may be.
SECTION 403 Dilution Adjustments.
The Exchange Rate and the Appreciation Cap shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends, Splits Reclassifications. Etc. If the
Designated Issuer shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect
to Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock
into a greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares; or
(iv) issue by reclassification of shares of its Common Stock
any shares of other common stock of the Designated Issuer;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Designated Issuer issued pursuant
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thereto), or the fraction thereof that a holder who held one share of Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Cap shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Designated Issuer
shall, after the date hereof, issue, or declare a record date in respect of an
issuance of, rights or warrants to all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Then-Current Market Price of the Common Stock (other than rights to purchase
Common Stock pursuant to a plan for the reinvestment of dividends or interest),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the time the adjustment
is effected by reason of the issuance of such rights or warrants, plus the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to the time the
adjustment is effected, plus the number of additional shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered for subscription or purchase pursuant to such rights or warrants
would purchase at the Then-Current Market Price of the Common Stock, which shall
be determined by multiplying the total number of shares so offered for
subscription or purchase by the exercise price of such rights or warrants and
dividing the product so obtained by such Then-Current Market Price. To the
extent that, after the expiration of such rights or warrants, the shares of
Common Stock offered thereby shall not have been delivered, the Exchange Rate
shall be further adjusted to equal the Exchange Rate which would have been in
effect had such adjustment for the issuance of such rights or warrants been made
upon the basis of delivery of only the number of shares of Common Stock actually
delivered. The Appreciation Cap shall also be adjusted in the manner described
in paragraph (e).
(c) Distributions of Other Assets. If the Designated Issuer
shall, after the date hereof, declare or pay a dividend or make a distribution
to all holders of Common Stock, in either case, of evidences of its indebtedness
or other non-cash assets (excluding any dividends or distributions referred to
in paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
the numerator of which shall be the Then-Current Market Price per share of the
Common Stock, and the denominator of which shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) as of the time the adjustment is
effected of the portion of the assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of Common Stock. The
Appreciation Cap shall also be adjusted in the manner described in subparagraph
(e). Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which this paragraph (c) would otherwise apply, the
denominator in the fraction referred to above formula is less than $1.00 (or is
a negative number), then the Company may, at its option, elect to have the
adjustment provided by this
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paragraph (c) not be made and in lieu of such adjustment, on the Maturity Date,
the Company shall deliver to the Holders of the Securities an additional amount
of cash equal to the fair market value of such indebtedness, assets, rights or
warrants (determined, as of the date such dividend or distribution is made, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination shall be final) so distributed or
issued.
(d) Cash Dividends; Excess Purchase Payments. If, after the
date hereof, the Designated Issuer declares a record date in respect of a
distribution of cash (other than any Permitted Dividends, any cash distributed
in consideration of fractional shares of Common Stock and any cash distributed
in a Reorganization Event), by dividend or otherwise, to all holders of Common
Stock, or makes an Excess Purchase Payment, then the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Common Stock on such record date,
and the denominator of which shall be such Then-Current Market Price less the
amount of such distribution applicable to one share of Common Stock which would
not be a Permitted Dividend (or in the case of an Excess Purchase Payment, less
the aggregate amount of such Excess Purchase Payment for which adjustment is
being made at such time divided by the number of shares of Common Stock
outstanding on such record date). For purposes of these adjustments, (A)
"Permitted Dividend" means any quarterly cash dividend in respect of Common
Stock, other than a quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the extent that the per
share amount of such dividend results in an annualized dividend yield on the
Common Stock in excess of 10.0% and (B) "Excess Purchase Payment" means the
excess, if any, of (x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) of all other consideration paid by
the Designated Issuer or any of its subsidiaries with respect to one share of
Common Stock acquired in a tender offer or exchange offer by the Designated
Issuer or any of its subsidiaries, over (y) the Then-Current Market Price of the
Common Stock. The Appreciation Cap shall also be adjusted in the manner
described in subparagraph (e). Notwithstanding the foregoing, in the event that,
with respect to any dividend or distribution to which this paragraph (d) would
otherwise apply, the denominator in the fraction referred to above formula is
less than $1.00 (or is a negative number), then the Company may, at its option,
elect to have the adjustment provided by this paragraph (d) not be made and in
lieu of such adjustment, on the Maturity Date, the Company shall deliver to the
Holders of the Securities an additional amount of cash equal to the amount of
cash plus the fair market value of such other consideration (determined, as of
the date such dividend or distribution is made, by a nationally recognized
independent investment banking firm retained for this purpose by the Company,
whose determination shall be final) so distributed (or applied to the
acquisition of the Common Stock in such a tender offer or exchange offer).
(e) Adjustments to Appreciation Cap and Closing Prices. (i) If
any adjustment is made to the Exchange Rate pursuant to paragraph (a), (b), (c)
or (d) this Section 403, an adjustment shall also be made to the Appreciation
Cap. The required adjustment shall be made by dividing the Appreciation Cap by
the relevant Dilution Adjustment.
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(ii) If, during any Calculation Period used in calculating the
Current Market Price, the Then-Current Market Price or the Transaction Value,
there shall occur any event requiring an adjustment to be effected pursuant to
this Section 403, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution or issuance, at
the opening of business on the Business Day next following the record date
for determination of holders of Common Stock entitled to receive such
dividend, distribution or issuance or, if the announcement of any such
dividend, distribution, or issuance is after such record date, at the time
such dividend, distribution or issuance shall be announced by the
Designated Issuer;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Designated Issuer shall announce, at or prior to the time it commences the
relevant share repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment on the
date that the holders of the repurchased shares become entitled to payment
in respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
Section 403 shall subsequently be canceled by the Designated Issuer, or such
dividend, distribution, issuance or repurchase shall fail to receive requisite
approvals or shall fail to occur for any other reason, then, upon such
cancellation, failure of approval or failure to occur, the Exchange Rate shall
be further adjusted to the Exchange Rate which would then have been in effect
had adjustment for such event not been made. If a Reorganization Event shall
occur after the occurrence of one or more events requiring an adjustment
pursuant to this Section 403, the Dilution Adjustments previously applied to the
Exchange Rate in respect of such events shall not be rescinded but shall be
applied to the new Exchange Rate provided for under Sections 404 and 405.
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SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Designated
Issuer, or any surviving entity or subsequent surviving entity of the Designated
Issuer (a "Designated Issuer Successor"), with or into another entity (other
than a merger or consolidation in which the Designated Issuer is the continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property
of the Designated Issuer or another Person), (ii) any sale, transfer, lease or
conveyance to another Person of the property of the Designated Issuer or any
Designated Issuer Successor as an entirety or substantially as an entirety,
(iii) any statutory exchange of securities of the Designated Issuer or any
Designated Issuer Successor with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Designated Issuer or any Designated Issuer Successor (any such event described
in clause (i), (ii), (iii) or (iv), a "Reorganization Event"), the Exchange Rate
shall be adjusted so that, on the Maturity Date, the Holders of the Securities
shall receive cash in an amount equal to the product of the number of Trust
Securities held by such Holder multiplied by (i) if the Transaction Value is
less than or equal to the Appreciation Cap, times the Transaction Value, and
(ii) if the Transaction Value is greater than the Appreciation Cap, times the
Appreciation Cap.
"Transaction Value" means the sum of: (a) for any cash received in
any such Reorganization Event, the amount of cash received per share of Common
Stock; (b) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination shall
be final); and (c) for any Marketable Securities received in any such
Reorganization Event, an amount equal to the average Closing Price per share of
such Marketable Securities for the Calculation Period of 10 Trading Days
immediately prior to the date one New York Business Day prior to the Maturity
Date multiplied by the number of such Marketable Securities received for each
share of Common Stock; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days
such Trading Day shall be disregarded in the calculation of such average Closing
Price (but no additional trading days shall be added to the Calculation Period).
If no Closing Price for the Marketable Securities may be determined for all such
Trading Days, the calculation in the preceding clause (c) shall be based on the
most recently available Closing Price for the Marketable Securities prior to
such 10 Trading Days.
"Marketable Securities" means any perpetual equity securities or
debt securities with a stated maturity after the Maturity Date, in each case
that are listed on a U.S. national securities exchange or reported by the Nasdaq
National Market. The number of shares of any equity securities constituting
Marketable Securities included in the calculation of Transaction Value pursuant
to the preceding clause (c) shall be subject to adjustment if any event that
would, had it occurred with respect to the Common Stock or the Designated
Issuer, have required an adjustment pursuant to Section 403 shall occur with
respect to such Marketable Securities or the
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issuer thereof between the time of the Reorganization Event and the Maturity
Date. Adjustment for such subsequent events shall be as nearly equivalent as
practicable to the adjustments provided for in Section 403.
SECTION 405 Adjustments of Exchange Rate.
The Company shall be responsible for the effectuation and
calculation of any adjustment pursuant this Article IV and shall furnish the
Trustee with notice of any such adjustment. The Trustee shall be under no duty
or obligation to review or determine any calculations, adjustments, dividend
calculations, determination of either the Maturity Payment or Accelerated
Maturity Payment payable hereunder, exchange rate determinations or any other
calculation set forth in this Article IV or in Section 502 hereof.
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events.
"Acceleration Event," wherever used herein, means any one of the
following events:
(a) the entry of a decree or order for relief in respect of
the Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(b) the commencement by the Company of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action; or
(c) the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been (a) an amendment to, change in or announced proposed change
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying, or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of an official position) of the governmental
authority or regulatory body making
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such administrative pronouncement or taking such action, or (d) a threatened
challenge asserted in connection with an audit of the Company, any of its
subsidiaries or the Trust, or a threatened challenge asserted in writing against
any other taxpayer that has raised capital through the issuance of securities
that are substantially similar to the Securities or the TARGETS, which amendment
or change is adopted or which proposed change, decision or pronouncement is
announced or which action, clarification or challenge occurs on or after the
date of the Prospectus relating to the original issuance of the TARGETS
(collectively a "Tax Action"), which Tax Action relates to any of the items
described in (i) and (ii) below, and that there is more than an insubstantial
risk that (i) the Trust is, or will be subject to United States federal income
tax with respect to income accrued or received in respect of the Forward
Contract or the Treasury Securities, or (ii) the Trust is, or will be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges; or
(d) the receipt by the Company of an opinion of a nationally
recognized independent counsel experienced in such matters to the effect that as
a result of the occurrence on or after the date hereof of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
SECTION 502 Acceleration of Maturity.
(a) If an Acceleration Event described in Section 501 shall
occur and be continuing, then the Company shall give written notice thereof to
the Trustee, which notice shall include a statement as to the amount of the
Accelerated Maturity Payment. On the Accelerated Maturity Date the Forward
Contract shall be automatically accelerated and the Accelerated Maturity Amount
shall be immediately due and payable. Upon receipt by the Trustee of the
Accelerated Maturity Amount, the Trustee shall remit to the Holders, in respect
of the Securities held by them, an amount in cash (the "Accelerated Maturity
Payment") equal to a pro rata portion (based on the beneficial interest in the
Forward Contract represented by such Securities) of the sum of (A) the product
of (i) multiplied by (ii) the Current Market Price of the Common Stock as of
the date one New York Business Day prior to the Accelerated Maturity Date,
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Accelerated Maturity Date.
(b) As used herein, the "Accelerated Maturity Date" means the
date of the occurrence of the event or events constituting such Acceleration
Event.
(c) The Company agrees, and each Holder of Securities, by such
Holder's acceptance thereof, agrees that the Accelerated Maturity Amount is a
reasonable pre-estimate of loss to such Holder and is not a penalty. Such amount
is payable for the loss of bargain and a Holder will not be entitled to recover
additional damage as a consequence of loss resulting from any Acceleration
Event.
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SECTION 503 Taxes.
The Company shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Indenture and the performance of its obligations hereunder.
SECTION 504 Treatment of Forward Contract.
The Company hereby agrees that: (i) it will not treat this
Indenture, any portion of the Securities, or any obligation hereunder (except in
regards to any Yield Enhancement Payments (if any)) as giving rise to any
interest income or other inclusion of ordinary income on the part of the Holders
of the Securities; (ii) it will not treat the delivery of any portion of the
cash to be delivered pursuant to this Indenture (except in regards to any Yield
Enhancement Payments (if any)) as the payment of interest or ordinary income;
(iii) it will treat this Indenture in its entirety as a forward contract for the
delivery of such cash under the terms of which contract (a) at the time of
issuance of the Securities the Holder deposits irrevocably with the Company a
fixed amount of cash equal to the purchase price of the Securities to assure the
fulfillment of the Holder's purchase obligation described in clause (c) below,
which deposit will unconditionally and irrevocably be applied at Maturity to
satisfy such obligation, (b) until Maturity the Company may be obligated to pay
Yield Enhancement Payments on such deposit as compensation to the Holder for the
Company's use of such cash deposit during the term of the Securities, and (c) at
Maturity such cash deposit unconditionally and irrevocably will be applied by
the Company in full satisfaction of the Holder's obligation under the forward
purchase contract, and the Company will deliver to the Holder the amount of cash
that the Holder is entitled to receive at that time pursuant to the terms of the
Securities; and (iv) it will not take any action (including filing any tax
return or form or taking any position in any tax proceeding) that is
inconsistent with the obligations contained in the foregoing clauses (i) through
(iii). Notwithstanding the preceding sentence, the Company may take any action
or position required by law, provided that the Company delivers to the Trustee
an opinion of counsel, nationally recognized as expert in Federal tax matters,
to the effect that such action or position is required by a statutory change,
Treasury regulation, or applicable court decision published after the date of
this Indenture.
SECTION 505 Notices.
The Company will or will cause to be delivered to the Trustee and to
each Holder:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder, or upon the Company's obtaining knowledge that any of the conditions
or events described in Section 501(a) or (b) shall have occurred with respect to
the Designated Issuer, notice of such occurrence; and
(b) In case at any time prior to the Maturity Date the Company
receives notice, or otherwise obtains knowledge, that any event requiring that
an adjustment be effected pursuant to Sections 403, 404 and 405 hereof shall
have occurred or be pending, then the Company shall promptly cause to be
delivered to the Trustee and each Holder a notice identifying such event and
stating, if known to the Company, the date on which such event is to occur and,
if applicable, the record date relating to such event. The Company shall cause
further notices to be delivered to the Trustee and each Holder if the Company
shall subsequently receive notice, or otherwise obtain knowledge, of any further
or revised information regarding the terms or timing of such event or any record
date relating thereto.
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by Trustee.
The Company covenants that if default is made in the payment of
amounts owed on any Security at Maturity, the Company will, upon demand of the
Trustee, pay to it, for the
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benefit of the Holders of such Securities the whole amount then due and payable
on such Securities and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and shall
at the direction of the Holders of a majority of the Outstanding Securities,
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, prosecute such proceeding to judgment or final decree,
and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, enforce the same against the Company or any other
obligor upon such Securities, and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or any
other obligor upon such Securities wherever situated.
If an Acceleration Event occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of the Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 507 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expense,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 508 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of the Securities, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
606; and
Second: To the payment of the amounts then due and unpaid on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities.
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Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 509 Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has (i) previously given written notice to the
Trustee of a continuing Acceleration Event with respect to the Forward
Contract and (ii) the Holders of not less than 25% of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Acceleration Event in its own name as
Trustee hereunder;
(2) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(3) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(4) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Securities; it being understood and intended
that no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other of such Holders,
or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of
Holders. For the protection and enforcement of the provisions of this
Section 509, each and every Holder of Securities and the Trustee shall be
entitled to such relief as can be given at law or in equity.
SECTION 510 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 511 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of a mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 305, no right or
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remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 512 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Acceleration Event
shall impair any such right or remedy or constitute a waiver of any such
Acceleration Event or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 513 Control by Holders.
The Holders of a majority of the Outstanding Securities shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed would
be unjustly prejudicial to the Holders of Securities not joining in any
such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 514 Waiver of Past Defaults.
The Holders of not less than a majority of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
default hereunder and its consequences, except a default in the payment of
amounts owed in respect of any Security, or in respect of a covenant or
provision hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Acceleration Event arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture,
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but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 515 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516 Filing Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, competition or
other judicial proceedings, or any voluntary or involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, relative to the
Company or any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the amount owed on such Securities shall then be due and payable as
therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of amounts due on the Securities) shall be entitled and
empowered, any intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amounts owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders of
such Securities allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606 of this Indenture.
Nothing herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt, on behalf of any Holder any plan or
reorganization, arrangement, adjustment
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or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in such
proceeding.
SECTION 517 Unconditional Right of Holders to Receive Payments.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the amounts owed on such Security and to institute suit for
the enforcement of any such payment and interest thereon, and such right shall
not be impaired without the consent of the Holder.
SECTION 518 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 519 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section 519 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% of the Outstanding Securities, or to any suit
instituted by any Holder of a Security for the enforcement of the payment of
amounts owed on such Security on or after the Maturity Date or Accelerated
Maturity Date.
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, certification, order, act or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may at any time (i) consult with counsel and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and (ii) seek instructions
concerning the administration of this Indenture from any court of competent
jurisdiction;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have provided to the Trustee reasonable security or indemnity against the
costs, expenses (including attorney's fees and expenses and the expenses of the
Trustee's agents, nominees and custodians) and liabilities which might be
incurred by it in compliance with such request or direction including such
reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(including, without limitations, any instruments or certificates delivered
pursuant to Section 304 hereof), but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it;
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(i) the granting of any right to the Trustee hereunder shall
not be deemed to impose on the Trustee an obligation to exercise such rights,
subject to Section 601(j); and
(j) the Trustee shall not be obligated to take any action or
to exercise any remedy hereunder unless directed to do so by the Holders of a
majority of the Securities then Outstanding and shall have no liability for its
failure to act pending receipt by it of any such direction.
This Section 601 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 602 Certain Duties and Responsibilities of Trustee.
(a) Except upon the occurrence of an Acceleration Event;
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Acceleration Event with respect to the
Securities, of which a Responsible Officer of the Trustee has actual knowledge,
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
Outstanding Securities determined as provided in Section 513,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect
to the Securities; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or indemnity, reasonably satisfactory to it, against such risk
or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 603 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 604 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee
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of an express trust as set forth in a separate fee letter between
the Trustee and the Company);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise of
performance of any of its powers or duties hereunder.
SECTION 607 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be
eligible to act as Trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
SECTION 608 Resignation and Removal; Appointment of Successor.
(a) The Trustee may resign at any time with respect to the
Securities upon giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 609 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.
(b) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of a majority of the Outstanding Securities,
delivered to the Trustee and to the Company.
(c) If at any time:
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(1) the Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(c) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities (it being understood that any such successor Trustee may be appointed
with respect to the Securities and that at any time there shall be only one
Trustee with respect to the Securities) and shall comply with the applicable
requirements of Section 609. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities shall be appointed by Act of the Holders of a majority
of the Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 609,
become the successor Trustee with respect to the Securities and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 609, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities and each appointment of a
successor Trustee with respect to the Securities in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities and the address of its Corporate Trust Office.
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SECTION 609 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under the Trust Indenture Act.
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SECTION 610 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 611 Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders of
Securities in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
SECTION 612 Reports by Trustee.
Within 60 days after April 15 of each year commencing with the first
May 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in Trust
Indenture Act Section 313(c) a brief report dated as of such April 15 if
required by Trust Indenture Act Section 313(a).
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the
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Trustee, in form satisfactory to the Trustee, the due and punctual
payment of amounts owed on all Securities and the performance of
every covenant of this Indenture on the part of the Company to be
performed or observed,
(2) immediately after giving effect to such transaction,
no Acceleration Event, and no event which, after notice or lapse of
time or both, would become an Acceleration Event, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 702 Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
701, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company; or
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(3) to add any additional Acceleration Events with
respect to the Forward Contract; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of the Securities in bearer form,
registrable or not registrable, or to provide for an uncertificated
(commonly known as "book-entry") Security on terms satisfactory in
substance to the Trustee; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Security which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 609(b); or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall
not adversely affect the interests of the Holders of Securities in
any material respect.
SECTION 802 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, however, that no
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Maturity of the Forward Contract, or
reduce the Maturity Payment payable on the Maturity Date, or reduce
the Accelerated Maturity Payment that would be due and payable on an
Accelerated Maturity Date pursuant to Section 502, or reduce the
Yield Enhancement Payments, if any, that would be due and payable
pursuant to Section 308, or change the coin or currency in which
amounts owed in respect of the Forward Contract are payable, or
impair the right to institute suit for the enforcement of any such
payment, on or after the Maturity thereof, or reduce the percentage
of the Outstanding Securities, the
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consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in
this Indenture, or
(2) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 902, or
(3) modify any of the provisions of this Section 802,
Section 515, or Section 905, except to increase any such percentage
in Section 905 to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of Sections 608(b)
and 801(7).
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 803 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel, the
preparation of which shall not be at the expense of the Trustee, stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 804 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 805 Conformity with Trust Indenture Act.
After this Indenture is qualified pursuant to the Trust Indenture
Act, every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 806 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
any new Securities so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE IX
COVENANTS
SECTION 901 Payment.
The Company covenants and agrees for the benefit of the Holders of
the Securities that it will duly and punctually pay all amounts owed on the
Securities in accordance with the terms of the Securities and this Indenture.
SECTION 902 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for the
Securities an office or agency where the Securities may be presented or
surrendered for payment, where the Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof; such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for the Securities for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 903 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any Securities, it will, on or before each due date of amounts owed
on such Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the amounts
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owed so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it will, prior to each due date of amounts owed in
respect of the Securities, deposit with any such Paying Agent a sum sufficient
to pay the amounts owed in respect of the Securities so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent of the Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of amounts
owed in respect to the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of
any payment of amounts owed in respect to the Securities; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the amounts owed in respect to
any Security and remaining unclaimed for two years after such amount has become
due and payable shall be paid to the Company on Company Request along with any
interest that has accumulated thereon as a result of such money being invested
at the direction of the Company, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
amounts without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
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published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.
SECTION 904 Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
to, incur, issue, assume guarantee or suffer to exist any indebtedness for
borrowed money (indebtedness for borrowed money being hereinafter in this
section called "debt") if such debt is secured by a pledge of, lien on, or
security interest in any shares of stock of any Restricted Subsidiary, whether
such stock is now owned or shall hereafter be acquired, without effectively
providing that the Securities shall be secured equally and ratably with such
debt.
SECTION 905 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant, set forth herein, if before the time for such compliance, the Holders
of at least a majority of the Outstanding Securities shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant, but no such waiver shall extend to or affect such
covenant except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant shall remain in full force and effect.
SECTION 906 Officers' Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not
more than four months after the end of each fiscal year of the Company (which on
the date hereof is the calendar year) ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observation of any of the
terms, provisions and conditions of this Indenture, and, if the Company shall be
in default, specifying all such defaults and the nature thereof of which they
may have knowledge.
The Company will deliver written notice to the Trustee promptly
after any officer of the Company has knowledge of the occurrence of any event
that with the giving of notice or the lapse of time or both would become an
Acceleration Event under Section 501.
SECTION 907 Payment of Expenses.
(a) In connection with the offering, sale and issuance of the
Securities and in connection with the sale of any securities by the Trust
(collectively, the "Trust Securities"), the Company, in its capacity as issuer
with respect to the Securities, shall:
(i) pay all costs and expenses relating to the offering,
sale and issuance of the Trust Securities, including
commissions and
47
<PAGE> 53
compensation to the underwriters payable pursuant to any
applicable underwriting agreement and compensation of
the Trustee under this Indenture in accordance with the
provisions of Section 606;
(ii) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and
issuance of the Trust Securities of the Trust (including
commissions and compensation to the underwriters in
connection therewith), the fees and expenses of the
Institutional Trustee, the Regular Trustees and the
Delaware Trustee of the Trust, the costs and expenses
relating to the operation, maintenance and dissolution
of the Trust and the enforcement by the Institutional
Trustee of the rights of the holders of the Trust
Securities, including without limitation, costs and
expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of
assets of the Trust);
(iii) be primarily liable for any indemnification obligations
arising with respect to the Declaration of the Trust and
the Amended and Restated Declaration of the Trust; and
(iv) pay any and all taxes (other than United States
withholding taxes in respect of amounts paid on the
Securities held by the Trust) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
(b) Upon termination of this Indenture or the Securities or
the removal or resignation of the Trustee pursuant to Section 608, the Company
shall pay to the Trustee all amounts accrued and owing to the Trustee to the
date of such termination, removal or resignation. Upon termination of the
Amended and Restated Declaration of the Trust or the removal or resignation of
the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant
to Section 5.6 of the Amended and Restated Declaration of the Trust, the Company
shall pay to such Delaware Trustee or such Institutional Trustee, as the case
may be, all amounts accrued and owing to such Delaware Trustee or such
Institutional Trustee, as the case may be, to the date of such termination,
removal or resignation.
48
<PAGE> 54
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SALOMON SMITH BARNEY HOLDINGS INC.
By:
------------------------------------
Name:
Title:
[SEAL]
Attest:
- -------------------------------
THE CHASE MANHATTAN BANK, Trustee
By:
------------------------------------
Name:
Title:
[SEAL]
Attest:
- -------------------------------
49
<PAGE> 55
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this day of , before me personally appeared
, to be known, who, being by me duly sworn, did depose and say that
he is a of SALOMON SMITH BARNEY HOLDINGS INC., the corporation
described in and which executed the foregoing instrument; that he knows the seal
of the said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the board of directors of
said corporation; and that he signed his name thereto by like authority.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
------------------------------
Notary Public
[Notarial Seal]
50
<PAGE> 56
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , before me personally appeared
, to me known, who, being by me duly sworn, did depose and say that
she is a of The Chase Manhattan Bank, the New York banking
corporation described in and which executed the forgoing instrument; that she
knows the seal of said New York banking corporation; that the seal affixed to
said instrument is such seal; that it was so affixed by authority of the Board
of Directors of said New York banking corporation, and that she signed her name
thereto by like authority.
------------------------------
Notary Public
[Notarial Seal]
51
<PAGE> 57
EXHIBIT A
NO. 1
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
SALOMON SMITH BARNEY HOLDINGS INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person), for value received, hereby certifies that The
Chase Manhattan Bank, as Institutional Trustee of TARGETS Trust II, or
registered assigns, is the owner of a 100% interest in the Forward Contract (as
defined in the Indenture referred to below) and, as such, is entitled to receive
from the Company its pro rata share of (i) the Maturity Payment on ,
subject to acceleration to an Accelerated Maturity Date and adjustment to the
Accelerated Maturity Payment pursuant to the terms of the Indenture and (ii) the
Yield Enhancement Payments, if any, on each Payment Date.
Payment of (i) the Maturity Payment or Accelerated Maturity Payment,
as the case may be, and (ii) the Yield Enhancement Payments, if any, with
respect to this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth after the Trustee's certificate of authentication, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
A-1
<PAGE> 58
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SALOMON SMITH BARNEY HOLDINGS INC.
------------------------------------
By:
------------------------------------
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:
------------------------------------
Authorized Signatory
A-2
<PAGE> 59
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
This Security is one of a duly authorized issue of the Company
(herein called the "Securities"), issued and to be issued under an Indenture
dated as of , 1999 (herein called the "Indenture") between the Company
and The Chase Manhattan Bank (herein called the "Trustee," which term includes
any successor trustee under the Indenture), relating to a Forward Contract with
respect to Common Stock, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities are not subject to redemption at the option of the
Company or at the option of the Holder prior to maturity; however, if certain
Acceleration Events shall have occurred and be continuing, the maturity of the
Securities will be accelerated to the Accelerated Maturity Date pursuant to the
terms of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority of the Securities at the time Outstanding to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages of the Securities at the time Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by a Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay (i) the Maturity Payment or
Accelerated Maturity Payment, as the case may be, and (ii) the Yield Enhancement
Payments, if any, with respect to this Security at the time, place and rate, and
in the coin or currency, prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar and duly executed
by, the Holder hereof or the Holder's attorney duly authorized in writing, and
thereupon one or more new Securities will be issued to the designated transferee
or transferees.
A-3
<PAGE> 60
The Securities are issuable only in registered form. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for one or more new Securities of like tenor and
representing an equal aggregate beneficial interest in the Forward Contract to
be surrendered for exchange. If (a) any Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days or (b) the Company executes and delivers to the
Trustee a Company Order to the effect that the Global Securities shall be
exchangeable for certificated Securities, the Global Securities will be
exchangeable for Securities in definitive certificated form of like tenor. Such
definitive Securities shall be registered in such name or names as the
Depositary shall instruct the Trustee.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
---------------------
A-4
<PAGE> 61
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[Please Insert Social Security Number or Other Identifying Number of Assignee]
________________________________________________________________________________
[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE:]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The within Security of Salomon Smith Barney Holdings Inc. and does hereby
irrevocably constitute and appoint
________________________________________________________________________________
Attorney to transfer said Security on the books of said Company, with full power
of substitution in the premises.
Dated:______________________________ ________________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the first page of
the within Security in every
particular, without alteration or
enlargement or any change whatever,
and be guaranteed by the endorser's
bank or broker.
A-5
<PAGE> 1
EXHIBIT 4(q)
SALOMON SMITH BARNEY HOLDINGS INC.
to
THE CHASE MANHATTAN BANK,
Trustee
===========
FORM OF
FORWARD CONTRACT AND INDENTURE
WITH RESPECT TO
COMMON STOCK OF
===========
Dated as of , 1999
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101 Definitions....................................................1
SECTION 102 Compliance Certificates and Opinions...........................8
SECTION 103 Form of Documents Delivered to Trustee.........................9
SECTION 104 Acts of Holders...............................................10
SECTION 105 Notices, Etc., to Trustee and Company.........................10
SECTION 106 Notice to Holders; Waiver.....................................11
SECTION 107 Conflict with Trust Indenture Act.............................11
SECTION 108 Effect of Headings and Table of Contents......................11
SECTION 109 Successors and Assigns........................................11
SECTION 110 Separability Clause...........................................12
SECTION 111 Benefits of Indenture.........................................12
SECTION 112 Governing Law.................................................12
SECTION 113 Legal Holidays................................................12
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally...............................................12
SECTION 202 Definitive Securities.........................................13
SECTION 203 Form of Trustee's Certificate of Authentication...............13
SECTION 204 Securities in Global Form.....................................13
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued...........................................14
SECTION 302 Execution, Authentication, Delivery and Dating................14
SECTION 303 Global Securities; Temporary Securities.......................15
SECTION 304 Registration, Registration of Transfer and Exchange...........17
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities..............18
SECTION 306 Persons Deemed Owners.........................................19
SECTION 307 Cancellation..................................................19
SECTION 308 Yield Enhancement Payments....................................19
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.......................21
i
<PAGE> 3
SECTION 402 Maturity......................................................22
SECTION 403 Dilution Adjustments..........................................22
SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization
Event.........................................................26
SECTION 405 Adjustments of Exchange Rate..................................27
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events...........................................27
SECTION 502 Acceleration of Maturity......................................28
SECTION 503 Taxes.........................................................29
SECTION 504 Treatment of Forward Contract.................................29
SECTION 505 Notices.......................................................29
SECTION 506 Collection of Amounts Owed and Suits for Enforcement
by Trustee ...................................................29
SECTION 507 Trustee May Enforce Claims Without Possession of Securities...30
SECTION 508 Application of Money Collected................................30
SECTION 509 Limitation on Suits...........................................31
SECTION 510 Restoration of Rights and Remedies............................31
SECTION 511 Rights and Remedies Cumulative................................31
SECTION 512 Delay or Omission Not Waiver..................................32
SECTION 513 Control by Holders............................................32
SECTION 514 Waiver of Past Defaults.......................................32
SECTION 515 Waiver of Stay or Extension Laws..............................33
SECTION 516 Filing Proofs of Claim........................................33
SECTION 517 Unconditional Right of Holders to Receive Payments............34
SECTION 518 Restoration of Rights and Remedies............................34
SECTION 519 Undertaking for Costs.........................................34
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.....................................34
SECTION 602 Certain Duties and Responsibilities of Trustee................36
SECTION 603 Not Responsible for Recitals or Issuance of Securities........37
SECTION 604 May Hold Securities...........................................37
SECTION 605 Money Held in Trust...........................................37
SECTION 606 Compensation and Reimbursement................................37
SECTION 607 Corporate Trustee Required; Eligibility.......................38
SECTION 608 Resignation and Removal; Appointment of Successor.............38
SECTION 609 Acceptance of Appointment by Successor........................40
SECTION 610 Merger, Conversion, Consolidation or Succession to Business...41
SECTION 611 Disclosure of Names and Addresses of Holders..................41
SECTION 612 Reports by Trustee............................................41
ii
<PAGE> 4
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.................................41
SECTION 702 Successor Corporation Substituted.............................42
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures without Consent of Holders............42
SECTION 802 Supplemental Indentures with Consent of Holders...............43
SECTION 803 Execution of Supplemental Indentures..........................44
SECTION 804 Effect of Supplemental Indentures.............................44
SECTION 805 Conformity with Trust Indenture Act...........................44
SECTION 806 Reference in Securities to Supplemental Indentures............45
ARTICLE IX
COVENANTS
SECTION 901 Payment.......................................................45
SECTION 902 Maintenance of Office or Agency...............................45
SECTION 903 Money for Securities Payments to Be Held in Trust.............45
SECTION 904 Limitation on Liens...........................................47
SECTION 905 Waiver of Certain Covenants...................................47
SECTION 906 Officers' Certificate as to Default...........................47
SECTION 907 Payment of Expenses...........................................47
EXHIBIT A-1................................................................A-1
iii
<PAGE> 5
Salomon Smith Barney Holdings Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of
Trust Indenture
Act Section Indenture Section
ss. 310 (a)(1)............................................. 607
(a)(2)............................................. 607
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(a)(5)............................................. 607
(b)................................................ 608
(c)................................................ Not Applicable
ss. 311 (c)................................................ Not Applicable
ss. 312 (a)................................................ 611
(b)................................................ 611
(c)................................................ 611
ss. 313 (a)................................................ 612
(c)................................................ 612
ss. 314 (c)................................................ 102
(d)................................................ Not Applicable
(e)................................................ 102
ss. 315 (a)................................................ 601, 602(a)
(c)................................................ 602(b)
(d)................................................ 601, 602(c)
(e)................................................ 519
ss. 316 (a)(1)(A).......................................... 513
(a)(1)(B).......................................... 514
(a)(2)............................................. Not Applicable
(b)................................................ 517
ss. 317 (a)(1)............................................. 506
(a)(2)............................................. 516
(b)................................................ 903
ss. 318 (a)................................................ 107
- ----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of , 1999, between SALOMON SMITH BARNEY
HOLDINGS INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company") with principal executive offices
at 388 Greenwich Street, New York, New York 10013, and THE CHASE MANHATTAN BANK,
a New York banking corporation (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of certain securities (the "Securities")
representing interests in a forward contract relating to the Common Stock of
and having the terms set forth in this Indenture (the "Forward Contract"),
which will be purchased by TARGETS Trust III, a business trust established under
the laws of the State of Delaware (the "Trust"). This Indenture is subject to
the provisions of the Trust Indenture Act (as hereinafter defined) that are
required to be part of this Indenture and, to the extent applicable, shall be
governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States; and, except as otherwise herein or in any
indenture supplemental hereto expressly provided, the term "generally
accepted accounting principles" with
<PAGE> 7
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Accelerated Maturity Date" has the meaning specified in Section
502.
"Accelerated Maturity Payment" has the meaning specified in Section
502.
"Acceleration Event" has the meaning specified in Section 501.
"Act," when used with respect to any Holder, has the meaning
specified in Section 103.
"Affiliate" of any specified Person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" has the meaning specified in Section 204.
"Appreciation Cap" has the meaning specified in Section 402.
"Authorized Newspaper" means a newspaper of general circulation in
the place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required hereunder,
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Board of Directors" means either the Board of Directors of the
Company, or the Executive Committee or any other duly authorized committee of
that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part of the
Securities, issued to the Depositary of Securities in accordance with Section
303, and bearing the legend prescribed in Section 303.
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed;
provided that, when used
2
<PAGE> 8
with respect to any Place of Payment, "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to the Securities.
"Closing Price" of the Common Stock or any marketable security on
any date of determination means the daily closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security as
reported on the New York Stock Exchange ("NYSE") or which is quoted on a
national securities market on such date of determination or, if such security is
not traded on NYSE or quoted on a national securities market on any such date,
as reported in the composite transactions for the principal United States
securities exchange on which if such security is so listed, or if such security
is not so listed on a United States national or regional securities exchange,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock of the Designated Issuer.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board or a
Vice-Chairman, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Treasurer, the Deputy Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date of initial execution of this Indenture is 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" per share of Common Stock as of a particular
date means the average of the Closing Prices of a share of Common Stock on each
of the 10 Trading Days immediately prior to but not including that particular
date.
3
<PAGE> 9
"Defaulted Yield Enhancement Payments" has the meaning specified in
Section 308.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, including Book-Entry Securities, the
Person designated as Depositary by the Company until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person
"Depositary" shall be a collective reference to such Persons.
"Designated Issuer" means , a corporation, together with any
successor entity in a merger, consolidation or amalgamation.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 403 (a), (b), (c) or (d).
"Dollar" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"Excess Purchase Payment" has the meaning providing in Section
403(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" has the meaning provided in Section 402.
"Forward Contract" has the meaning specified in the first recital
of this Indenture.
"Global Security" has the meaning specified in Section 204.
"Holder" means, with respect to a Security, the person in whose name
such Security is registered in the Security Register.
"Indenture" means this instrument originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"majority" of the Outstanding Securities means, except as otherwise
provided by the Trust Indenture Act, Outstanding Securities representing an
aggregate of more than 50% of all outstanding interests in the Forward Contract.
"Marketable Securities" has the meaning specified in Section 404.
"Maturity," when used with respect to the Forward Contract, means
the date on which the Maturity Payment or Accelerated Maturity Payment becomes
due and payable as the case may be and as therein or herein provided, whether on
the Maturity Date or an Accelerated Maturity Date.
4
<PAGE> 10
"Maturity Date" means .
"Maturity Payment" has the meaning specified in Section 402.
"New York Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York are permitted or
required by any applicable law to close.
"Officers' Certificate" means a written certificate containing the
information specified in Section 102 signed by the Chairman or a Vice Chairman
of the Board, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Controller, the Treasurer, the Deputy Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
which certificate complies with the applicable requirements of Section 314(e) of
the Trust Indenture Act, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to any Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; and
(iii) Securities that have been paid pursuant to Sections 402
or 502 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holder of the requisite
amount or percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting for quorum purposes, and for the purpose of making the calculations
required by Section 316 of the Trust Indenture Act, any Securities owned by the
Company or any other obligor upon such Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Any Securities so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the
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Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor. In determining whether the
requisite percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, such percentage
refers to Outstanding Securities representing an aggregate interest in the
Forward Contract equaling at least such percentage.
"Paying Agent" means any Person authorized by the Company to pay
amounts owed on Securities on behalf of the Company.
"Payment Date" means , , and of each year, or, in the case of
Defaulted Yield Enhancement Payments, if any, the date established for payment
pursuant to Section 308.
"Permitted Dividend" has the meaning specified in Section 403(d).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities, means
the place or places where any amounts owed in respect of the Securities are
payable.
"Record Date" means, with respect to any Payment Date, either (i)
the day that is one Business Day prior to such Payment Date so long as the
Securities are in book-entry only form, or (ii) if the Securities are not in
book-entry only form, the day that is 15 days prior to such Payment Date.
"Reorganization Event" has the meaning specified in Section 404.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust officer, any
trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and, in any
case, that has direct responsibility for the administration of this Indenture
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means Salomon Smith Barney Inc. and any
Subsidiary which owns or may hereafter own, directly or indirectly, any of the
voting stock of, or succeeds to any substantial part of the business now
conducted by, Salomon Smith Barney Inc. For the purposes of this definition and
the definition of "Subsidiary", "voting stock" means stock having
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voting power for the election of directors, whether at all times or only for so
long as no senior class of stock has such voting power by reason of any
contingency.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 304.
"Special Record Date" means, for the payment of any Defaulted Yield
Enhancement Payments, if any, a date fixed by the Trustee pursuant to Section
308.
"Stated Amount" means $ .
"Subsidiary" means a corporation, a majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 403, means the average Closing Price
per share of the Common Stock for the Calculation Period of 10 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 403(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 10 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to the "Closing Price" definition. The
"ex-date" with respect to any dividend, distribution or issuance shall mean the
first date on which the shares of Common Stock trade regular way on their
principal market without the right to receive such dividend, distribution or
issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange,
securities market or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange, securities market or association or over-the-counter market that is
the primary market for the trading of such security.
"Transaction Value" has the meaning specified in Section 404.
"Trust" has the meaning specified in the first recital of this
Indenture.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 805.
"Trust Securities" has the meaning specified in Section 907.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Vice President," when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
"Yield Enhancement Payment" means % per annum of the Stated
Amount, accruing from , 1999, computed on the basis of a 360-day year
of twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month, together with, in the case of any
Defaulted Yield Enhancement Payment, interest thereon in accordance with Section
308.
SECTION 102 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of any such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 907) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
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(4) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
SECTION 103 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Any certificate or opinion delivered by the Company to the Trustee
may evidence a signature by facsimile; provided that the Company shall deliver
to the Trustee such certificate or opinion with an original signature within a
reasonable period of time.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders in person or by an agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of
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deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
SECTION 104 Acts of Holders.
(a) The ownership of Securities shall be proved by the
Security Register, and the Depositary, or its nominee, shall be deemed the owner
of the Global Securities, and owners of beneficial interests in a Global
Security will not be considered the owners of any Securities.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(c) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, by first-class mail, postage prepaid,
to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice to the Holders thereof shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, by first-class mail,
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Security Register, within the time prescribed for
the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of the
Trustee (which shall include, but not be limited to, hand-delivery or overnight
courier) shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
SECTION 107 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the
Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 110 Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112 Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 113 Legal Holidays.
In any case where any Maturity of any Security or any Payment Date
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities) payment at such Maturity
or Payment Date need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made at such Maturity or Payment Date, as the case
may be, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally.
The Securities shall be in substantially in the form of Exhibit A
hereto with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities are issued in global form as permitted by
Section 303, the form thereof also shall be established as provided in the
preceding sentence.
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SECTION 202 Definitive Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 203 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the form set forth below.
This is one of the Securities designated in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By:______________________________
Authorized Signatory
SECTION 204 Securities in Global Form.
Except as provided in Section 304 hereof, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of certificated Securities. If Securities are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
or specified number of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate number of Outstanding Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount or changes in the rights of Holders of
Outstanding Securities represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein.
This Section 204 shall apply only to Securities issued in global
form ("Global Securities") and deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 204, authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's written instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, a Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
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prevent the Company, the Trustee, or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security.
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued.
Securities evidencing an aggregate beneficial interest in the
Forward Contract of not more than 100% may be authenticated and delivered under
this Indenture. All Securities shall be substantially identical in form except
for the beneficial interest in the Forward Contract represented thereby.
SECTION 302 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by the
Chairman or a Vice Chairman of the Board, a Vice President, the Chief Financial
Officer or the Chief Accounting Officer, under its corporate seal reproduced
thereon attested by the signature of its Secretary or one of its Assistant
Secretaries or its Treasurer, the Deputy Treasurer or one of its Assistant
Treasurers. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.
The Trustee shall have the right to decline to authenticate and
deliver such Securities if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken or if the Trustee in good faith by
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
If all of the Securities are not to be originally issued at the same
time, then the documents required to be delivered pursuant to this Section 302
must be delivered only once, prior to the authentication and delivery of the
first Security; provided, however, that any
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subsequent request by the Company to the Trustee to authenticate Securities upon
original issuance shall constitute a representation and warranty by the Company
that, as of the date of such request, the statements made in any Opinion of
Counsel delivered pursuant to this Section 302 shall be true and correct as if
made on such date.
If Securities are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order, authenticate and deliver one or more Securities
in global form that (i) shall represent the number of the Outstanding Securities
to be represented by such Global Securities, (ii) shall be registered, if in
registered form, in the name of the Depositary for such Book-Entry Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Unless and until it
is exchanged in whole or in part for Securities in certificated form, this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary" or to such other
effect as the Depositary and the Trustee may agree.
Each Depositary designated for a Book-Entry Security in registered
form must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation. The Trustee shall have no responsibility to
determine if the Depositary is so registered. Each Depositary shall enter into
an agreement with the Trustee governing their respective duties and rights with
regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
The Trustee may appoint an authenticating agent (each, an
"Authentication Agent") to authenticate the Securities. Any Authenticating Agent
may authenticate Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by any
such Authenticating Agent.
SECTION 303 Global Securities; Temporary Securities.
(a) No definitive Security shall be issued in exchange for a
Global Security deposited with the Depositary pursuant to Section 302
representing any Securities unless such transfer complies with Section 304 of
this Indenture and (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Global Security or,
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in the case of a Depositary located in the United States, if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Issuer within 90 days of such
notice or (ii) the Company determines not to have the Securities represented by
a Global Security; provided, however, that the Company may not make such
determination during any period during which the Securities must be held in
global form as may be required by the Securities Act.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 303 shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate number of Securities.
Any portion of a Global Security transferred pursuant to this Section 303 shall
be executed, authenticated and delivered as specified in Section 304 and
registered in such names as the Depositary shall direct.
(c) Subject to the provisions of Section 303(b) above, the
registered holder of a Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a holder is entitled to take under this
Indenture or such Securities.
(d) In the event of the occurrence of any of the events
specified in paragraph (a) of this Section 303 the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which may be in global form, that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. The definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such definitive Securities. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of such temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 902,
without charge to the Holder in a Place of Payment. Upon surrender for
cancellation of any temporary Securities, the Company shall execute, and the
Trustee shall authenticate and deliver, in exchange therefor the same aggregate
number of definitive Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
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SECTION 304 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company maintained pursuant to Section 902 in a Place of
Payment being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency maintained pursuant to Section 902 in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities,
evidencing a like aggregate beneficial interest in the Forward Contract.
At the option of the Holder, Securities (except a Global Security
representing all or a portion of the Securities which may be exchanged in
accordance with Section 303 hereof) may be exchanged for other Securities
evidencing a like aggregate interest in the Forward Contract, upon surrender of
the Securities to be exchanged at such office or agency.
If at any time the Depositary for the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities or if at any time the Depositary for the Securities shall no longer
be eligible under Section 302, the Company shall appoint a successor Depositary
with respect to the Securities.
The Depositary may surrender a Global Security in exchange in whole
or in part for Securities in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge, to each
Person specified by such Depositary a new certificated Security or Securities of
like tenor, in aggregate number equal to and in exchange for such Person's
beneficial interest in the Global Security, and to such Depositary a new Global
Security of like tenor representing an aggregate number of securities equal to
the difference, if any, between the aggregate beneficial interest in the Forward
Contract represented by the surrendered Global Security and the aggregate
beneficial interest in the Forward Contract represented by the certificated
Securities delivered to Holders thereof.
Upon the exchange in full of a Global Security for Securities in
certificated form, such Global Security shall be canceled by the Trustee. Except
as provided in Section 303(a) and (b) hereof, Securities issued in exchange for
a Book-Entry Security pursuant to this Section shall be registered in such names
as the Depositary for such Book-Entry Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall make available such Securities to the Persons in whose names
such Securities are so registered.
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Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
obligation, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange. The
Trustee shall have no liability for any transfers or exchanges of the Securities
in accordance with the provisions of this Indenture being in compliance with the
Securities Act or any other applicable law.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Securities Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 303 or 806 not involving
any transfer.
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and evidencing a like aggregate beneficial
interest in the Forward Contract.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
a new Security evidencing a like aggregate beneficial interest in the Forward
Contract.
Upon the issuance of any new Security under this Section, the
Company or the Securities Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone,
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and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of any mutilated, destroyed, lost or stolen Securities.
SECTION 306 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment in respect of amounts owed on such
Security and for all other purposes whatsoever, whether or not such payments
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary; provided,
however, that the Depositary, or its nominee, shall be deemed the owner of any
Global Securities registered in its name, and owners of beneficial interests in
a Global Security will not be considered the owners of any Securities for
purposes of this Indenture.
SECTION 307 Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be destroyed by the
Trustee and a certificate evidencing such destruction shall be delivered to the
Company.
SECTION 308 Yield Enhancement Payments.
A pro rata portion (based on the beneficial interest in the Forward
Contract represented by each of the Securities) of the Yield Enhancement
Payment, if any, shall be remitted (a) by the Company to the Paying Agent prior
to 10:00 am on each Payment Date and (b) thereafter by the Paying Agent on each
Payment Date to the Persons in whose name such Securities are registered at the
close of business on the Record Date therefor. At least 5 Business Days prior to
the applicable Record Date, the Company shall notify the Trustee in writing of
the aggregate amount of the Yield Enhancement Payment, if any, to be paid on
each Payment Date.
In the event of acceleration of maturity of the Forward Contract to
an Accelerated Maturity Date occurring after any Record Date and on or prior to
the next succeeding Payment Date, Yield Enhancement Payments, if any, otherwise
payable on such Payment Date shall be payable on the Accelerated Maturity Date,
and such Yield Enhancement Payments (in the amounts determined as provided
above) shall be paid to the Persons in whose name
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the Securities are registered at the close of business on such Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of acceleration of maturity of the Forward Contract to an Accelerated
Maturity Date, Yield Enhancement Payments, if any, that would otherwise be
payable after the Accelerated Maturity Payment with respect to the Forward
Contract shall not be payable.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer making Yield Enhancement Payments
during the period until the Maturity Date or the Accelerated Maturity Date, as
the case may be. Yield Enhancement Payments, if any, which are payable, but are
deferred by the Company and not punctually paid or duly provided for, on any
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Record Date by virtue of having been such Holder, and such Yield Enhancement
Payments, together with, to the extent permitted by applicable law, interest
thereon at the rate of % compounded quarterly for each quarter until such
Yield Enhancement Payments are paid (herein called "Defaulted Yield Enhancement
Payments"), may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Yield Enhancement Payments, if any, to the Persons in whose names the
Securities are registered at the close of business on a Special Record
Date for the payment of such Defaulted Yield Enhancement Payments, if any,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing at least one Business Day prior to the Payment Date on
which Yield Enhancement Payments would otherwise be payable of the
aggregate amount of Defaulted Yield Enhancement Payments, if any, proposed
to be paid on the Securities and the date of the proposed payment.
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Yield Enhancement Payments, if any, which shall be (i) not
more than 15 Business Days and not less than 10 Business Days prior to the
date of the proposed payment or (ii) if the Company proposes to pay such
Defaulted Yield Enhancement Payments as part of the Maturity Payment, the
Record Date with respect to the Maturity Date. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Yield Enhancement Payments, if any, and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities at such Holder's address as it appears in the Security
Register, not less than 10 Business Days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Yield Enhancement
Payments, if any, and the Special Record Date therefor having been so
mailed, such Defaulted Yield Enhancement Payments, if any, shall be paid
to the Person in whose name the Securities are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2),
(2) The Company may make payment of any Defaulted Yield
Enhancement Payments, if any, in any other lawful manner not inconsistent
with the requirements of any stock exchange or national securities market
on which any securities issued by the Trust are listed, and upon such
notice as may be required by such exchange
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or market, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
At the option of the Company, Yield Enhancement Payments, if any,
shall be remitted by the Trustee (i) by mailing a check to the address of the
persons entitled thereto as such address shall appear in the Security Register
or (ii) by wire transfer to an account maintained by the persons entitled
thereto as specified in the applicable Security Register if such person (a)
shall have provided wire instructions to the Paying Agent at least five (5)
Business Days prior to the relevant Record Date and (b) holds an aggregate
Security representing the right to receive, at maturity, at least $5,000,000.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to Yield Enhancement
Payments, if any, accrued and unpaid, and to be accrued, which were carried by
such other Security.
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities (except as to any surviving rights of
registration of transfer or exchange of Securities and replacement of lost,
stolen or mutilated Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either
(A) all Securities theretofore authenticated and
delivered have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company
has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge all amounts owed in respect of such Securities not
theretofore delivered to the Trustee for cancellation.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of this
Section, the obligations of the Trustee under the last paragraph of Section 903,
shall survive.
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SECTION 402 Maturity.
Subject to earlier acceleration of maturity in accordance with
Article V hereof, on the Maturity Date the Company shall be obligated to pay to
the Holders, in respect of the Securities held by them, an amount in cash (the
"Maturity Payment") equal to a pro rata portion (based on the beneficial
interest in the Forward Contract represented by such Securities) of the sum of
(A) the product of (i) multiplied by (ii) the Current Market Price of the
Common Stock as of the date one New York Business Day prior to the Maturity Date
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Maturity Date.
The "Exchange Rate" shall be determined in accordance with the
following formula, subject to adjustment as a result of certain events as
provided in Sections 403, 404 and 405: (i) if the Current Market Price of the
Common Stock as of the Maturity Date or the Accelerated Maturity Date, as the
case may be, is less than or equal to $ (the "Appreciation Cap"), then the
Exchange Rate shall be , and (ii) if the Current Market Price of the Common
Stock as of the Maturity Date or the Accelerated Maturity Date, as the case may
be, is greater than the Appreciation Cap, then the Exchange Rate shall be a
fraction (rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th), of which the numerator
is the Appreciation Cap, and of which the denominator is the Current Market
Price of the Common Stock as of the Maturity Date or the Accelerated Maturity
Date, as the case may be.
SECTION 403 Dilution Adjustments.
The Exchange Rate and the Appreciation Cap shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends, Splits Reclassifications. Etc. If the
Designated Issuer shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect
to Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock
into a greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares; or
(iv) issue by reclassification of shares of its Common Stock
any shares of other common stock of the Designated Issuer;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Designated Issuer issued pursuant
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thereto), or the fraction thereof that a holder who held one share of Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Cap shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Designated Issuer
shall, after the date hereof, issue, or declare a record date in respect of an
issuance of, rights or warrants to all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Then-Current Market Price of the Common Stock (other than rights to purchase
Common Stock pursuant to a plan for the reinvestment of dividends or interest),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the time the adjustment
is effected by reason of the issuance of such rights or warrants, plus the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to the time the
adjustment is effected, plus the number of additional shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered for subscription or purchase pursuant to such rights or warrants
would purchase at the Then-Current Market Price of the Common Stock, which shall
be determined by multiplying the total number of shares so offered for
subscription or purchase by the exercise price of such rights or warrants and
dividing the product so obtained by such Then-Current Market Price. To the
extent that, after the expiration of such rights or warrants, the shares of
Common Stock offered thereby shall not have been delivered, the Exchange Rate
shall be further adjusted to equal the Exchange Rate which would have been in
effect had such adjustment for the issuance of such rights or warrants been made
upon the basis of delivery of only the number of shares of Common Stock actually
delivered. The Appreciation Cap shall also be adjusted in the manner described
in paragraph (e).
(c) Distributions of Other Assets. If the Designated Issuer
shall, after the date hereof, declare or pay a dividend or make a distribution
to all holders of Common Stock, in either case, of evidences of its indebtedness
or other non-cash assets (excluding any dividends or distributions referred to
in paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
the numerator of which shall be the Then-Current Market Price per share of the
Common Stock, and the denominator of which shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) as of the time the adjustment is
effected of the portion of the assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of Common Stock. The
Appreciation Cap shall also be adjusted in the manner described in subparagraph
(e). Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which this paragraph (c) would otherwise apply, the
denominator in the fraction referred to above formula is less than $1.00 (or is
a negative number), then the Company may, at its option, elect to have the
adjustment provided by this
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paragraph (c) not be made and in lieu of such adjustment, on the Maturity Date,
the Company shall deliver to the Holders of the Securities an additional amount
of cash equal to the fair market value of such indebtedness, assets, rights or
warrants (determined, as of the date such dividend or distribution is made, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination shall be final) so distributed or
issued.
(d) Cash Dividends; Excess Purchase Payments. If, after the
date hereof, the Designated Issuer declares a record date in respect of a
distribution of cash (other than any Permitted Dividends, any cash distributed
in consideration of fractional shares of Common Stock and any cash distributed
in a Reorganization Event), by dividend or otherwise, to all holders of Common
Stock, or makes an Excess Purchase Payment, then the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Common Stock on such record date,
and the denominator of which shall be such Then-Current Market Price less the
amount of such distribution applicable to one share of Common Stock which would
not be a Permitted Dividend (or in the case of an Excess Purchase Payment, less
the aggregate amount of such Excess Purchase Payment for which adjustment is
being made at such time divided by the number of shares of Common Stock
outstanding on such record date). For purposes of these adjustments, (A)
"Permitted Dividend" means any quarterly cash dividend in respect of Common
Stock, other than a quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the extent that the per
share amount of such dividend results in an annualized dividend yield on the
Common Stock in excess of 10.0% and (B) "Excess Purchase Payment" means the
excess, if any, of (x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) of all other consideration paid by
the Designated Issuer or any of its subsidiaries with respect to one share of
Common Stock acquired in a tender offer or exchange offer by the Designated
Issuer or any of its subsidiaries, over (y) the Then-Current Market Price of the
Common Stock. The Appreciation Cap shall also be adjusted in the manner
described in subparagraph (e). Notwithstanding the foregoing, in the event that,
with respect to any dividend or distribution to which this paragraph (d) would
otherwise apply, the denominator in the fraction referred to above formula is
less than $1.00 (or is a negative number), then the Company may, at its option,
elect to have the adjustment provided by this paragraph (d) not be made and in
lieu of such adjustment, on the Maturity Date, the Company shall deliver to the
Holders of the Securities an additional amount of cash equal to the amount of
cash plus the fair market value of such other consideration (determined, as of
the date such dividend or distribution is made, by a nationally recognized
independent investment banking firm retained for this purpose by the Company,
whose determination shall be final) so distributed (or applied to the
acquisition of the Common Stock in such a tender offer or exchange offer).
(e) Adjustments to Appreciation Cap and Closing Prices. (i) If
any adjustment is made to the Exchange Rate pursuant to paragraph (a), (b), (c)
or (d) this Section 403, an adjustment shall also be made to the Appreciation
Cap. The required adjustment shall be made by dividing the Appreciation Cap by
the relevant Dilution Adjustment.
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(ii) If, during any Calculation Period used in calculating the
Current Market Price, the Then-Current Market Price or the Transaction Value,
there shall occur any event requiring an adjustment to be effected pursuant to
this Section 403, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment
shall be effected:
(i) in the case of any dividend, distribution or issuance, at
the opening of business on the Business Day next following the record date
for determination of holders of Common Stock entitled to receive such
dividend, distribution or issuance or, if the announcement of any such
dividend, distribution, or issuance is after such record date, at the time
such dividend, distribution or issuance shall be announced by the
Designated Issuer;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Designated Issuer shall announce, at or prior to the time it commences the
relevant share repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment on the
date that the holders of the repurchased shares become entitled to payment
in respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
Section 403 shall subsequently be canceled by the Designated Issuer, or such
dividend, distribution, issuance or repurchase shall fail to receive requisite
approvals or shall fail to occur for any other reason, then, upon such
cancellation, failure of approval or failure to occur, the Exchange Rate shall
be further adjusted to the Exchange Rate which would then have been in effect
had adjustment for such event not been made. If a Reorganization Event shall
occur after the occurrence of one or more events requiring an adjustment
pursuant to this Section 403, the Dilution Adjustments previously applied to the
Exchange Rate in respect of such events shall not be rescinded but shall be
applied to the new Exchange Rate provided for under Sections 404 and 405.
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SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Designated
Issuer, or any surviving entity or subsequent surviving entity of the Designated
Issuer (a "Designated Issuer Successor"), with or into another entity (other
than a merger or consolidation in which the Designated Issuer is the continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property
of the Designated Issuer or another Person), (ii) any sale, transfer, lease or
conveyance to another Person of the property of the Designated Issuer or any
Designated Issuer Successor as an entirety or substantially as an entirety,
(iii) any statutory exchange of securities of the Designated Issuer or any
Designated Issuer Successor with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Designated Issuer or any Designated Issuer Successor (any such event described
in clause (i), (ii), (iii) or (iv), a "Reorganization Event"), the Exchange Rate
shall be adjusted so that, on the Maturity Date, the Holders of the Securities
shall receive cash in an amount equal to the product of the number of Trust
Securities held by such Holder multiplied by (i) if the Transaction Value is
less than or equal to the Appreciation Cap, times the Transaction Value, and
(ii) if the Transaction Value is greater than the Appreciation Cap, times the
Appreciation Cap.
"Transaction Value" means the sum of: (a) for any cash received in
any such Reorganization Event, the amount of cash received per share of Common
Stock; (b) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination shall
be final); and (c) for any Marketable Securities received in any such
Reorganization Event, an amount equal to the average Closing Price per share of
such Marketable Securities for the Calculation Period of 10 Trading Days
immediately prior to the date one New York Business Day prior to the Maturity
Date multiplied by the number of such Marketable Securities received for each
share of Common Stock; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days
such Trading Day shall be disregarded in the calculation of such average Closing
Price (but no additional trading days shall be added to the Calculation Period).
If no Closing Price for the Marketable Securities may be determined for all such
Trading Days, the calculation in the preceding clause (c) shall be based on the
most recently available Closing Price for the Marketable Securities prior to
such 10 Trading Days.
"Marketable Securities" means any perpetual equity securities or
debt securities with a stated maturity after the Maturity Date, in each case
that are listed on a U.S. national securities exchange or reported by the Nasdaq
National Market. The number of shares of any equity securities constituting
Marketable Securities included in the calculation of Transaction Value pursuant
to the preceding clause (c) shall be subject to adjustment if any event that
would, had it occurred with respect to the Common Stock or the Designated
Issuer, have required an adjustment pursuant to Section 403 shall occur with
respect to such Marketable Securities or the
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issuer thereof between the time of the Reorganization Event and the Maturity
Date. Adjustment for such subsequent events shall be as nearly equivalent as
practicable to the adjustments provided for in Section 403.
SECTION 405 Adjustments of Exchange Rate.
The Company shall be responsible for the effectuation and
calculation of any adjustment pursuant this Article IV and shall furnish the
Trustee with notice of any such adjustment. The Trustee shall be under no duty
or obligation to review or determine any calculations, adjustments, dividend
calculations, determination of either the Maturity Payment or Accelerated
Maturity Payment payable hereunder, exchange rate determinations or any other
calculation set forth in this Article IV or in Section 502 hereof.
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events.
"Acceleration Event," wherever used herein, means any one of the
following events:
(a) the entry of a decree or order for relief in respect of
the Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(b) the commencement by the Company of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action; or
(c) the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been (a) an amendment to, change in or announced proposed change
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying, or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of an official position) of the governmental
authority or regulatory body making
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such administrative pronouncement or taking such action, or (d) a threatened
challenge asserted in connection with an audit of the Company, any of its
subsidiaries or the Trust, or a threatened challenge asserted in writing against
any other taxpayer that has raised capital through the issuance of securities
that are substantially similar to the Securities or the TARGETS, which amendment
or change is adopted or which proposed change, decision or pronouncement is
announced or which action, clarification or challenge occurs on or after the
date of the Prospectus relating to the original issuance of the TARGETS
(collectively a "Tax Action"), which Tax Action relates to any of the items
described in (i) and (ii) below, and that there is more than an insubstantial
risk that (i) the Trust is, or will be subject to United States federal income
tax with respect to income accrued or received in respect of the Forward
Contract or the Treasury Securities, or (ii) the Trust is, or will be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges; or
(d) the receipt by the Company of an opinion of a nationally
recognized independent counsel experienced in such matters to the effect that as
a result of the occurrence on or after the date hereof of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
SECTION 502 Acceleration of Maturity.
(a) If an Acceleration Event described in Section 501 shall
occur and be continuing, then the Company shall give written notice thereof to
the Trustee, which notice shall include a statement as to the amount of the
Accelerated Maturity Payment. On the Accelerated Maturity Date the Forward
Contract shall be automatically accelerated and the Accelerated Maturity Amount
shall be immediately due and payable. Upon receipt by the Trustee of the
Accelerated Maturity Amount, the Trustee shall remit to the Holders, in respect
of the Securities held by them, an amount in cash (the "Accelerated Maturity
Payment") equal to a pro rata portion (based on the beneficial interest in the
Forward Contract represented by such Securities) of the sum of (A) the product
of (i) multiplied by (ii) the Current Market Price of the Common Stock as of
the date one New York Business Day prior to the Accelerated Maturity Date,
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Accelerated Maturity Date.
(b) As used herein, the "Accelerated Maturity Date" means the
date of the occurrence of the event or events constituting such Acceleration
Event.
(c) The Company agrees, and each Holder of Securities, by such
Holder's acceptance thereof, agrees that the Accelerated Maturity Amount is a
reasonable pre-estimate of loss to such Holder and is not a penalty. Such amount
is payable for the loss of bargain and a Holder will not be entitled to recover
additional damage as a consequence of loss resulting from any Acceleration
Event.
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SECTION 503 Taxes.
The Company shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Indenture and the performance of its obligations hereunder.
SECTION 504 Treatment of Forward Contract.
The Company hereby agrees that: (i) it will not treat this
Indenture, any portion of the Securities, or any obligation hereunder (except in
regards to any Yield Enhancement Payments (if any)) as giving rise to any
interest income or other inclusion of ordinary income on the part of the Holders
of the Securities; (ii) it will not treat the delivery of any portion of the
cash to be delivered pursuant to this Indenture (except in regards to any Yield
Enhancement Payments (if any)) as the payment of interest or ordinary income;
(iii) it will treat this Indenture in its entirety as a forward contract for the
delivery of such cash, under the terms of which contract (a) at the time of
issuance of the Securities the Holder deposits irrevocably with the Company a
fixed amount of cash equal to the purchase price of the Securities to assure
the fulfillment of the Holder's purchase obligation described in clause (c)
below, which deposit will unconditionally and irrevocably be applied at
Maturity to satisfy such obligation, (b) until Maturity the Company may be
obligated to pay Yield Enhancement Payments on such deposit as compensation to
the Holder for the Company's use of such cash deposit during the term of the
Securities, and (c) at Maturity such cash deposit unconditionally and
irrevocably will be applied by the Company in full satisfaction of the Holder's
obligation under the forward purchase contract, and the Company will deliver to
the Holder the amount of cash that the Holder is entitled to receive at that
time pursuant to the terms of the Securities; and (iv) it will not take any
action (including filing any tax return or form or taking any position in any
tax proceeding) that is inconsistent with the obligations contained in the
foregoing clauses (i) through (iii). Notwithstanding the preceding sentence, the
Company may take any action or position required by law, provided that the
Company delivers to the Trustee an opinion of counsel, nationally recognized as
expert in Federal tax matters, to the effect that such action or position is
required by a statutory change, Treasury regulation, or applicable court
decision published after the date of this Indenture.
SECTION 505 Notices.
The Company will or will cause to be delivered to the Trustee and to
each Holder:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder, or upon the Company's obtaining knowledge that any of the conditions
or events described in Section 501(a) or (b) shall have occurred with respect to
the Designated Issuer, notice of such occurrence; and
(b) In case at any time prior to the Maturity Date the Company
receives notice, or otherwise obtains knowledge, that any event requiring that
an adjustment be effected pursuant to Sections 403, 404 and 405 hereof shall
have occurred or be pending, then the Company shall promptly cause to be
delivered to the Trustee and each Holder a notice identifying such event and
stating, if known to the Company, the date on which such event is to occur and,
if applicable, the record date relating to such event. The Company shall cause
further notices to be delivered to the Trustee and each Holder if the Company
shall subsequently receive notice, or otherwise obtain knowledge, of any further
or revised information regarding the terms or timing of such event or any record
date relating thereto.
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by Trustee.
The Company covenants that if default is made in the payment of
amounts owed on any Security at Maturity, the Company will, upon demand of the
Trustee, pay to it, for the
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benefit of the Holders of such Securities the whole amount then due and payable
on such Securities and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and shall
at the direction of the Holders of a majority of the Outstanding Securities,
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, prosecute such proceeding to judgment or final decree,
and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, enforce the same against the Company or any other
obligor upon such Securities, and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or any
other obligor upon such Securities wherever situated.
If an Acceleration Event occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of the Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 507 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expense,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 508 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of the Securities, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
606; and
Second: To the payment of the amounts then due and unpaid on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities.
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Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 509 Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has (i) previously given written notice to the
Trustee of a continuing Acceleration Event with respect to the Forward
Contract and (ii) the Holders of not less than 25% of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Acceleration Event in its own name as
Trustee hereunder;
(2) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(3) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(4) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Securities; it being understood and intended
that no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other of such Holders,
or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of
Holders. For the protection and enforcement of the provisions of this
Section 509, each and every Holder of Securities and the Trustee shall be
entitled to such relief as can be given at law or in equity.
SECTION 510 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 511 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of a mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 305, no right or
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remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 512 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Acceleration Event
shall impair any such right or remedy or constitute a waiver of any such
Acceleration Event or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 513 Control by Holders.
The Holders of a majority of the Outstanding Securities shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed would
be unjustly prejudicial to the Holders of Securities not joining in any
such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 514 Waiver of Past Defaults.
The Holders of not less than a majority of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
default hereunder and its consequences, except a default in the payment of
amounts owed in respect of any Security, or in respect of a covenant or
provision hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Acceleration Event arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture,
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but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 515 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516 Filing Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, competition or
other judicial proceedings, or any voluntary or involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, relative to the
Company or any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the amount owed on such Securities shall then be due and payable as
therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of amounts due on the Securities) shall be entitled and
empowered, any intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amounts owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders of
such Securities allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606 of this Indenture.
Nothing herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt, on behalf of any Holder any plan or
reorganization, arrangement, adjustment
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or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in such
proceeding.
SECTION 517 Unconditional Right of Holders to Receive Payments.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the amounts owed on such Security and to institute suit for
the enforcement of any such payment and interest thereon, and such right shall
not be impaired without the consent of the Holder.
SECTION 518 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 519 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section 519 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% of the Outstanding Securities, or to any suit
instituted by any Holder of a Security for the enforcement of the payment of
amounts owed on such Security on or after the Maturity Date or Accelerated
Maturity Date.
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, certification, order, act or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may at any time (i) consult with counsel and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and (ii) seek instructions
concerning the administration of this Indenture from any court of competent
jurisdiction;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have provided to the Trustee reasonable security or indemnity against the
costs, expenses (including attorney's fees and expenses and the expenses of the
Trustee's agents, nominees and custodians) and liabilities which might be
incurred by it in compliance with such request or direction including such
reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(including, without limitations, any instruments or certificates delivered
pursuant to Section 304 hereof), but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it;
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(i) the granting of any right to the Trustee hereunder shall
not be deemed to impose on the Trustee an obligation to exercise such rights,
subject to Section 601(j); and
(j) the Trustee shall not be obligated to take any action or
to exercise any remedy hereunder unless directed to do so by the Holders of a
majority of the Securities then Outstanding and shall have no liability for its
failure to act pending receipt by it of any such direction.
This Section 601 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 602 Certain Duties and Responsibilities of Trustee.
(a) Except upon the occurrence of an Acceleration Event;
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Acceleration Event with respect to the
Securities, of which a Responsible Officer of the Trustee has actual knowledge,
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
Outstanding Securities determined as provided in Section 513,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect
to the Securities; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or indemnity, reasonably satisfactory to it, against such risk
or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 603 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 604 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee
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of an express trust as set forth in a separate fee letter between
the Trustee and the Company);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise of
performance of any of its powers or duties hereunder.
SECTION 607 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be
eligible to act as Trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
SECTION 608 Resignation and Removal; Appointment of Successor.
(a) The Trustee may resign at any time with respect to the
Securities upon giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 609 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.
(b) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of a majority of the Outstanding Securities,
delivered to the Trustee and to the Company.
(c) If at any time:
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(1) the Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(c) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities (it being understood that any such successor Trustee may be appointed
with respect to the Securities and that at any time there shall be only one
Trustee with respect to the Securities) and shall comply with the applicable
requirements of Section 609. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities shall be appointed by Act of the Holders of a majority
of the Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 609,
become the successor Trustee with respect to the Securities and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 609, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities and each appointment of a
successor Trustee with respect to the Securities in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities and the address of its Corporate Trust Office.
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SECTION 609 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under the Trust Indenture Act.
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SECTION 610 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 611 Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders of
Securities in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
SECTION 612 Reports by Trustee.
Within 60 days after April 15 of each year commencing with the first
May 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in Trust
Indenture Act Section 313(c) a brief report dated as of such April 15 if
required by Trust Indenture Act Section 313(a).
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the
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Trustee, in form satisfactory to the Trustee, the due and punctual
payment of amounts owed on all Securities and the performance of
every covenant of this Indenture on the part of the Company to be
performed or observed,
(2) immediately after giving effect to such transaction,
no Acceleration Event, and no event which, after notice or lapse of
time or both, would become an Acceleration Event, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 702 Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
701, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company; or
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(3) to add any additional Acceleration Events with
respect to the Forward Contract; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of the Securities in bearer form,
registrable or not registrable, or to provide for an uncertificated
(commonly known as "book-entry") Security on terms satisfactory in
substance to the Trustee; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Security which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 609(b); or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall
not adversely affect the interests of the Holders of Securities in
any material respect.
SECTION 802 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, however, that no
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Maturity of the Forward Contract, or
reduce the Maturity Payment payable on the Maturity Date, or reduce
the Accelerated Maturity Payment that would be due and payable on an
Accelerated Maturity Date pursuant to Section 502, or reduce the
Yield Enhancement Payments, if any, that would be due and payable
pursuant to Section 308, or change the coin or currency in which
amounts owed in respect of the Forward Contract are payable, or
impair the right to institute suit for the enforcement of any such
payment, on or after the Maturity thereof, or reduce the percentage
of the Outstanding Securities, the
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consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in
this Indenture, or
(2) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 902, or
(3) modify any of the provisions of this Section 802,
Section 515, or Section 905, except to increase any such percentage
in Section 905 to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of Sections 608(b)
and 801(7).
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 803 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel, the
preparation of which shall not be at the expense of the Trustee, stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 804 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 805 Conformity with Trust Indenture Act.
After this Indenture is qualified pursuant to the Trust Indenture
Act, every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 806 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
any new Securities so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE IX
COVENANTS
SECTION 901 Payment.
The Company covenants and agrees for the benefit of the Holders of
the Securities that it will duly and punctually pay all amounts owed on the
Securities in accordance with the terms of the Securities and this Indenture.
SECTION 902 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for the
Securities an office or agency where the Securities may be presented or
surrendered for payment, where the Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof; such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for the Securities for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 903 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any Securities, it will, on or before each due date of amounts owed
on such Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the amounts
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<PAGE> 51
owed so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it will, prior to each due date of amounts owed in
respect of the Securities, deposit with any such Paying Agent a sum sufficient
to pay the amounts owed in respect of the Securities so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent of the Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of amounts
owed in respect to the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of
any payment of amounts owed in respect to the Securities; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the amounts owed in respect to
any Security and remaining unclaimed for two years after such amount has become
due and payable shall be paid to the Company on Company Request along with any
interest that has accumulated thereon as a result of such money being invested
at the direction of the Company, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
amounts without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
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<PAGE> 52
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.
SECTION 904 Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
to, incur, issue, assume guarantee or suffer to exist any indebtedness for
borrowed money (indebtedness for borrowed money being hereinafter in this
section called "debt") if such debt is secured by a pledge of, lien on, or
security interest in any shares of stock of any Restricted Subsidiary, whether
such stock is now owned or shall hereafter be acquired, without effectively
providing that the Securities shall be secured equally and ratably with such
debt.
SECTION 905 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant, set forth herein, if before the time for such compliance, the Holders
of at least a majority of the Outstanding Securities shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant, but no such waiver shall extend to or affect such
covenant except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant shall remain in full force and effect.
SECTION 906 Officers' Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not
more than four months after the end of each fiscal year of the Company (which on
the date hereof is the calendar year) ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observation of any of the
terms, provisions and conditions of this Indenture, and, if the Company shall be
in default, specifying all such defaults and the nature thereof of which they
may have knowledge.
The Company will deliver written notice to the Trustee promptly
after any officer of the Company has knowledge of the occurrence of any event
that with the giving of notice or the lapse of time or both would become an
Acceleration Event under Section 501.
SECTION 907 Payment of Expenses.
(a) In connection with the offering, sale and issuance of the
Securities and in connection with the sale of any securities by the Trust
(collectively, the "Trust Securities"), the Company, in its capacity as issuer
with respect to the Securities, shall:
(i) pay all costs and expenses relating to the offering,
sale and issuance of the Trust Securities, including
commissions and
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compensation to the underwriters payable pursuant to any
applicable underwriting agreement and compensation of
the Trustee under this Indenture in accordance with the
provisions of Section 606;
(ii) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and
issuance of the Trust Securities of the Trust (including
commissions and compensation to the underwriters in
connection therewith), the fees and expenses of the
Institutional Trustee, the Regular Trustees and the
Delaware Trustee of the Trust, the costs and expenses
relating to the operation, maintenance and dissolution
of the Trust and the enforcement by the Institutional
Trustee of the rights of the holders of the Trust
Securities, including without limitation, costs and
expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of
assets of the Trust);
(iii) be primarily liable for any indemnification obligations
arising with respect to the Declaration of the Trust and
the Amended and Restated Declaration of the Trust; and
(iv) pay any and all taxes (other than United States
withholding taxes in respect of amounts paid on the
Securities held by the Trust) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
(b) Upon termination of this Indenture or the Securities or
the removal or resignation of the Trustee pursuant to Section 608, the Company
shall pay to the Trustee all amounts accrued and owing to the Trustee to the
date of such termination, removal or resignation. Upon termination of the
Amended and Restated Declaration of the Trust or the removal or resignation of
the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant
to Section 5.6 of the Amended and Restated Declaration of the Trust, the Company
shall pay to such Delaware Trustee or such Institutional Trustee, as the case
may be, all amounts accrued and owing to such Delaware Trustee or such
Institutional Trustee, as the case may be, to the date of such termination,
removal or resignation.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SALOMON SMITH BARNEY HOLDINGS INC.
By:_______________________________
Name:
Title:
[SEAL]
Attest:
_____________________________
THE CHASE MANHATTAN BANK,
Trustee
By:_______________________________
Name:
Title:
[SEAL]
Attest:
_____________________________
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<PAGE> 55
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this day of , before me personally appeared , to be
known, who, being by me duly sworn, did depose and say that he is a of
SALOMON SMITH BARNEY HOLDINGS INC., the corporation described in and which
executed the foregoing instrument; that he knows the seal of the said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the board of directors of said
corporation; and that he signed his name thereto by like authority.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
____________________________________
Notary Public
[Notarial Seal]
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<PAGE> 56
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , before me personally appeared , to me
known, who, being by me duly sworn, did depose and say that she is a of The
Chase Manhattan Bank, the New York banking corporation described in and which
executed the forgoing instrument; that she knows the seal of said New York
banking corporation; that the seal affixed to said instrument is such seal;
that it was so affixed by authority of the Board of Directors of said New York
banking corporation, and that she signed her name thereto by like authority.
____________________________________
Notary Public
[Notarial Seal]
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<PAGE> 57
EXHIBIT A
NO. 1
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
SALOMON SMITH BARNEY HOLDINGS INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person), for value received, hereby certifies that The
Chase Manhattan Bank, as Institutional Trustee of TARGETS Trust III, or
registered assigns, is the owner of a 100% interest in the Forward Contract (as
defined in the Indenture referred to below) and, as such, is entitled to receive
from the Company its pro rata share of (i) the Maturity Payment on , subject to
acceleration to an Accelerated Maturity Date and adjustment to the Accelerated
Maturity Payment pursuant to the terms of the Indenture and (ii) the Yield
Enhancement Payments, if any, on each Payment Date.
Payment of (i) the Maturity Payment or Accelerated Maturity Payment,
as the case may be, and (ii) the Yield Enhancement Payments, if any, with
respect to this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth after the Trustee's certificate of authentication, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
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<PAGE> 58
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SALOMON SMITH BARNEY HOLDINGS INC.
__________________________________________
By:
__________________________________________
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:_________________________________
Authorized Signatory
A-2
<PAGE> 59
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
This Security is one of a duly authorized issue of the Company
(herein called the "Securities"), issued and to be issued under an Indenture
dated as of , 1999 (herein called the "Indenture") between the Company
and The Chase Manhattan Bank (herein called the "Trustee," which term includes
any successor trustee under the Indenture), relating to a Forward Contract with
respect to Common Stock, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities are not subject to redemption at the option of the
Company or at the option of the Holder prior to maturity; however, if certain
Acceleration Events shall have occurred and be continuing, the maturity of the
Securities will be accelerated to the Accelerated Maturity Date pursuant to the
terms of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority of the Securities at the time Outstanding to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages of the Securities at the time Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by a Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay (i) the Maturity Payment or
Accelerated Maturity Payment, as the case may be, and (ii) the Yield Enhancement
Payments, if any, with respect to this Security at the time, place and rate, and
in the coin or currency, prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar and duly executed
by, the Holder hereof or the Holder's attorney duly authorized in writing, and
thereupon one or more new Securities will be issued to the designated transferee
or transferees.
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The Securities are issuable only in registered form. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for one or more new Securities of like tenor and
representing an equal aggregate beneficial interest in the Forward Contract to
be surrendered for exchange. If (a) any Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days or (b) the Company executes and delivers to the
Trustee a Company Order to the effect that the Global Securities shall be
exchangeable for certificated Securities, the Global Securities will be
exchangeable for Securities in definitive certificated form of like tenor. Such
definitive Securities shall be registered in such name or names as the
Depositary shall instruct the Trustee.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-4
<PAGE> 61
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[Please Insert Social Security Number or Other Identifying Number of Assignee]
________________________________________________________________________________
[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE:]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The within Security of Salomon Smith Barney Holdings Inc. and does hereby
irrevocably constitute and appoint
________________________________________________________________________________
Attorney to transfer said Security on the books of said Company, with full power
of substitution in the premises.
Dated:____________________________ ________________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the first page of
the within Security in every
particular, without alteration or
enlargement or any change whatever,
and be guaranteed by the endorser's
bank or broker.
A-5
<PAGE> 1
EXHIBIT 4(r)
SALOMON SMITH BARNEY HOLDINGS INC.
to
THE CHASE MANHATTAN BANK,
Trustee
===========
FORM OF
FORWARD CONTRACT AND INDENTURE
WITH RESPECT TO
COMMON STOCK OF
===========
Dated as of , 1999
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101 Definitions........................................................1
SECTION 102 Compliance Certificates and Opinions...............................8
SECTION 103 Form of Documents Delivered to Trustee.............................9
SECTION 104 Acts of Holders...................................................10
SECTION 105 Notices, Etc., to Trustee and Company.............................10
SECTION 106 Notice to Holders; Waiver.........................................11
SECTION 107 Conflict with Trust Indenture Act.................................11
SECTION 108 Effect of Headings and Table of Contents..........................11
SECTION 109 Successors and Assigns............................................11
SECTION 110 Separability Clause...............................................12
SECTION 111 Benefits of Indenture.............................................12
SECTION 112 Governing Law.....................................................12
SECTION 113 Legal Holidays....................................................12
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally...................................................12
SECTION 202 Definitive Securities.............................................13
SECTION 203 Form of Trustee's Certificate of Authentication...................13
SECTION 204 Securities in Global Form.........................................13
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued...............................................14
SECTION 302 Execution, Authentication, Delivery and Dating....................14
SECTION 303 Global Securities; Temporary Securities...........................15
SECTION 304 Registration, Registration of Transfer and Exchange...............17
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities..................18
SECTION 306 Persons Deemed Owners.............................................19
SECTION 307 Cancellation......................................................19
SECTION 308 Yield Enhancement Payments........................................19
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture...........................21
i
<PAGE> 3
SECTION 402 Maturity..........................................................22
SECTION 403 Dilution Adjustments..............................................22
SECTION 404 Adjustment for Consolidation, Merger or Other
Reorganization Event............................................26
SECTION 405 Adjustments of Exchange Rate......................................27
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events...............................................27
SECTION 502 Acceleration of Maturity..........................................28
SECTION 503 Taxes.............................................................29
SECTION 504 Treatment of Forward Contract.....................................29
SECTION 505 Notices...........................................................29
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by Trustee...29
SECTION 507 Trustee May Enforce Claims Without Possession of Securities.......30
SECTION 508 Application of Money Collected....................................30
SECTION 509 Limitation on Suits...............................................31
SECTION 510 Restoration of Rights and Remedies................................31
SECTION 511 Rights and Remedies Cumulative....................................31
SECTION 512 Delay or Omission Not Waiver......................................32
SECTION 513 Control by Holders................................................32
SECTION 514 Waiver of Past Defaults...........................................32
SECTION 515 Waiver of Stay or Extension Laws..................................33
SECTION 516 Filing Proofs of Claim............................................33
SECTION 517 Unconditional Right of Holders to Receive Payments................34
SECTION 518 Restoration of Rights and Remedies................................34
SECTION 519 Undertaking for Costs.............................................34
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.........................................34
SECTION 602 Certain Duties and Responsibilities of Trustee....................36
SECTION 603 Not Responsible for Recitals or Issuance of Securities............37
SECTION 604 May Hold Securities...............................................37
SECTION 605 Money Held in Trust...............................................37
SECTION 606 Compensation and Reimbursement....................................37
SECTION 607 Corporate Trustee Required; Eligibility...........................38
SECTION 608 Resignation and Removal; Appointment of Successor.................38
SECTION 609 Acceptance of Appointment by Successor............................40
SECTION 610 Merger, Conversion, Consolidation or Succession to Business.......41
SECTION 611 Disclosure of Names and Addresses of Holders......................41
SECTION 612 Reports by Trustee................................................41
ii
<PAGE> 4
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.....................................41
SECTION 702 Successor Corporation Substituted.................................42
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures without Consent of Holders................42
SECTION 802 Supplemental Indentures with Consent of Holders...................43
SECTION 803 Execution of Supplemental Indentures..............................44
SECTION 804 Effect of Supplemental Indentures.................................44
SECTION 805 Conformity with Trust Indenture Act...............................44
SECTION 806 Reference in Securities to Supplemental Indentures................45
ARTICLE IX
COVENANTS
SECTION 901 Payment...........................................................45
SECTION 902 Maintenance of Office or Agency...................................45
SECTION 903 Money for Securities Payments to Be Held in Trust.................45
SECTION 904 Limitation on Liens...............................................47
SECTION 905 Waiver of Certain Covenants.......................................47
SECTION 906 Officers' Certificate as to Default...............................47
SECTION 907 Payment of Expenses...............................................47
EXHIBIT A-1..................................................................A-1
iii
<PAGE> 5
Salomon Smith Barney Holdings Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of
Trust Indenture Indenture Section
Act Section
ss. 310 (a)(1).......................................... 607
(a)(2).......................................... 607
(a)(3).......................................... Not Applicable
(a)(4).......................................... Not Applicable
(a)(5).......................................... 607
(b)............................................. 608
(c)............................................. Not Applicable
ss. 311 (c)............................................. Not Applicable
ss. 312 (a)............................................. 611
(b)............................................. 611
(c)............................................. 611
ss. 313 (a)............................................. 612
(c)............................................. 612
ss. 314 (c)............................................. 102
(d)............................................. Not Applicable
(e)............................................. 102
ss. 315 (a)............................................. 601, 602(a)
(c)............................................. 602(b)
(d)............................................. 601, 602(c)
(e)............................................. 519
ss. 316 (a)(1)(A)....................................... 513
(a)(1)(B)....................................... 514
(a)(2).......................................... Not Applicable
(b)............................................. 517
ss. 317 (a)(1).......................................... 506
(a)(2).......................................... 516
(b)............................................. 903
ss. 318 (a)............................................. 107
- --------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of , 1999, between SALOMON SMITH BARNEY
HOLDINGS INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company") with principal executive offices
at 388 Greenwich Street, New York, New York 10013, and THE CHASE MANHATTAN BANK,
a New York banking corporation (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of certain securities (the "Securities")
representing interests in a forward contract relating to the Common Stock of
and having the terms set forth in this Indenture (the "Forward
Contract"), which will be purchased by TARGETS Trust IV, a business trust
established under the laws of the State of Delaware (the "Trust"). This
Indenture is subject to the provisions of the Trust Indenture Act (as
hereinafter defined) that are required to be part of this Indenture and, to the
extent applicable, shall be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States; and, except as otherwise herein or in any
indenture supplemental hereto expressly provided, the term "generally
accepted accounting principles" with
<PAGE> 7
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Accelerated Maturity Date" has the meaning specified in Section
502.
"Accelerated Maturity Payment" has the meaning specified in Section
502.
"Acceleration Event" has the meaning specified in Section 501.
"Act," when used with respect to any Holder, has the meaning
specified in Section 103.
"Affiliate" of any specified Person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" has the meaning specified in Section 204.
"Appreciation Cap" has the meaning specified in Section 402.
"Authorized Newspaper" means a newspaper of general circulation in
the place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required hereunder,
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Board of Directors" means either the Board of Directors of the
Company, or the Executive Committee or any other duly authorized committee of
that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part of the
Securities, issued to the Depositary of Securities in accordance with Section
303, and bearing the legend prescribed in Section 303.
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed;
provided that, when used
2
<PAGE> 8
with respect to any Place of Payment, "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to the Securities.
"Closing Price" of the Common Stock or any marketable security on
any date of determination means the daily closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security as
reported on the New York Stock Exchange ("NYSE") or which is quoted on a
national securities market on such date of determination or, if such security is
not traded on NYSE or quoted on a national securities market on any such date,
as reported in the composite transactions for the principal United States
securities exchange on which if such security is so listed, or if such security
is not so listed on a United States national or regional securities exchange,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock of the Designated Issuer.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board or a
Vice-Chairman, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Treasurer, the Deputy Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date of initial execution of this Indenture is 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" per share of Common Stock as of a particular
date means the average of the Closing Prices of a share of Common Stock on each
of the 10 Trading Days immediately prior to but not including that particular
date.
3
<PAGE> 9
"Defaulted Yield Enhancement Payments" has the meaning specified in
Section 308.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, including Book-Entry Securities, the
Person designated as Depositary by the Company until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person
"Depositary" shall be a collective reference to such Persons.
"Designated Issuer" means , a corporation, together with any
successor entity in a merger, consolidation or amalgamation.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 403 (a), (b), (c) or (d).
"Dollar" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"Excess Purchase Payment" has the meaning providing in Section
403(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" has the meaning provided in Section 402.
"Forward Contract" has the meaning specified in the first recital of
this Indenture.
"Global Security" has the meaning specified in Section 204.
"Holder" means, with respect to a Security, the person in whose name
such Security is registered in the Security Register.
"Indenture" means this instrument originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"majority" of the Outstanding Securities means, except as otherwise
provided by the Trust Indenture Act, Outstanding Securities representing an
aggregate of more than 50% of all outstanding interests in the Forward Contract.
"Marketable Securities" has the meaning specified in Section 404.
"Maturity," when used with respect to the Forward Contract, means
the date on which the Maturity Payment or Accelerated Maturity Payment becomes
due and payable as the case may be and as therein or herein provided, whether on
the Maturity Date or an Accelerated Maturity Date.
4
<PAGE> 10
"Maturity Date" means .
"Maturity Payment" has the meaning specified in Section 402.
"New York Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York are permitted or
required by any applicable law to close.
"Officers' Certificate" means a written certificate containing the
information specified in Section 102 signed by the Chairman or a Vice Chairman
of the Board, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Controller, the Treasurer, the Deputy Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
which certificate complies with the applicable requirements of Section 314(e) of
the Trust Indenture Act, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to any Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; and
(iii) Securities that have been paid pursuant to Sections 402
or 502 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holder of the requisite
amount or percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting for quorum purposes, and for the purpose of making the calculations
required by Section 316 of the Trust Indenture Act, any Securities owned by the
Company or any other obligor upon such Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Any Securities so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the
5
<PAGE> 11
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor. In determining whether the
requisite percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, such percentage
refers to Outstanding Securities representing an aggregate interest in the
Forward Contract equaling at least such percentage.
"Paying Agent" means any Person authorized by the Company to pay
amounts owed on Securities on behalf of the Company.
"Payment Date" means , , and of each year, or, in the case of
Defaulted Yield Enhancement Payments, if any, the date established for payment
pursuant to Section 308.
"Permitted Dividend" has the meaning specified in Section 403(d).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities, means
the place or places where any amounts owed in respect of the Securities are
payable.
"Record Date" means, with respect to any Payment Date, either (i)
the day that is one Business Day prior to such Payment Date so long as the
Securities are in book-entry only form, or (ii) if the Securities are not in
book-entry only form, the day that is 15 days prior to such Payment Date.
"Reorganization Event" has the meaning specified in Section 404.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust officer, any
trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and, in any
case, that has direct responsibility for the administration of this Indenture
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means Salomon Smith Barney Inc. and any
Subsidiary which owns or may hereafter own, directly or indirectly, any of the
voting stock of, or succeeds to any substantial part of the business now
conducted by, Salomon Smith Barney Inc. For the purposes of this definition and
the definition of "Subsidiary", "voting stock" means stock having
6
<PAGE> 12
voting power for the election of directors, whether at all times or only for so
long as no senior class of stock has such voting power by reason of any
contingency.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 304.
"Special Record Date" means, for the payment of any Defaulted Yield
Enhancement Payments, if any, a date fixed by the Trustee pursuant to Section
308.
"Stated Amount" means $ .
"Subsidiary" means a corporation, a majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 403, means the average Closing Price
per share of the Common Stock for the Calculation Period of 10 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 403(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 10 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to the "Closing Price" definition. The
"ex-date" with respect to any dividend, distribution or issuance shall mean the
first date on which the shares of Common Stock trade regular way on their
principal market without the right to receive such dividend, distribution or
issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange,
securities market or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange, securities market or association or over-the-counter market that is
the primary market for the trading of such security.
"Transaction Value" has the meaning specified in Section 404.
"Trust" has the meaning specified in the first recital of this
Indenture.
7
<PAGE> 13
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 805.
"Trust Securities" has the meaning specified in Section 907.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Vice President," when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
"Yield Enhancement Payment" means % per annum of the Stated
Amount, accruing from , 1999, computed on the basis of a 360-day year
of twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month, together with, in the case of any
Defaulted Yield Enhancement Payment, interest thereon in accordance with Section
308.
SECTION 102 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of any such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 907) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
8
<PAGE> 14
(4) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
SECTION 103 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Any certificate or opinion delivered by the Company to the Trustee
may evidence a signature by facsimile; provided that the Company shall deliver
to the Trustee such certificate or opinion with an original signature within a
reasonable period of time.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders in person or by an agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of
9
<PAGE> 15
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
SECTION 104 Acts of Holders.
(a) The ownership of Securities shall be proved by the
Security Register, and the Depositary, or its nominee, shall be deemed the owner
of the Global Securities, and owners of beneficial interests in a Global
Security will not be considered the owners of any Securities.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(c) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, by first-class mail, postage prepaid,
to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice to the Holders thereof shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, by first-class mail,
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Security Register, within the time prescribed for
the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of the
Trustee (which shall include, but not be limited to, hand-delivery or overnight
courier) shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
SECTION 107 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the
Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 110 Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112 Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 113 Legal Holidays.
In any case where any Maturity of any Security or any Payment Date
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities) payment at such Maturity
or Payment Date need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made at such Maturity or Payment Date, as the case
may be, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally.
The Securities shall be in substantially in the form of Exhibit A
hereto with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities are issued in global form as permitted by
Section 303, the form thereof also shall be established as provided in the
preceding sentence.
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SECTION 202 Definitive Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 203 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the form set forth below.
This is one of the Securities designated in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Signatory
SECTION 204 Securities in Global Form.
Except as provided in Section 304 hereof, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of certificated Securities. If Securities are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
or specified number of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate number of Outstanding Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount or changes in the rights of Holders of
Outstanding Securities represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein.
This Section 204 shall apply only to Securities issued in global
form ("Global Securities") and deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 204, authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's written instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, a Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
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prevent the Company, the Trustee, or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security.
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued.
Securities evidencing an aggregate beneficial interest in the
Forward Contract of not more than 100% may be authenticated and delivered under
this Indenture. All Securities shall be substantially identical in form except
for the beneficial interest in the Forward Contract represented thereby.
SECTION 302 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by the
Chairman or a Vice Chairman of the Board, a Vice President, the Chief Financial
Officer or the Chief Accounting Officer, under its corporate seal reproduced
thereon attested by the signature of its Secretary or one of its Assistant
Secretaries or its Treasurer, the Deputy Treasurer or one of its Assistant
Treasurers. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.
The Trustee shall have the right to decline to authenticate and
deliver such Securities if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken or if the Trustee in good faith by
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
If all of the Securities are not to be originally issued at the same
time, then the documents required to be delivered pursuant to this Section 302
must be delivered only once, prior to the authentication and delivery of the
first Security; provided, however, that any
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subsequent request by the Company to the Trustee to authenticate Securities upon
original issuance shall constitute a representation and warranty by the Company
that, as of the date of such request, the statements made in any Opinion of
Counsel delivered pursuant to this Section 302 shall be true and correct as if
made on such date.
If Securities are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order, authenticate and deliver one or more Securities
in global form that (i) shall represent the number of the Outstanding Securities
to be represented by such Global Securities, (ii) shall be registered, if in
registered form, in the name of the Depositary for such Book-Entry Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Unless and until it
is exchanged in whole or in part for Securities in certificated form, this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary" or to such other
effect as the Depositary and the Trustee may agree.
Each Depositary designated for a Book-Entry Security in registered
form must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation. The Trustee shall have no responsibility to
determine if the Depositary is so registered. Each Depositary shall enter into
an agreement with the Trustee governing their respective duties and rights with
regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
The Trustee may appoint an authenticating agent (each, an
"Authentication Agent") to authenticate the Securities. Any Authenticating Agent
may authenticate Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by any
such Authenticating Agent.
SECTION 303 Global Securities; Temporary Securities.
(a) No definitive Security shall be issued in exchange for a
Global Security deposited with the Depositary pursuant to Section 302
representing any Securities unless such transfer complies with Section 304 of
this Indenture and (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Global Security or,
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in the case of a Depositary located in the United States, if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Issuer within 90 days of such
notice or (ii) the Company determines not to have the Securities represented by
a Global Security; provided, however, that the Company may not make such
determination during any period during which the Securities must be held in
global form as may be required by the Securities Act.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 303 shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate number of Securities.
Any portion of a Global Security transferred pursuant to this Section 303 shall
be executed, authenticated and delivered as specified in Section 304 and
registered in such names as the Depositary shall direct.
(c) Subject to the provisions of Section 303(b) above, the
registered holder of a Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a holder is entitled to take under this
Indenture or such Securities.
(d) In the event of the occurrence of any of the events
specified in paragraph (a) of this Section 303 the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which may be in global form, that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. The definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such definitive Securities. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of such temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 902,
without charge to the Holder in a Place of Payment. Upon surrender for
cancellation of any temporary Securities, the Company shall execute, and the
Trustee shall authenticate and deliver, in exchange therefor the same aggregate
number of definitive Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
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SECTION 304 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company maintained pursuant to Section 902 in a Place of
Payment being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency maintained pursuant to Section 902 in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities,
evidencing a like aggregate beneficial interest in the Forward Contract.
At the option of the Holder, Securities (except a Global Security
representing all or a portion of the Securities which may be exchanged in
accordance with Section 303 hereof) may be exchanged for other Securities
evidencing a like aggregate interest in the Forward Contract, upon surrender of
the Securities to be exchanged at such office or agency.
If at any time the Depositary for the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities or if at any time the Depositary for the Securities shall no longer
be eligible under Section 302, the Company shall appoint a successor Depositary
with respect to the Securities.
The Depositary may surrender a Global Security in exchange in whole
or in part for Securities in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge, to each
Person specified by such Depositary a new certificated Security or Securities of
like tenor, in aggregate number equal to and in exchange for such Person's
beneficial interest in the Global Security, and to such Depositary a new Global
Security of like tenor representing an aggregate number of securities equal to
the difference, if any, between the aggregate beneficial interest in the Forward
Contract represented by the surrendered Global Security and the aggregate
beneficial interest in the Forward Contract represented by the certificated
Securities delivered to Holders thereof.
Upon the exchange in full of a Global Security for Securities in
certificated form, such Global Security shall be canceled by the Trustee. Except
as provided in Section 303(a) and (b) hereof, Securities issued in exchange for
a Book-Entry Security pursuant to this Section shall be registered in such names
as the Depositary for such Book-Entry Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall make available such Securities to the Persons in whose names
such Securities are so registered.
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Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
obligation, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange. The
Trustee shall have no liability for any transfers or exchanges of the Securities
in accordance with the provisions of this Indenture being in compliance with the
Securities Act or any other applicable law.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Securities Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 303 or 806 not involving
any transfer.
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and evidencing a like aggregate beneficial
interest in the Forward Contract.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
a new Security evidencing a like aggregate beneficial interest in the Forward
Contract.
Upon the issuance of any new Security under this Section, the
Company or the Securities Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone,
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and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of any mutilated, destroyed, lost or stolen Securities.
SECTION 306 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment in respect of amounts owed on such
Security and for all other purposes whatsoever, whether or not such payments
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary; provided,
however, that the Depositary, or its nominee, shall be deemed the owner of any
Global Securities registered in its name, and owners of beneficial interests in
a Global Security will not be considered the owners of any Securities for
purposes of this Indenture.
SECTION 307 Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be destroyed by the
Trustee and a certificate evidencing such destruction shall be delivered to the
Company.
SECTION 308 Yield Enhancement Payments.
A pro rata portion (based on the beneficial interest in the Forward
Contract represented by each of the Securities) of the Yield Enhancement
Payment, if any, shall be remitted (a) by the Company to the Paying Agent prior
to 10:00 am on each Payment Date and (b) thereafter by the Paying Agent on each
Payment Date to the Persons in whose name such Securities are registered at the
close of business on the Record Date therefor. At least 5 Business Days prior to
the applicable Record Date, the Company shall notify the Trustee in writing of
the aggregate amount of the Yield Enhancement Payment, if any, to be paid on
each Payment Date.
In the event of acceleration of maturity of the Forward Contract to
an Accelerated Maturity Date occurring after any Record Date and on or prior to
the next succeeding Payment Date, Yield Enhancement Payments, if any, otherwise
payable on such Payment Date shall be payable on the Accelerated Maturity Date,
and such Yield Enhancement Payments (in the amounts determined as provided
above) shall be paid to the Persons in whose name the
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Securities are registered at the close of business on such Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of acceleration of maturity of the Forward Contract to an Accelerated
Maturity Date, Yield Enhancement Payments, if any, that would otherwise be
payable after the Accelerated Maturity Payment with respect to the Forward
Contract shall not be payable.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer making Yield Enhancement Payments
during the period until the Maturity Date or the Accelerated Maturity Date, as
the case may be. Yield Enhancement Payments, if any, which are payable, but are
deferred by the Company and not punctually paid or duly provided for, on any
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Record Date by virtue of having been such Holder, and such Yield Enhancement
Payments, together with, to the extent permitted by applicable law, interest
thereon at the rate of % compounded quarterly for each quarter until such
Yield Enhancement Payments are paid (herein called "Defaulted Yield Enhancement
Payments"), may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Yield Enhancement Payments, if any, to the Persons in whose names the
Securities are registered at the close of business on a Special Record
Date for the payment of such Defaulted Yield Enhancement Payments, if any,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing at least one Business Day prior to the Payment Date on
which Yield Enhancement Payments would otherwise be payable of the
aggregate amount of Defaulted Yield Enhancement Payments, if any, proposed
to be paid on the Securities and the date of the proposed payment.
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Yield Enhancement Payments, if any, which shall be (i) not
more than 15 Business Days and not less than 10 Business Days prior to the
date of the proposed payment or (ii) if the Company proposes to pay such
Defaulted Yield Enhancement Payments as part of the Maturity Payment, the
Record Date with respect to the Maturity Date. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Yield Enhancement Payments, if any, and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities at such Holder's address as it appears in the Security
Register, not less than 10 Business Days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Yield Enhancement
Payments, if any, and the Special Record Date therefor having been so
mailed, such Defaulted Yield Enhancement Payments, if any, shall be paid
to the Person in whose name the Securities are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2),
(2) The Company may make payment of any Defaulted Yield
Enhancement Payments, if any, in any other lawful manner not inconsistent
with the requirements of any stock exchange or national securities market
on which any securities issued by the Trust are listed, and upon such
notice as may be required by such exchange
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or market, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
At the option of the Company, Yield Enhancement Payments, if any,
shall be remitted by the Trustee (i) by mailing a check to the address of the
persons entitled thereto as such address shall appear in the Security Register
or (ii) by wire transfer to an account maintained by the persons entitled
thereto as specified in the applicable Security Register if such person (a)
shall have provided wire instructions to the Paying Agent at least five (5)
Business Days prior to the relevant Record Date and (b) holds an aggregate
Security representing the right to receive, at maturity, at least $5,000,000.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to Yield Enhancement
Payments, if any, accrued and unpaid, and to be accrued, which were carried by
such other Security.
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities (except as to any surviving rights of
registration of transfer or exchange of Securities and replacement of lost,
stolen or mutilated Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either
(A) all Securities theretofore authenticated and
delivered have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company
has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge all amounts owed in respect of such Securities not
theretofore delivered to the Trustee for cancellation.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of this
Section, the obligations of the Trustee under the last paragraph of Section 903,
shall survive.
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SECTION 402 Maturity.
Subject to earlier acceleration of maturity in accordance with
Article V hereof, on the Maturity Date the Company shall be obligated to pay to
the Holders, in respect of the Securities held by them, an amount in cash (the
"Maturity Payment") equal to a pro rata portion (based on the beneficial
interest in the Forward Contract represented by such Securities) of the sum of
(A) the product of (i) multiplied by (ii) the Current Market Price of the
Common Stock as of the date one New York Business Day prior to the Maturity Date
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Maturity Date.
The "Exchange Rate" shall be determined in accordance with the
following formula, subject to adjustment as a result of certain events as
provided in Sections 403, 404 and 405: (i) if the Current Market Price of the
Common Stock as of the Maturity Date or the Accelerated Maturity Date, as the
case may be, is less than or equal to $ (the "Appreciation Cap"), then the
Exchange Rate shall be , and (ii) if the Current Market Price of the Common
Stock as of the Maturity Date or the Accelerated Maturity Date, as the case may
be, is greater than the Appreciation Cap, then the Exchange Rate shall be a
fraction (rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th), of which the numerator
is the Appreciation Cap, and of which the denominator is the Current Market
Price of the Common Stock as of the Maturity Date or the Accelerated Maturity
Date, as the case may be.
SECTION 403 Dilution Adjustments.
The Exchange Rate and the Appreciation Cap shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends, Splits Reclassifications. Etc. If the
Designated Issuer shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect
to Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock
into a greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares; or
(iv) issue by reclassification of shares of its Common Stock
any shares of other common stock of the Designated Issuer;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Designated Issuer issued pursuant
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thereto), or the fraction thereof that a holder who held one share of Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Cap shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Designated Issuer
shall, after the date hereof, issue, or declare a record date in respect of an
issuance of, rights or warrants to all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Then-Current Market Price of the Common Stock (other than rights to purchase
Common Stock pursuant to a plan for the reinvestment of dividends or interest),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the time the adjustment
is effected by reason of the issuance of such rights or warrants, plus the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to the time the
adjustment is effected, plus the number of additional shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered for subscription or purchase pursuant to such rights or warrants
would purchase at the Then-Current Market Price of the Common Stock, which shall
be determined by multiplying the total number of shares so offered for
subscription or purchase by the exercise price of such rights or warrants and
dividing the product so obtained by such Then-Current Market Price. To the
extent that, after the expiration of such rights or warrants, the shares of
Common Stock offered thereby shall not have been delivered, the Exchange Rate
shall be further adjusted to equal the Exchange Rate which would have been in
effect had such adjustment for the issuance of such rights or warrants been made
upon the basis of delivery of only the number of shares of Common Stock actually
delivered. The Appreciation Cap shall also be adjusted in the manner described
in paragraph (e).
(c) Distributions of Other Assets. If the Designated Issuer
shall, after the date hereof, declare or pay a dividend or make a distribution
to all holders of Common Stock, in either case, of evidences of its indebtedness
or other non-cash assets (excluding any dividends or distributions referred to
in paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
the numerator of which shall be the Then-Current Market Price per share of the
Common Stock, and the denominator of which shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) as of the time the adjustment is
effected of the portion of the assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of Common Stock. The
Appreciation Cap shall also be adjusted in the manner described in subparagraph
(e). Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which this paragraph (c) would otherwise apply, the
denominator in the fraction referred to above formula is less than $1.00 (or is
a negative number), then the Company may, at its option, elect to have the
adjustment provided by this
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paragraph (c) not be made and in lieu of such adjustment, on the Maturity Date,
the Company shall deliver to the Holders of the Securities an additional amount
of cash equal to the fair market value of such indebtedness, assets, rights or
warrants (determined, as of the date such dividend or distribution is made, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination shall be final) so distributed or
issued.
(d) Cash Dividends; Excess Purchase Payments. If, after the
date hereof, the Designated Issuer declares a record date in respect of a
distribution of cash (other than any Permitted Dividends, any cash distributed
in consideration of fractional shares of Common Stock and any cash distributed
in a Reorganization Event), by dividend or otherwise, to all holders of Common
Stock, or makes an Excess Purchase Payment, then the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Common Stock on such record date,
and the denominator of which shall be such Then-Current Market Price less the
amount of such distribution applicable to one share of Common Stock which would
not be a Permitted Dividend (or in the case of an Excess Purchase Payment, less
the aggregate amount of such Excess Purchase Payment for which adjustment is
being made at such time divided by the number of shares of Common Stock
outstanding on such record date). For purposes of these adjustments, (A)
"Permitted Dividend" means any quarterly cash dividend in respect of Common
Stock, other than a quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the extent that the per
share amount of such dividend results in an annualized dividend yield on the
Common Stock in excess of 10.0% and (B) "Excess Purchase Payment" means the
excess, if any, of (x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) of all other consideration paid by
the Designated Issuer or any of its subsidiaries with respect to one share of
Common Stock acquired in a tender offer or exchange offer by the Designated
Issuer or any of its subsidiaries, over (y) the Then-Current Market Price of the
Common Stock. The Appreciation Cap shall also be adjusted in the manner
described in subparagraph (e). Notwithstanding the foregoing, in the event that,
with respect to any dividend or distribution to which this paragraph (d) would
otherwise apply, the denominator in the fraction referred to above formula is
less than $1.00 (or is a negative number), then the Company may, at its option,
elect to have the adjustment provided by this paragraph (d) not be made and in
lieu of such adjustment, on the Maturity Date, the Company shall deliver to the
Holders of the Securities an additional amount of cash equal to the amount of
cash plus the fair market value of such other consideration (determined, as of
the date such dividend or distribution is made, by a nationally recognized
independent investment banking firm retained for this purpose by the Company,
whose determination shall be final) so distributed (or applied to the
acquisition of the Common Stock in such a tender offer or exchange offer).
(e) Adjustments to Appreciation Cap and Closing Prices. (i) If
any adjustment is made to the Exchange Rate pursuant to paragraph (a), (b), (c)
or (d) this Section 403, an adjustment shall also be made to the Appreciation
Cap. The required adjustment shall be made by dividing the Appreciation Cap by
the relevant Dilution Adjustment.
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(ii) If, during any Calculation Period used in calculating the
Current Market Price, the Then-Current Market Price or the Transaction Value,
there shall occur any event requiring an adjustment to be effected pursuant to
this Section 403, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution or issuance, at
the opening of business on the Business Day next following the record date
for determination of holders of Common Stock entitled to receive such
dividend, distribution or issuance or, if the announcement of any such
dividend, distribution, or issuance is after such record date, at the time
such dividend, distribution or issuance shall be announced by the
Designated Issuer;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Designated Issuer shall announce, at or prior to the time it commences the
relevant share repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment on the
date that the holders of the repurchased shares become entitled to payment
in respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
Section 403 shall subsequently be canceled by the Designated Issuer, or such
dividend, distribution, issuance or repurchase shall fail to receive requisite
approvals or shall fail to occur for any other reason, then, upon such
cancellation, failure of approval or failure to occur, the Exchange Rate shall
be further adjusted to the Exchange Rate which would then have been in effect
had adjustment for such event not been made. If a Reorganization Event shall
occur after the occurrence of one or more events requiring an adjustment
pursuant to this Section 403, the Dilution Adjustments previously applied to the
Exchange Rate in respect of such events shall not be rescinded but shall be
applied to the new Exchange Rate provided for under Sections 404 and 405.
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SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Designated
Issuer, or any surviving entity or subsequent surviving entity of the Designated
Issuer (a "Designated Issuer Successor"), with or into another entity (other
than a merger or consolidation in which the Designated Issuer is the continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property
of the Designated Issuer or another Person), (ii) any sale, transfer, lease or
conveyance to another Person of the property of the Designated Issuer or any
Designated Issuer Successor as an entirety or substantially as an entirety,
(iii) any statutory exchange of securities of the Designated Issuer or any
Designated Issuer Successor with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Designated Issuer or any Designated Issuer Successor (any such event described
in clause (i), (ii), (iii) or (iv), a "Reorganization Event"), the Exchange Rate
shall be adjusted so that, on the Maturity Date, the Holders of the Securities
shall receive cash in an amount equal to the product of the number of Trust
Securities held by such Holder multiplied by (i) if the Transaction Value is
less than or equal to the Appreciation Cap, times the Transaction Value, and
(ii) if the Transaction Value is greater than the Appreciation Cap, times the
Appreciation Cap.
"Transaction Value" means the sum of: (a) for any cash received in
any such Reorganization Event, the amount of cash received per share of Common
Stock; (b) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination shall
be final); and (c) for any Marketable Securities received in any such
Reorganization Event, an amount equal to the average Closing Price per share of
such Marketable Securities for the Calculation Period of 10 Trading Days
immediately prior to the date one New York Business Day prior to the Maturity
Date multiplied by the number of such Marketable Securities received for each
share of Common Stock; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days
such Trading Day shall be disregarded in the calculation of such average Closing
Price (but no additional trading days shall be added to the Calculation Period).
If no Closing Price for the Marketable Securities may be determined for all such
Trading Days, the calculation in the preceding clause (c) shall be based on the
most recently available Closing Price for the Marketable Securities prior to
such 10 Trading Days.
"Marketable Securities" means any perpetual equity securities or
debt securities with a stated maturity after the Maturity Date, in each case
that are listed on a U.S. national securities exchange or reported by the Nasdaq
National Market. The number of shares of any equity securities constituting
Marketable Securities included in the calculation of Transaction Value pursuant
to the preceding clause (c) shall be subject to adjustment if any event that
would, had it occurred with respect to the Common Stock or the Designated
Issuer, have required an adjustment pursuant to Section 403 shall occur with
respect to such Marketable Securities or the
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issuer thereof between the time of the Reorganization Event and the Maturity
Date. Adjustment for such subsequent events shall be as nearly equivalent as
practicable to the adjustments provided for in Section 403.
SECTION 405 Adjustments of Exchange Rate.
The Company shall be responsible for the effectuation and
calculation of any adjustment pursuant this Article IV and shall furnish the
Trustee with notice of any such adjustment. The Trustee shall be under no duty
or obligation to review or determine any calculations, adjustments, dividend
calculations, determination of either the Maturity Payment or Accelerated
Maturity Payment payable hereunder, exchange rate determinations or any other
calculation set forth in this Article IV or in Section 502 hereof.
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events.
"Acceleration Event," wherever used herein, means any one of the
following events:
(a) the entry of a decree or order for relief in respect of
the Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(b) the commencement by the Company of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action; or
(c) the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been (a) an amendment to, change in or announced proposed change
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying, or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of an official position) of the governmental
authority or regulatory body making
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such administrative pronouncement or taking such action, or (d) a threatened
challenge asserted in connection with an audit of the Company, any of its
subsidiaries or the Trust, or a threatened challenge asserted in writing against
any other taxpayer that has raised capital through the issuance of securities
that are substantially similar to the Securities or the TARGETS, which amendment
or change is adopted or which proposed change, decision or pronouncement is
announced or which action, clarification or challenge occurs on or after the
date of the Prospectus relating to the original issuance of the TARGETS
(collectively a "Tax Action"), which Tax Action relates to any of the items
described in (i) and (ii) below, and that there is more than an insubstantial
risk that (i) the Trust is, or will be subject to United States federal income
tax with respect to income accrued or received in respect of the Forward
Contract or the Treasury Securities, or (ii) the Trust is, or will be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges; or
(d) the receipt by the Company of an opinion of a nationally
recognized independent counsel experienced in such matters to the effect that as
a result of the occurrence on or after the date hereof of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
SECTION 502 Acceleration of Maturity.
(a) If an Acceleration Event described in Section 501 shall
occur and be continuing, then the Company shall give written notice thereof to
the Trustee, which notice shall include a statement as to the amount of the
Accelerated Maturity Payment. On the Accelerated Maturity Date the Forward
Contract shall be automatically accelerated and the Accelerated Maturity Amount
shall be immediately due and payable. Upon receipt by the Trustee of the
Accelerated Maturity Amount, the Trustee shall remit to the Holders, in respect
of the Securities held by them, an amount in cash (the "Accelerated Maturity
Payment") equal to a pro rata portion (based on the beneficial interest in the
Forward Contract represented by such Securities) of the sum of (A) the product
of (i) multiplied by (ii) the Current Market Price of the Common Stock as of
the date one New York Business Day prior to the Accelerated Maturity Date,
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Accelerated Maturity Date.
(b) As used herein, the "Accelerated Maturity Date" means the
date of the occurrence of the event or events constituting such Acceleration
Event.
(c) The Company agrees, and each Holder of Securities, by such
Holder's acceptance thereof, agrees that the Accelerated Maturity Amount is a
reasonable pre-estimate of loss to such Holder and is not a penalty. Such amount
is payable for the loss of bargain and a Holder will not be entitled to recover
additional damage as a consequence of loss resulting from any Acceleration
Event.
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SECTION 503 Taxes.
The Company shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Indenture and the performance of its obligations hereunder.
SECTION 504 Treatment of Forward Contract.
The Company hereby agrees that: (i) it will not treat this
Indenture, any portion of the Securities, or any obligation hereunder (except in
regards to any Yield Enhancement Payments (if any)) as giving rise to any
interest income or other inclusion of ordinary income on the part of the Holders
of the Securities; (ii) it will not treat the delivery of any portion of the
cash to be delivered pursuant to this Indenture (except in regards to any Yield
Enhancement Payments (if any)) as the payment of interest or ordinary income;
(iii) it will treat this Indenture in its entirety as a forward contract for the
delivery of such cash, under the terms of which contract (a) at the time of
issuance of the Securities the Holder deposits irrevocably with the Company a
fixed amount of cash equal to the purchase price of the Securities to assure the
fulfillment of the Holder's purchase obligation described in clause (c) below,
which deposit will unconditionally and irrevocably be applied at Maturity to
satisfy such obligation, (b) until Maturity the Company may be obligated to pay
Yield Enhancement Payments on such deposit as compensation to the Holder for the
Company's use of such cash deposit during the term of the Securities, and (c) at
Maturity such cash deposit unconditionally and irrevocably will be applied by
the Company in full satisfaction of the Holder's obligation under the forward
purchase contract, and the Company will deliver to the Holder the amount of cash
that the Holder is entitled to receive at that time pursuant to the terms of the
Securities; and (iv) it will not take any action (including filing any tax
return or form or taking any position in any tax proceeding) that is
inconsistent with the obligations contained in the foregoing clauses (i) through
(iii). Notwithstanding the preceding sentence, the Company may take any action
or position required by law, provided that the Company delivers to the Trustee
an opinion of counsel, nationally recognized as expert in Federal tax matters,
to the effect that such action or position is required by a statutory change,
Treasury regulation, or applicable court decision published after the date of
this Indenture.
SECTION 505 Notices.
The Company will or will cause to be delivered to the Trustee and to
each Holder:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder, or upon the Company's obtaining knowledge that any of the conditions
or events described in Section 501(a) or (b) shall have occurred with respect to
the Designated Issuer, notice of such occurrence; and
(b) In case at any time prior to the Maturity Date the Company
receives notice, or otherwise obtains knowledge, that any event requiring that
an adjustment be effected pursuant to Sections 403, 404 and 405 hereof shall
have occurred or be pending, then the Company shall promptly cause to be
delivered to the Trustee and each Holder a notice identifying such event and
stating, if known to the Company, the date on which such event is to occur and,
if applicable, the record date relating to such event. The Company shall cause
further notices to be delivered to the Trustee and each Holder if the Company
shall subsequently receive notice, or otherwise obtain knowledge, of any further
or revised information regarding the terms or timing of such event or any record
date relating thereto.
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by Trustee.
The Company covenants that if default is made in the payment of
amounts owed on any Security at Maturity, the Company will, upon demand of the
Trustee, pay to it, for the
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benefit of the Holders of such Securities the whole amount then due and payable
on such Securities and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and shall
at the direction of the Holders of a majority of the Outstanding Securities,
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, prosecute such proceeding to judgment or final decree,
and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, enforce the same against the Company or any other
obligor upon such Securities, and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or any
other obligor upon such Securities wherever situated.
If an Acceleration Event occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of the Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 507 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expense,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 508 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of the Securities, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
606; and
Second: To the payment of the amounts then due and unpaid on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities.
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Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 509 Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has (i) previously given written notice to the
Trustee of a continuing Acceleration Event with respect to the Forward
Contract and (ii) the Holders of not less than 25% of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Acceleration Event in its own name as
Trustee hereunder;
(2) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(3) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(4) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Securities; it being understood and intended
that no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other of such Holders,
or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of
Holders. For the protection and enforcement of the provisions of this
Section 509, each and every Holder of Securities and the Trustee shall be
entitled to such relief as can be given at law or in equity.
SECTION 510 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 511 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of a mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 305, no right or
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remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 512 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Acceleration Event
shall impair any such right or remedy or constitute a waiver of any such
Acceleration Event or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 513 Control by Holders.
The Holders of a majority of the Outstanding Securities shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed would
be unjustly prejudicial to the Holders of Securities not joining in any
such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 514 Waiver of Past Defaults.
The Holders of not less than a majority of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
default hereunder and its consequences, except a default in the payment of
amounts owed in respect of any Security, or in respect of a covenant or
provision hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Acceleration Event arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture,
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but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 515 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516 Filing Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, competition or
other judicial proceedings, or any voluntary or involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, relative to the
Company or any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the amount owed on such Securities shall then be due and payable as
therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of amounts due on the Securities) shall be entitled and
empowered, any intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amounts owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders of
such Securities allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606 of this Indenture.
Nothing herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt, on behalf of any Holder any plan or
reorganization, arrangement, adjustment
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or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in such
proceeding.
SECTION 517 Unconditional Right of Holders to Receive Payments.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the amounts owed on such Security and to institute suit for
the enforcement of any such payment and interest thereon, and such right shall
not be impaired without the consent of the Holder.
SECTION 518 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 519 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section 519 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% of the Outstanding Securities, or to any suit
instituted by any Holder of a Security for the enforcement of the payment of
amounts owed on such Security on or after the Maturity Date or Accelerated
Maturity Date.
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, certification, order, act or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may at any time (i) consult with counsel and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and (ii) seek instructions
concerning the administration of this Indenture from any court of competent
jurisdiction;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have provided to the Trustee reasonable security or indemnity against the
costs, expenses (including attorney's fees and expenses and the expenses of the
Trustee's agents, nominees and custodians) and liabilities which might be
incurred by it in compliance with such request or direction including such
reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(including, without limitations, any instruments or certificates delivered
pursuant to Section 304 hereof), but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it;
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(i) the granting of any right to the Trustee hereunder shall
not be deemed to impose on the Trustee an obligation to exercise such rights,
subject to Section 601(j); and
(j) the Trustee shall not be obligated to take any action or
to exercise any remedy hereunder unless directed to do so by the Holders of a
majority of the Securities then Outstanding and shall have no liability for its
failure to act pending receipt by it of any such direction.
This Section 601 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 602 Certain Duties and Responsibilities of Trustee.
(a) Except upon the occurrence of an Acceleration Event;
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Acceleration Event with respect to the
Securities, of which a Responsible Officer of the Trustee has actual knowledge,
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
Outstanding Securities determined as provided in Section 513,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect
to the Securities; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or indemnity, reasonably satisfactory to it, against such risk
or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 603 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 604 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee
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of an express trust as set forth in a separate fee letter between
the Trustee and the Company);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise of
performance of any of its powers or duties hereunder.
SECTION 607 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be
eligible to act as Trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
SECTION 608 Resignation and Removal; Appointment of Successor.
(a) The Trustee may resign at any time with respect to the
Securities upon giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 609 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.
(b) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of a majority of the Outstanding Securities,
delivered to the Trustee and to the Company.
(c) If at any time:
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(1) the Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(c) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities (it being understood that any such successor Trustee may be appointed
with respect to the Securities and that at any time there shall be only one
Trustee with respect to the Securities) and shall comply with the applicable
requirements of Section 609. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities shall be appointed by Act of the Holders of a majority
of the Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 609,
become the successor Trustee with respect to the Securities and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 609, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities and each appointment of a
successor Trustee with respect to the Securities in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities and the address of its Corporate Trust Office.
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SECTION 609 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under the Trust Indenture Act.
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SECTION 610 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 611 Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders of
Securities in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
SECTION 612 Reports by Trustee.
Within 60 days after April 15 of each year commencing with the first
May 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in Trust
Indenture Act Section 313(c) a brief report dated as of such April 15 if
required by Trust Indenture Act Section 313(a).
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the
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Trustee, in form satisfactory to the Trustee, the due and punctual
payment of amounts owed on all Securities and the performance of
every covenant of this Indenture on the part of the Company to be
performed or observed,
(2) immediately after giving effect to such transaction,
no Acceleration Event, and no event which, after notice or lapse of
time or both, would become an Acceleration Event, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 702 Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
701, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company; or
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(3) to add any additional Acceleration Events with
respect to the Forward Contract; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of the Securities in bearer form,
registrable or not registrable, or to provide for an uncertificated
(commonly known as "book-entry") Security on terms satisfactory in
substance to the Trustee; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Security which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 609(b); or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall
not adversely affect the interests of the Holders of Securities in
any material respect.
SECTION 802 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, however, that no
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Maturity of the Forward Contract, or
reduce the Maturity Payment payable on the Maturity Date, or reduce
the Accelerated Maturity Payment that would be due and payable on an
Accelerated Maturity Date pursuant to Section 502, or reduce the
Yield Enhancement Payments, if any, that would be due and payable
pursuant to Section 308, or change the coin or currency in which
amounts owed in respect of the Forward Contract are payable, or
impair the right to institute suit for the enforcement of any such
payment, on or after the Maturity thereof, or reduce the percentage
of the Outstanding Securities, the
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consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in
this Indenture, or
(2) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 902, or
(3) modify any of the provisions of this Section 802,
Section 515, or Section 905, except to increase any such percentage
in Section 905 to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of Sections 608(b)
and 801(7).
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 803 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel, the
preparation of which shall not be at the expense of the Trustee, stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 804 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 805 Conformity with Trust Indenture Act.
After this Indenture is qualified pursuant to the Trust Indenture
Act, every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 806 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
any new Securities so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE IX
COVENANTS
SECTION 901 Payment.
The Company covenants and agrees for the benefit of the Holders of
the Securities that it will duly and punctually pay all amounts owed on the
Securities in accordance with the terms of the Securities and this Indenture.
SECTION 902 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for the
Securities an office or agency where the Securities may be presented or
surrendered for payment, where the Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof; such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for the Securities for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 903 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any Securities, it will, on or before each due date of amounts owed
on such Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the amounts
45
<PAGE> 51
owed so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it will, prior to each due date of amounts owed in
respect of the Securities, deposit with any such Paying Agent a sum sufficient
to pay the amounts owed in respect of the Securities so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent of the Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of amounts
owed in respect to the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of
any payment of amounts owed in respect to the Securities; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the amounts owed in respect to
any Security and remaining unclaimed for two years after such amount has become
due and payable shall be paid to the Company on Company Request along with any
interest that has accumulated thereon as a result of such money being invested
at the direction of the Company, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
amounts without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
46
<PAGE> 52
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.
SECTION 904 Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
to, incur, issue, assume guarantee or suffer to exist any indebtedness for
borrowed money (indebtedness for borrowed money being hereinafter in this
section called "debt") if such debt is secured by a pledge of, lien on, or
security interest in any shares of stock of any Restricted Subsidiary, whether
such stock is now owned or shall hereafter be acquired, without effectively
providing that the Securities shall be secured equally and ratably with such
debt.
SECTION 905 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant, set forth herein, if before the time for such compliance, the Holders
of at least a majority of the Outstanding Securities shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant, but no such waiver shall extend to or affect such
covenant except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant shall remain in full force and effect.
SECTION 906 Officers' Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not
more than four months after the end of each fiscal year of the Company (which on
the date hereof is the calendar year) ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observation of any of the
terms, provisions and conditions of this Indenture, and, if the Company shall be
in default, specifying all such defaults and the nature thereof of which they
may have knowledge.
The Company will deliver written notice to the Trustee promptly
after any officer of the Company has knowledge of the occurrence of any event
that with the giving of notice or the lapse of time or both would become an
Acceleration Event under Section 501.
SECTION 907 Payment of Expenses.
(a) In connection with the offering, sale and issuance of the
Securities and in connection with the sale of any securities by the Trust
(collectively, the "Trust Securities"), the Company, in its capacity as issuer
with respect to the Securities, shall:
(i) pay all costs and expenses relating to the offering,
sale and issuance of the Trust Securities, including
commissions and
47
<PAGE> 53
compensation to the underwriters payable pursuant to any
applicable underwriting agreement and compensation of
the Trustee under this Indenture in accordance with the
provisions of Section 606;
(ii) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and
issuance of the Trust Securities of the Trust (including
commissions and compensation to the underwriters in
connection therewith), the fees and expenses of the
Institutional Trustee, the Regular Trustees and the
Delaware Trustee of the Trust, the costs and expenses
relating to the operation, maintenance and dissolution
of the Trust and the enforcement by the Institutional
Trustee of the rights of the holders of the Trust
Securities, including without limitation, costs and
expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of
assets of the Trust);
(iii) be primarily liable for any indemnification obligations
arising with respect to the Declaration of the Trust and
the Amended and Restated Declaration of the Trust; and
(iv) pay any and all taxes (other than United States
withholding taxes in respect of amounts paid on the
Securities held by the Trust) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
(b) Upon termination of this Indenture or the Securities or
the removal or resignation of the Trustee pursuant to Section 608, the Company
shall pay to the Trustee all amounts accrued and owing to the Trustee to the
date of such termination, removal or resignation. Upon termination of the
Amended and Restated Declaration of the Trust or the removal or resignation of
the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant
to Section 5.6 of the Amended and Restated Declaration of the Trust, the Company
shall pay to such Delaware Trustee or such Institutional Trustee, as the case
may be, all amounts accrued and owing to such Delaware Trustee or such
Institutional Trustee, as the case may be, to the date of such termination,
removal or resignation.
48
<PAGE> 54
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SALOMON SMITH BARNEY HOLDINGS
INC.
By:
------------------------------
Name:
Title:
[SEAL]
Attest:
- ------------------------------
THE CHASE MANHATTAN BANK, Trustee
By:
------------------------------
Name:
Title:
[SEAL]
Attest:
- ------------------------------
49
<PAGE> 55
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this day of , before me personally appeared , to
be known, who, being by me duly sworn, did depose and say that he is a of
SALOMON SMITH BARNEY HOLDINGS INC., the corporation described in and which
executed the foregoing instrument; that he knows the seal of the said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the board of directors of said
corporation; and that he signed his name thereto by like authority.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
------------------------------
Notary Public
[Notarial Seal]
50
<PAGE> 56
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , before me personally appeared , to me
known, who, being by me duly sworn, did depose and say that she is a of
The Chase Manhattan Bank, the New York banking corporation described in and
which executed the forgoing instrument; that she knows the seal of said New York
banking corporation; that the seal affixed to said instrument is such seal; that
it was so affixed by authority of the Board of Directors of said New York
banking corporation, and that she signed her name thereto by like authority.
------------------------------
Notary Public
[Notarial Seal]
51
<PAGE> 57
EXHIBIT A
NO. 1
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
SALOMON SMITH BARNEY HOLDINGS INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person), for value received, hereby certifies that The
Chase Manhattan Bank, as Institutional Trustee of TARGETS Trust IV, or
registered assigns, is the owner of a 100% interest in the Forward Contract (as
defined in the Indenture referred to below) and, as such, is entitled to receive
from the Company its pro rata share of (i) the Maturity Payment on , subject to
acceleration to an Accelerated Maturity Date and adjustment to the Accelerated
Maturity Payment pursuant to the terms of the Indenture and (ii) the Yield
Enhancement Payments, if any, on each Payment Date.
Payment of (i) the Maturity Payment or Accelerated Maturity Payment,
as the case may be, and (ii) the Yield Enhancement Payments, if any, with
respect to this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth after the Trustee's certificate of authentication, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
A-1
<PAGE> 58
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SALOMON SMITH BARNEY HOLDINGS INC.
---------------------------------
By:
---------------------------------
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:
------------------------------
Authorized Signatory
A-2
<PAGE> 59
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
This Security is one of a duly authorized issue of the Company
(herein called the "Securities"), issued and to be issued under an Indenture
dated as of , 1999 (herein called the "Indenture") between the Company
and The Chase Manhattan Bank (herein called the "Trustee," which term includes
any successor trustee under the Indenture), relating to a Forward Contract with
respect to Common Stock, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities are not subject to redemption at the option of the
Company or at the option of the Holder prior to maturity; however, if certain
Acceleration Events shall have occurred and be continuing, the maturity of the
Securities will be accelerated to the Accelerated Maturity Date pursuant to the
terms of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority of the Securities at the time Outstanding to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages of the Securities at the time Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by a Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay (i) the Maturity Payment or
Accelerated Maturity Payment, as the case may be, and (ii) the Yield Enhancement
Payments, if any, with respect to this Security at the time, place and rate, and
in the coin or currency, prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar and duly executed
by, the Holder hereof or the Holder's attorney duly authorized in writing, and
thereupon one or more new Securities will be issued to the designated transferee
or transferees.
A-3
<PAGE> 60
The Securities are issuable only in registered form. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for one or more new Securities of like tenor and
representing an equal aggregate beneficial interest in the Forward Contract to
be surrendered for exchange. If (a) any Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days or (b) the Company executes and delivers to the
Trustee a Company Order to the effect that the Global Securities shall be
exchangeable for certificated Securities, the Global Securities will be
exchangeable for Securities in definitive certificated form of like tenor. Such
definitive Securities shall be registered in such name or names as the
Depositary shall instruct the Trustee.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
------------------------
A-4
<PAGE> 61
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[Please Insert Social Security Number or Other Identifying Number of Assignee]
- --------------------------------------------------------------------------------
[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE:]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The within Security of Salomon Smith Barney Holdings Inc. and does hereby
irrevocably constitute and appoint
- --------------------------------------------------------------------------------
Attorney to transfer said Security on the books of said Company, with full power
of substitution in the premises.
Dated:
---------------------------- -------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as written upon the
first page of the within
Security in every particular,
without alteration or
enlargement or any change
whatever, and be guaranteed by
the endorser's bank or broker.
A-5
<PAGE> 1
EXHIBIT 4(s)
SALOMON SMITH BARNEY HOLDINGS INC.
to
THE CHASE MANHATTAN BANK,
Trustee
=============
FORM OF
FORWARD CONTRACT AND INDENTURE
WITH RESPECT TO
COMMON STOCK OF
=============
Dated as of , 1999
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101 Definitions....................................................1
SECTION 102 Compliance Certificates and Opinions...........................8
SECTION 103 Form of Documents Delivered to Trustee.........................9
SECTION 104 Acts of Holders...............................................10
SECTION 105 Notices, Etc., to Trustee and Company.........................10
SECTION 106 Notice to Holders; Waiver.....................................11
SECTION 107 Conflict with Trust Indenture Act.............................11
SECTION 108 Effect of Headings and Table of Contents......................11
SECTION 109 Successors and Assigns........................................11
SECTION 110 Separability Clause...........................................12
SECTION 111 Benefits of Indenture.........................................12
SECTION 112 Governing Law.................................................12
SECTION 113 Legal Holidays................................................12
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally...............................................12
SECTION 202 Definitive Securities.........................................13
SECTION 203 Form of Trustee's Certificate of Authentication...............13
SECTION 204 Securities in Global Form.....................................13
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued...........................................14
SECTION 302 Execution, Authentication, Delivery and Dating................14
SECTION 303 Global Securities; Temporary Securities.......................15
SECTION 304 Registration, Registration of Transfer and Exchange...........17
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities..............18
SECTION 306 Persons Deemed Owners.........................................19
SECTION 307 Cancellation..................................................19
SECTION 308 Yield Enhancement Payments....................................19
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.......................21
i
<PAGE> 3
SECTION 402 Maturity......................................................22
SECTION 403 Dilution Adjustments..........................................22
SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization
Event.....................................................26
SECTION 405 Adjustments of Exchange Rate..................................27
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events...........................................27
SECTION 502 Acceleration of Maturity......................................28
SECTION 503 Taxes.........................................................29
SECTION 504 Treatment of Forward Contract.................................29
SECTION 505 Notices.......................................................29
SECTION 506 Collection of Amounts Owed and Suits for Enforcement
by Trustee ...............................................29
SECTION 507 Trustee May Enforce Claims Without Possession of Securities...30
SECTION 508 Application of Money Collected................................30
SECTION 509 Limitation on Suits...........................................31
SECTION 510 Restoration of Rights and Remedies............................31
SECTION 511 Rights and Remedies Cumulative................................31
SECTION 512 Delay or Omission Not Waiver..................................32
SECTION 513 Control by Holders............................................32
SECTION 514 Waiver of Past Defaults.......................................32
SECTION 515 Waiver of Stay or Extension Laws..............................33
SECTION 516 Filing Proofs of Claim........................................33
SECTION 517 Unconditional Right of Holders to Receive Payments............34
SECTION 518 Restoration of Rights and Remedies............................34
SECTION 519 Undertaking for Costs.........................................34
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.....................................34
SECTION 602 Certain Duties and Responsibilities of Trustee................36
SECTION 603 Not Responsible for Recitals or Issuance of Securities........37
SECTION 604 May Hold Securities...........................................37
SECTION 605 Money Held in Trust...........................................37
SECTION 606 Compensation and Reimbursement................................37
SECTION 607 Corporate Trustee Required; Eligibility.......................38
SECTION 608 Resignation and Removal; Appointment of Successor.............38
SECTION 609 Acceptance of Appointment by Successor........................40
SECTION 610 Merger, Conversion, Consolidation or Succession to Business...41
SECTION 611 Disclosure of Names and Addresses of Holders..................41
SECTION 612 Reports by Trustee............................................41
ii
<PAGE> 4
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.................................41
SECTION 702 Successor Corporation Substituted.............................42
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures without Consent of Holders............42
SECTION 802 Supplemental Indentures with Consent of Holders...............43
SECTION 803 Execution of Supplemental Indentures..........................44
SECTION 804 Effect of Supplemental Indentures.............................44
SECTION 805 Conformity with Trust Indenture Act...........................44
SECTION 806 Reference in Securities to Supplemental Indentures............45
ARTICLE IX
COVENANTS
SECTION 901 Payment.......................................................45
SECTION 902 Maintenance of Office or Agency...............................45
SECTION 903 Money for Securities Payments to Be Held in Trust.............45
SECTION 904 Limitation on Liens...........................................47
SECTION 905 Waiver of Certain Covenants...................................47
SECTION 906 Officers' Certificate as to Default...........................47
SECTION 907 Payment of Expenses...........................................47
EXHIBIT A-1................................................................A-1
iii
<PAGE> 5
Salomon Smith Barney Holdings Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of
Trust Indenture
Act Section Indenture Section
ss. 310 (a)(1)............................................. 607
(a)(2)............................................. 607
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(a)(5)............................................. 607
(b)................................................ 608
(c)................................................ Not Applicable
ss. 311 (c)................................................ Not Applicable
ss. 312 (a)................................................ 611
(b)................................................ 611
(c)................................................ 611
ss. 313 (a)................................................ 612
(c)................................................ 612
ss. 314 (c)................................................ 102
(d)................................................ Not Applicable
(e)................................................ 102
ss. 315 (a)................................................ 601, 602(a)
(c)................................................ 602(b)
(d)................................................ 601, 602(c)
(e)................................................ 519
ss. 316 (a)(1)(A).......................................... 513
(a)(1)(B).......................................... 514
(a)(2)............................................. Not Applicable
(b)................................................ 517
ss. 317 (a)(1)............................................. 506
(a)(2)............................................. 516
(b)................................................ 903
ss. 318 (a)................................................ 107
- ----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of , 1999, between SALOMON SMITH BARNEY
HOLDINGS INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company") with principal executive offices
at 388 Greenwich Street, New York, New York 10013, and THE CHASE MANHATTAN BANK,
a New York banking corporation (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of certain securities (the "Securities")
representing interests in a forward contract relating to the Common Stock of
and having the terms set forth in this Indenture (the "Forward
Contract"), which will be purchased by TARGETS Trust V, a business trust
established under the laws of the State of Delaware (the "Trust"). This
Indenture is subject to the provisions of the Trust Indenture Act (as
hereinafter defined) that are required to be part of this Indenture and, to the
extent applicable, shall be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States; and, except as otherwise herein or in any
indenture supplemental hereto expressly provided, the term "generally
accepted accounting principles" with
<PAGE> 7
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Accelerated Maturity Date" has the meaning specified in Section
502.
"Accelerated Maturity Payment" has the meaning specified in Section
502.
"Acceleration Event" has the meaning specified in Section 501.
"Act," when used with respect to any Holder, has the meaning
specified in Section 103.
"Affiliate" of any specified Person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" has the meaning specified in Section 204.
"Appreciation Cap" has the meaning specified in Section 402.
"Authorized Newspaper" means a newspaper of general circulation in
the place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required hereunder,
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Board of Directors" means either the Board of Directors of the
Company, or the Executive Committee or any other duly authorized committee of
that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part of the
Securities, issued to the Depositary of Securities in accordance with Section
303, and bearing the legend prescribed in Section 303.
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed;
provided that, when used
2
<PAGE> 8
with respect to any Place of Payment, "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to the Securities.
"Closing Price" of the Common Stock or any marketable security on
any date of determination means the daily closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security as
reported on the New York Stock Exchange ("NYSE") or which is quoted on a
national securities market on such date of determination or, if such security is
not traded on NYSE or quoted on a national securities market on any such date,
as reported in the composite transactions for the principal United States
securities exchange on which if such security is so listed, or if such security
is not so listed on a United States national or regional securities exchange,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock of the Designated Issuer.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board or a
Vice-Chairman, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Treasurer, the Deputy Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date of initial execution of this Indenture is 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" per share of Common Stock as of a particular
date means the average of the Closing Prices of a share of Common Stock on each
of the 10 Trading Days immediately prior to but not including that particular
date.
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"Defaulted Yield Enhancement Payments" has the meaning specified in
Section 308.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, including Book-Entry Securities, the
Person designated as Depositary by the Company until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person
"Depositary" shall be a collective reference to such Persons.
"Designated Issuer" means , a corporation, together with any
successor entity in a merger, consolidation or amalgamation.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 403 (a), (b), (c) or (d).
"Dollar" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"Excess Purchase Payment" has the meaning providing in Section
403(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" has the meaning provided in Section 402.
"Forward Contract" has the meaning specified in the first recital of
this Indenture.
"Global Security" has the meaning specified in Section 204.
"Holder" means, with respect to a Security, the person in whose name
such Security is registered in the Security Register.
"Indenture" means this instrument originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"majority" of the Outstanding Securities means, except as otherwise
provided by the Trust Indenture Act, Outstanding Securities representing an
aggregate of more than 50% of all outstanding interests in the Forward Contract.
"Marketable Securities" has the meaning specified in Section 404.
"Maturity," when used with respect to the Forward Contract, means
the date on which the Maturity Payment or Accelerated Maturity Payment becomes
due and payable as the case may be and as therein or herein provided, whether on
the Maturity Date or an Accelerated Maturity Date.
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<PAGE> 10
"Maturity Date" means .
"Maturity Payment" has the meaning specified in Section 402.
"New York Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York are permitted or
required by any applicable law to close.
"Officers' Certificate" means a written certificate containing the
information specified in Section 102 signed by the Chairman or a Vice Chairman
of the Board, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Controller, the Treasurer, the Deputy Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
which certificate complies with the applicable requirements of Section 314(e) of
the Trust Indenture Act, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to any Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; and
(iii) Securities that have been paid pursuant to Sections 402
or 502 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holder of the requisite
amount or percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting for quorum purposes, and for the purpose of making the calculations
required by Section 316 of the Trust Indenture Act, any Securities owned by the
Company or any other obligor upon such Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Any Securities so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the
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<PAGE> 11
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor. In determining whether the
requisite percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, such percentage
refers to Outstanding Securities representing an aggregate interest in the
Forward Contract equaling at least such percentage.
"Paying Agent" means any Person authorized by the Company to pay
amounts owed on Securities on behalf of the Company.
"Payment Date" means , , and of each year, or, in the case of
Defaulted Yield Enhancement Payments, if any, the date established for payment
pursuant to Section 308.
"Permitted Dividend" has the meaning specified in Section 403(d).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities, means
the place or places where any amounts owed in respect of the Securities are
payable.
"Record Date" means, with respect to any Payment Date, either (i)
the day that is one Business Day prior to such Payment Date so long as the
Securities are in book-entry only form, or (ii) if the Securities are not in
book-entry only form, the day that is 15 days prior to such Payment Date.
"Reorganization Event" has the meaning specified in Section 404.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust officer, any
trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and, in any
case, that has direct responsibility for the administration of this Indenture
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means Salomon Smith Barney Inc. and any
Subsidiary which owns or may hereafter own, directly or indirectly, any of the
voting stock of, or succeeds to any substantial part of the business now
conducted by, Salomon Smith Barney Inc. For the purposes of this definition and
the definition of "Subsidiary", "voting stock" means stock having
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voting power for the election of directors, whether at all times or only for so
long as no senior class of stock has such voting power by reason of any
contingency.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 304.
"Special Record Date" means, for the payment of any Defaulted Yield
Enhancement Payments, if any, a date fixed by the Trustee pursuant to Section
308.
"Stated Amount" means $ .
"Subsidiary" means a corporation, a majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 403, means the average Closing Price
per share of the Common Stock for the Calculation Period of 10 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 403(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 10 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to the "Closing Price" definition. The
"ex-date" with respect to any dividend, distribution or issuance shall mean the
first date on which the shares of Common Stock trade regular way on their
principal market without the right to receive such dividend, distribution or
issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange,
securities market or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange, securities market or association or over-the-counter market that is
the primary market for the trading of such security.
"Transaction Value" has the meaning specified in Section 404.
"Trust" has the meaning specified in the first recital of this
Indenture.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 805.
"Trust Securities" has the meaning specified in Section 907.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Vice President," when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
"Yield Enhancement Payment" means % per annum of the Stated
Amount, accruing from , 1999, computed on the basis of a 360-day year
of twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month, together with, in the case of any
Defaulted Yield Enhancement Payment, interest thereon in accordance with Section
308.
SECTION 102 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of any such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 907) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
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(4) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
SECTION 103 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Any certificate or opinion delivered by the Company to the Trustee
may evidence a signature by facsimile; provided that the Company shall deliver
to the Trustee such certificate or opinion with an original signature within a
reasonable period of time.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders in person or by an agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of
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<PAGE> 15
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
SECTION 104 Acts of Holders.
(a) The ownership of Securities shall be proved by the
Security Register, and the Depositary, or its nominee, shall be deemed the owner
of the Global Securities, and owners of beneficial interests in a Global
Security will not be considered the owners of any Securities.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(c) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, by first-class mail, postage prepaid,
to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice to the Holders thereof shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, by first-class mail,
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Security Register, within the time prescribed for
the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of the
Trustee (which shall include, but not be limited to, hand-delivery or overnight
courier) shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
SECTION 107 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the
Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 110 Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112 Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 113 Legal Holidays.
In any case where any Maturity of any Security or any Payment Date
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities) payment at such Maturity
or Payment Date need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made at such Maturity or Payment Date, as the case
may be, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally.
The Securities shall be in substantially in the form of Exhibit A
hereto with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities are issued in global form as permitted by
Section 303, the form thereof also shall be established as provided in the
preceding sentence.
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SECTION 202 Definitive Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 203 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the form set forth below.
This is one of the Securities designated in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By:
--------------------
Authorized Signatory
SECTION 204 Securities in Global Form.
Except as provided in Section 304 hereof, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of certificated Securities. If Securities are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
or specified number of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate number of Outstanding Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount or changes in the rights of Holders of
Outstanding Securities represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein.
This Section 204 shall apply only to Securities issued in global
form ("Global Securities") and deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 204, authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's written instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, a Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
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prevent the Company, the Trustee, or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security.
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued.
Securities evidencing an aggregate beneficial interest in the
Forward Contract of not more than 100% may be authenticated and delivered under
this Indenture. All Securities shall be substantially identical in form except
for the beneficial interest in the Forward Contract represented thereby.
SECTION 302 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by the
Chairman or a Vice Chairman of the Board, a Vice President, the Chief Financial
Officer or the Chief Accounting Officer, under its corporate seal reproduced
thereon attested by the signature of its Secretary or one of its Assistant
Secretaries or its Treasurer, the Deputy Treasurer or one of its Assistant
Treasurers. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.
The Trustee shall have the right to decline to authenticate and
deliver such Securities if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken or if the Trustee in good faith by
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
If all of the Securities are not to be originally issued at the same
time, then the documents required to be delivered pursuant to this Section 302
must be delivered only once, prior to the authentication and delivery of the
first Security; provided, however, that any
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subsequent request by the Company to the Trustee to authenticate Securities upon
original issuance shall constitute a representation and warranty by the Company
that, as of the date of such request, the statements made in any Opinion of
Counsel delivered pursuant to this Section 302 shall be true and correct as if
made on such date.
If Securities are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order, authenticate and deliver one or more Securities
in global form that (i) shall represent the number of the Outstanding Securities
to be represented by such Global Securities, (ii) shall be registered, if in
registered form, in the name of the Depositary for such Book-Entry Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Unless and until it
is exchanged in whole or in part for Securities in certificated form, this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary" or to such other
effect as the Depositary and the Trustee may agree.
Each Depositary designated for a Book-Entry Security in registered
form must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation. The Trustee shall have no responsibility to
determine if the Depositary is so registered. Each Depositary shall enter into
an agreement with the Trustee governing their respective duties and rights with
regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
The Trustee may appoint an authenticating agent (each, an
"Authentication Agent") to authenticate the Securities. Any Authenticating Agent
may authenticate Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by any
such Authenticating Agent.
SECTION 303 Global Securities; Temporary Securities.
(a) No definitive Security shall be issued in exchange for a
Global Security deposited with the Depositary pursuant to Section 302
representing any Securities unless such transfer complies with Section 304 of
this Indenture and (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Global Security or,
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in the case of a Depositary located in the United States, if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Issuer within 90 days of such
notice or (ii) the Company determines not to have the Securities represented by
a Global Security; provided, however, that the Company may not make such
determination during any period during which the Securities must be held in
global form as may be required by the Securities Act.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 303 shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate number of Securities.
Any portion of a Global Security transferred pursuant to this Section 303 shall
be executed, authenticated and delivered as specified in Section 304 and
registered in such names as the Depositary shall direct.
(c) Subject to the provisions of Section 303(b) above, the
registered holder of a Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a holder is entitled to take under this
Indenture or such Securities.
(d) In the event of the occurrence of any of the events
specified in paragraph (a) of this Section 303 the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which may be in global form, that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. The definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such definitive Securities. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of such temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 902,
without charge to the Holder in a Place of Payment. Upon surrender for
cancellation of any temporary Securities, the Company shall execute, and the
Trustee shall authenticate and deliver, in exchange therefor the same aggregate
number of definitive Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
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SECTION 304 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company maintained pursuant to Section 902 in a Place of
Payment being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency maintained pursuant to Section 902 in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities,
evidencing a like aggregate beneficial interest in the Forward Contract.
At the option of the Holder, Securities (except a Global Security
representing all or a portion of the Securities which may be exchanged in
accordance with Section 303 hereof) may be exchanged for other Securities
evidencing a like aggregate interest in the Forward Contract, upon surrender of
the Securities to be exchanged at such office or agency.
If at any time the Depositary for the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities or if at any time the Depositary for the Securities shall no longer
be eligible under Section 302, the Company shall appoint a successor Depositary
with respect to the Securities.
The Depositary may surrender a Global Security in exchange in whole
or in part for Securities in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge, to each
Person specified by such Depositary a new certificated Security or Securities of
like tenor, in aggregate number equal to and in exchange for such Person's
beneficial interest in the Global Security, and to such Depositary a new Global
Security of like tenor representing an aggregate number of securities equal to
the difference, if any, between the aggregate beneficial interest in the Forward
Contract represented by the surrendered Global Security and the aggregate
beneficial interest in the Forward Contract represented by the certificated
Securities delivered to Holders thereof.
Upon the exchange in full of a Global Security for Securities in
certificated form, such Global Security shall be canceled by the Trustee. Except
as provided in Section 303(a) and (b) hereof, Securities issued in exchange for
a Book-Entry Security pursuant to this Section shall be registered in such names
as the Depositary for such Book-Entry Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall make available such Securities to the Persons in whose names
such Securities are so registered.
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Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
obligation, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange. The
Trustee shall have no liability for any transfers or exchanges of the Securities
in accordance with the provisions of this Indenture being in compliance with the
Securities Act or any other applicable law.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Securities Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 303 or 806 not involving
any transfer.
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and evidencing a like aggregate beneficial
interest in the Forward Contract.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
a new Security evidencing a like aggregate beneficial interest in the Forward
Contract.
Upon the issuance of any new Security under this Section, the
Company or the Securities Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone,
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and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of any mutilated, destroyed, lost or stolen Securities.
SECTION 306 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment in respect of amounts owed on such
Security and for all other purposes whatsoever, whether or not such payments
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary; provided,
however, that the Depositary, or its nominee, shall be deemed the owner of any
Global Securities registered in its name, and owners of beneficial interests in
a Global Security will not be considered the owners of any Securities for
purposes of this Indenture.
SECTION 307 Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be destroyed by the
Trustee and a certificate evidencing such destruction shall be delivered to the
Company.
SECTION 308 Yield Enhancement Payments.
A pro rata portion (based on the beneficial interest in the Forward
Contract represented by each of the Securities) of the Yield Enhancement
Payment, if any, shall be remitted (a) by the Company to the Paying Agent prior
to 10:00 am on each Payment Date and (b) thereafter by the Paying Agent on each
Payment Date to the Persons in whose name such Securities are registered at the
close of business on the Record Date therefor. At least 5 Business Days prior to
the applicable Record Date, the Company shall notify the Trustee in writing of
the aggregate amount of the Yield Enhancement Payment, if any, to be paid on
each Payment Date.
In the event of acceleration of maturity of the Forward Contract to
an Accelerated Maturity Date occurring after any Record Date and on or prior to
the next succeeding Payment Date, Yield Enhancement Payments, if any, otherwise
payable on such Payment Date shall be payable on the Accelerated Maturity Date,
and such Yield Enhancement Payments (in the amounts determined as provided
above) shall be paid to the Persons in whose name the
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Securities are registered at the close of business on such Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of acceleration of maturity of the Forward Contract to an Accelerated
Maturity Date, Yield Enhancement Payments, if any, that would otherwise be
payable after the Accelerated Maturity Payment with respect to the Forward
Contract shall not be payable.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer making Yield Enhancement Payments
during the period until the Maturity Date or the Accelerated Maturity Date, as
the case may be. Yield Enhancement Payments, if any, which are payable, but are
deferred by the Company and not punctually paid or duly provided for, on any
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Record Date by virtue of having been such Holder, and such Yield Enhancement
Payments, together with, to the extent permitted by applicable law, interest
thereon at the rate of % compounded quarterly for each quarter until such
Yield Enhancement Payments are paid (herein called "Defaulted Yield Enhancement
Payments"), may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Yield Enhancement Payments, if any, to the Persons in whose names the
Securities are registered at the close of business on a Special Record
Date for the payment of such Defaulted Yield Enhancement Payments, if any,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing at least one Business Day prior to the Payment Date on
which Yield Enhancement Payments would otherwise be payable of the
aggregate amount of Defaulted Yield Enhancement Payments, if any, proposed
to be paid on the Securities and the date of the proposed payment.
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Yield Enhancement Payments, if any, which shall be (i) not
more than 15 Business Days and not less than 10 Business Days prior to the
date of the proposed payment or (ii) if the Company proposes to pay such
Defaulted Yield Enhancement Payments as part of the Maturity Payment, the
Record Date with respect to the Maturity Date. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Yield Enhancement Payments, if any, and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities at such Holder's address as it appears in the Security
Register, not less than 10 Business Days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Yield Enhancement
Payments, if any, and the Special Record Date therefor having been so
mailed, such Defaulted Yield Enhancement Payments, if any, shall be paid
to the Person in whose name the Securities are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2),
(2) The Company may make payment of any Defaulted Yield
Enhancement Payments, if any, in any other lawful manner not inconsistent
with the requirements of any stock exchange or national securities market
on which any securities issued by the Trust are listed, and upon such
notice as may be required by such exchange
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or market, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
At the option of the Company, Yield Enhancement Payments, if any,
shall be remitted by the Trustee (i) by mailing a check to the address of the
persons entitled thereto as such address shall appear in the Security Register
or (ii) by wire transfer to an account maintained by the persons entitled
thereto as specified in the applicable Security Register if such person (a)
shall have provided wire instructions to the Paying Agent at least five (5)
Business Days prior to the relevant Record Date and (b) holds an aggregate
Security representing the right to receive, at maturity, at least $5,000,000.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to Yield Enhancement
Payments, if any, accrued and unpaid, and to be accrued, which were carried by
such other Security.
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities (except as to any surviving rights of
registration of transfer or exchange of Securities and replacement of lost,
stolen or mutilated Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either
(A) all Securities theretofore authenticated and
delivered have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company
has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge all amounts owed in respect of such Securities not
theretofore delivered to the Trustee for cancellation.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of this
Section, the obligations of the Trustee under the last paragraph of Section 903,
shall survive.
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SECTION 402 Maturity.
Subject to earlier acceleration of maturity in accordance with
Article V hereof, on the Maturity Date the Company shall be obligated to pay to
the Holders, in respect of the Securities held by them, an amount in cash (the
"Maturity Payment") equal to a pro rata portion (based on the beneficial
interest in the Forward Contract represented by such Securities) of the sum of
(A) the product of (i) multiplied by (ii) the Current Market Price of the
Common Stock as of the date one New York Business Day prior to the Maturity Date
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Maturity Date.
The "Exchange Rate" shall be determined in accordance with the
following formula, subject to adjustment as a result of certain events as
provided in Sections 403, 404 and 405: (i) if the Current Market Price of the
Common Stock as of the Maturity Date or the Accelerated Maturity Date, as the
case may be, is less than or equal to $ (the "Appreciation Cap"), then the
Exchange Rate shall be , and (ii) if the Current Market Price of the Common
Stock as of the Maturity Date or the Accelerated Maturity Date, as the case may
be, is greater than the Appreciation Cap, then the Exchange Rate shall be a
fraction (rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th), of which the numerator
is the Appreciation Cap, and of which the denominator is the Current Market
Price of the Common Stock as of the Maturity Date or the Accelerated Maturity
Date, as the case may be.
SECTION 403 Dilution Adjustments.
The Exchange Rate and the Appreciation Cap shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends, Splits Reclassifications. Etc. If the
Designated Issuer shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect
to Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock
into a greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares; or
(iv) issue by reclassification of shares of its Common Stock
any shares of other common stock of the Designated Issuer;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Designated Issuer issued pursuant
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thereto), or the fraction thereof that a holder who held one share of Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Cap shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Designated Issuer
shall, after the date hereof, issue, or declare a record date in respect of an
issuance of, rights or warrants to all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Then-Current Market Price of the Common Stock (other than rights to purchase
Common Stock pursuant to a plan for the reinvestment of dividends or interest),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the time the adjustment
is effected by reason of the issuance of such rights or warrants, plus the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to the time the
adjustment is effected, plus the number of additional shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered for subscription or purchase pursuant to such rights or warrants
would purchase at the Then-Current Market Price of the Common Stock, which shall
be determined by multiplying the total number of shares so offered for
subscription or purchase by the exercise price of such rights or warrants and
dividing the product so obtained by such Then-Current Market Price. To the
extent that, after the expiration of such rights or warrants, the shares of
Common Stock offered thereby shall not have been delivered, the Exchange Rate
shall be further adjusted to equal the Exchange Rate which would have been in
effect had such adjustment for the issuance of such rights or warrants been made
upon the basis of delivery of only the number of shares of Common Stock actually
delivered. The Appreciation Cap shall also be adjusted in the manner described
in paragraph (e).
(c) Distributions of Other Assets. If the Designated Issuer
shall, after the date hereof, declare or pay a dividend or make a distribution
to all holders of Common Stock, in either case, of evidences of its indebtedness
or other non-cash assets (excluding any dividends or distributions referred to
in paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
the numerator of which shall be the Then-Current Market Price per share of the
Common Stock, and the denominator of which shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) as of the time the adjustment is
effected of the portion of the assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of Common Stock. The
Appreciation Cap shall also be adjusted in the manner described in subparagraph
(e). Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which this paragraph (c) would otherwise apply, the
denominator in the fraction referred to above formula is less than $1.00 (or is
a negative number), then the Company may, at its option, elect to have the
adjustment provided by this
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paragraph (c) not be made and in lieu of such adjustment, on the Maturity Date,
the Company shall deliver to the Holders of the Securities an additional amount
of cash equal to the fair market value of such indebtedness, assets, rights or
warrants (determined, as of the date such dividend or distribution is made, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination shall be final) so distributed or
issued.
(d) Cash Dividends; Excess Purchase Payments. If, after the
date hereof, the Designated Issuer declares a record date in respect of a
distribution of cash (other than any Permitted Dividends, any cash distributed
in consideration of fractional shares of Common Stock and any cash distributed
in a Reorganization Event), by dividend or otherwise, to all holders of Common
Stock, or makes an Excess Purchase Payment, then the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Common Stock on such record date,
and the denominator of which shall be such Then-Current Market Price less the
amount of such distribution applicable to one share of Common Stock which would
not be a Permitted Dividend (or in the case of an Excess Purchase Payment, less
the aggregate amount of such Excess Purchase Payment for which adjustment is
being made at such time divided by the number of shares of Common Stock
outstanding on such record date). For purposes of these adjustments, (A)
"Permitted Dividend" means any quarterly cash dividend in respect of Common
Stock, other than a quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the extent that the per
share amount of such dividend results in an annualized dividend yield on the
Common Stock in excess of 10.0% and (B) "Excess Purchase Payment" means the
excess, if any, of (x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) of all other consideration paid by
the Designated Issuer or any of its subsidiaries with respect to one share of
Common Stock acquired in a tender offer or exchange offer by the Designated
Issuer or any of its subsidiaries, over (y) the Then-Current Market Price of the
Common Stock. The Appreciation Cap shall also be adjusted in the manner
described in subparagraph (e). Notwithstanding the foregoing, in the event that,
with respect to any dividend or distribution to which this paragraph (d) would
otherwise apply, the denominator in the fraction referred to above formula is
less than $1.00 (or is a negative number), then the Company may, at its option,
elect to have the adjustment provided by this paragraph (d) not be made and in
lieu of such adjustment, on the Maturity Date, the Company shall deliver to the
Holders of the Securities an additional amount of cash equal to the amount of
cash plus the fair market value of such other consideration (determined, as of
the date such dividend or distribution is made, by a nationally recognized
independent investment banking firm retained for this purpose by the Company,
whose determination shall be final) so distributed (or applied to the
acquisition of the Common Stock in such a tender offer or exchange offer).
(e) Adjustments to Appreciation Cap and Closing Prices. (i) If
any adjustment is made to the Exchange Rate pursuant to paragraph (a), (b), (c)
or (d) this Section 403, an adjustment shall also be made to the Appreciation
Cap. The required adjustment shall be made by dividing the Appreciation Cap by
the relevant Dilution Adjustment.
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(ii) If, during any Calculation Period used in calculating the
Current Market Price, the Then-Current Market Price or the Transaction Value,
there shall occur any event requiring an adjustment to be effected pursuant to
this Section 403, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution or issuance, at
the opening of business on the Business Day next following the record date
for determination of holders of Common Stock entitled to receive such
dividend, distribution or issuance or, if the announcement of any such
dividend, distribution, or issuance is after such record date, at the time
such dividend, distribution or issuance shall be announced by the
Designated Issuer;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Designated Issuer shall announce, at or prior to the time it commences the
relevant share repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment on the
date that the holders of the repurchased shares become entitled to payment
in respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
Section 403 shall subsequently be canceled by the Designated Issuer, or such
dividend, distribution, issuance or repurchase shall fail to receive requisite
approvals or shall fail to occur for any other reason, then, upon such
cancellation, failure of approval or failure to occur, the Exchange Rate shall
be further adjusted to the Exchange Rate which would then have been in effect
had adjustment for such event not been made. If a Reorganization Event shall
occur after the occurrence of one or more events requiring an adjustment
pursuant to this Section 403, the Dilution Adjustments previously applied to the
Exchange Rate in respect of such events shall not be rescinded but shall be
applied to the new Exchange Rate provided for under Sections 404 and 405.
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SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Designated
Issuer, or any surviving entity or subsequent surviving entity of the Designated
Issuer (a "Designated Issuer Successor"), with or into another entity (other
than a merger or consolidation in which the Designated Issuer is the continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property
of the Designated Issuer or another Person), (ii) any sale, transfer, lease or
conveyance to another Person of the property of the Designated Issuer or any
Designated Issuer Successor as an entirety or substantially as an entirety,
(iii) any statutory exchange of securities of the Designated Issuer or any
Designated Issuer Successor with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Designated Issuer or any Designated Issuer Successor (any such event described
in clause (i), (ii), (iii) or (iv), a "Reorganization Event"), the Exchange Rate
shall be adjusted so that, on the Maturity Date, the Holders of the Securities
shall receive cash in an amount equal to the product of the number of Trust
Securities held by such Holder multiplied by (i) if the Transaction Value is
less than or equal to the Appreciation Cap, times the Transaction Value, and
(ii) if the Transaction Value is greater than the Appreciation Cap, times the
Appreciation Cap.
"Transaction Value" means the sum of: (a) for any cash received in
any such Reorganization Event, the amount of cash received per share of Common
Stock; (b) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination shall
be final); and (c) for any Marketable Securities received in any such
Reorganization Event, an amount equal to the average Closing Price per share of
such Marketable Securities for the Calculation Period of 10 Trading Days
immediately prior to the date one New York Business Day prior to the Maturity
Date multiplied by the number of such Marketable Securities received for each
share of Common Stock; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days
such Trading Day shall be disregarded in the calculation of such average Closing
Price (but no additional trading days shall be added to the Calculation Period).
If no Closing Price for the Marketable Securities may be determined for all such
Trading Days, the calculation in the preceding clause (c) shall be based on the
most recently available Closing Price for the Marketable Securities prior to
such 10 Trading Days.
"Marketable Securities" means any perpetual equity securities or
debt securities with a stated maturity after the Maturity Date, in each case
that are listed on a U.S. national securities exchange or reported by the Nasdaq
National Market. The number of shares of any equity securities constituting
Marketable Securities included in the calculation of Transaction Value pursuant
to the preceding clause (c) shall be subject to adjustment if any event that
would, had it occurred with respect to the Common Stock or the Designated
Issuer, have required an adjustment pursuant to Section 403 shall occur with
respect to such Marketable Securities or the
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issuer thereof between the time of the Reorganization Event and the Maturity
Date. Adjustment for such subsequent events shall be as nearly equivalent as
practicable to the adjustments provided for in Section 403.
SECTION 405 Adjustments of Exchange Rate.
The Company shall be responsible for the effectuation and
calculation of any adjustment pursuant this Article IV and shall furnish the
Trustee with notice of any such adjustment. The Trustee shall be under no duty
or obligation to review or determine any calculations, adjustments, dividend
calculations, determination of either the Maturity Payment or Accelerated
Maturity Payment payable hereunder, exchange rate determinations or any other
calculation set forth in this Article IV or in Section 502 hereof.
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events.
"Acceleration Event," wherever used herein, means any one of the
following events:
(a) the entry of a decree or order for relief in respect of
the Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(b) the commencement by the Company of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action; or
(c) the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been (a) an amendment to, change in or announced proposed change
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying, or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of an official position) of the governmental
authority or regulatory body making
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such administrative pronouncement or taking such action, or (d) a threatened
challenge asserted in connection with an audit of the Company, any of its
subsidiaries or the Trust, or a threatened challenge asserted in writing against
any other taxpayer that has raised capital through the issuance of securities
that are substantially similar to the Securities or the TARGETS, which amendment
or change is adopted or which proposed change, decision or pronouncement is
announced or which action, clarification or challenge occurs on or after the
date of the Prospectus relating to the original issuance of the TARGETS
(collectively a "Tax Action"), which Tax Action relates to any of the items
described in (i) and (ii) below, and that there is more than an insubstantial
risk that (i) the Trust is, or will be subject to United States federal income
tax with respect to income accrued or received in respect of the Forward
Contract or the Treasury Securities, or (ii) the Trust is, or will be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges; or
(d) the receipt by the Company of an opinion of a nationally
recognized independent counsel experienced in such matters to the effect that as
a result of the occurrence on or after the date hereof of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
SECTION 502 Acceleration of Maturity.
(a) If an Acceleration Event described in Section 501 shall
occur and be continuing, then the Company shall give written notice thereof to
the Trustee, which notice shall include a statement as to the amount of the
Accelerated Maturity Payment. On the Accelerated Maturity Date the Forward
Contract shall be automatically accelerated and the Accelerated Maturity Amount
shall be immediately due and payable. Upon receipt by the Trustee of the
Accelerated Maturity Amount, the Trustee shall remit to the Holders, in respect
of the Securities held by them, an amount in cash (the "Accelerated Maturity
Payment") equal to a pro rata portion (based on the beneficial interest in the
Forward Contract represented by such Securities) of the sum of (A) the product
of (i) multiplied by (ii) the Current Market Price of the Common Stock as of
the date one New York Business Day prior to the Accelerated Maturity Date,
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Accelerated Maturity Date.
(b) As used herein, the "Accelerated Maturity Date" means the
date of the occurrence of the event or events constituting such Acceleration
Event.
(c) The Company agrees, and each Holder of Securities, by such
Holder's acceptance thereof, agrees that the Accelerated Maturity Amount is a
reasonable pre-estimate of loss to such Holder and is not a penalty. Such amount
is payable for the loss of bargain and a Holder will not be entitled to recover
additional damage as a consequence of loss resulting from any Acceleration
Event.
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SECTION 503 Taxes.
The Company shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Indenture and the performance of its obligations hereunder.
SECTION 504 Treatment of Forward Contract.
The Company hereby agrees that: (i) it will not treat this
Indenture, any portion of the Securities, or any obligation hereunder (except in
regards to any Yield Enhancement Payments (if any)) as giving rise to any
interest income or other inclusion of ordinary income on the part of the Holders
of the Securities; (ii) it will not treat the delivery of any portion of the
cash to be delivered pursuant to this Indenture (except in regards to any Yield
Enhancement Payments (if any)) as the payment of interest or ordinary income;
(iii) it will treat this Indenture in its entirety as a forward contract for the
delivery of such cash, under the terms of which contract (a) at the time of
issuance of the Securities the Holder deposits irrevocably with the Company a
fixed amount of cash equal to the purchase price of the Securities to assure the
fulfillment of the Holder's purchase obligation described in clause (c) below,
which deposit will unconditionally and irrevocably be applied at Maturity to
satisfy such obligation, (b) until Maturity the Company may be obligated to pay
Yield Enhancement Payments on such deposit as compensation to the Holder for the
Company's use of such cash deposit during the term of the Securities, and (c) at
Maturity such cash deposit unconditionally and irrevocably will be applied by
the Company in full satisfaction of the Holder's obligation under the forward
purchase contract, and the Company will deliver to the Holder the amount of cash
that the Holder is entitled to receive at that time pursuant to the terms of the
Securities; and (iv) it will not take any action (including filing any tax
return or form or taking any position in any tax proceeding) that is
inconsistent with the obligations contained in the foregoing clauses (i) through
(iii). Notwithstanding the preceding sentence, the Company may take any action
or position required by law, provided that the Company delivers to the Trustee
an opinion of counsel, nationally recognized as expert in Federal tax matters,
to the effect that such action or position is required by a statutory change,
Treasury regulation, or applicable court decision published after the date of
this Indenture.
SECTION 505 Notices.
The Company will or will cause to be delivered to the Trustee and to
each Holder:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder, or upon the Company's obtaining knowledge that any of the conditions
or events described in Section 501(a) or (b) shall have occurred with respect to
the Designated Issuer, notice of such occurrence; and
(b) In case at any time prior to the Maturity Date the Company
receives notice, or otherwise obtains knowledge, that any event requiring that
an adjustment be effected pursuant to Sections 403, 404 and 405 hereof shall
have occurred or be pending, then the Company shall promptly cause to be
delivered to the Trustee and each Holder a notice identifying such event and
stating, if known to the Company, the date on which such event is to occur and,
if applicable, the record date relating to such event. The Company shall cause
further notices to be delivered to the Trustee and each Holder if the Company
shall subsequently receive notice, or otherwise obtain knowledge, of any further
or revised information regarding the terms or timing of such event or any record
date relating thereto.
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by Trustee.
The Company covenants that if default is made in the payment of
amounts owed on any Security at Maturity, the Company will, upon demand of the
Trustee, pay to it, for the
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benefit of the Holders of such Securities the whole amount then due and payable
on such Securities and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and shall
at the direction of the Holders of a majority of the Outstanding Securities,
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, prosecute such proceeding to judgment or final decree,
and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, enforce the same against the Company or any other
obligor upon such Securities, and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or any
other obligor upon such Securities wherever situated.
If an Acceleration Event occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of the Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 507 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expense,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 508 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of the Securities, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
606; and
Second: To the payment of the amounts then due and unpaid on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities.
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Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 509 Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has (i) previously given written notice to the
Trustee of a continuing Acceleration Event with respect to the Forward
Contract and (ii) the Holders of not less than 25% of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Acceleration Event in its own name as
Trustee hereunder;
(2) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(3) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(4) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Securities; it being understood and intended
that no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other of such Holders,
or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of
Holders. For the protection and enforcement of the provisions of this
Section 509, each and every Holder of Securities and the Trustee shall be
entitled to such relief as can be given at law or in equity.
SECTION 510 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 511 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of a mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 305, no right or
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remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 512 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Acceleration Event
shall impair any such right or remedy or constitute a waiver of any such
Acceleration Event or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 513 Control by Holders.
The Holders of a majority of the Outstanding Securities shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed would
be unjustly prejudicial to the Holders of Securities not joining in any
such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 514 Waiver of Past Defaults.
The Holders of not less than a majority of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
default hereunder and its consequences, except a default in the payment of
amounts owed in respect of any Security, or in respect of a covenant or
provision hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Acceleration Event arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture,
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but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 515 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516 Filing Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, competition or
other judicial proceedings, or any voluntary or involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, relative to the
Company or any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the amount owed on such Securities shall then be due and payable as
therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of amounts due on the Securities) shall be entitled and
empowered, any intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amounts owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders of
such Securities allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606 of this Indenture.
Nothing herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt, on behalf of any Holder any plan or
reorganization, arrangement, adjustment
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or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in such
proceeding.
SECTION 517 Unconditional Right of Holders to Receive Payments.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the amounts owed on such Security and to institute suit for
the enforcement of any such payment and interest thereon, and such right shall
not be impaired without the consent of the Holder.
SECTION 518 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 519 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section 519 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% of the Outstanding Securities, or to any suit
instituted by any Holder of a Security for the enforcement of the payment of
amounts owed on such Security on or after the Maturity Date or Accelerated
Maturity Date.
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, certification, order, act or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may at any time (i) consult with counsel and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and (ii) seek instructions
concerning the administration of this Indenture from any court of competent
jurisdiction;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have provided to the Trustee reasonable security or indemnity against the
costs, expenses (including attorney's fees and expenses and the expenses of the
Trustee's agents, nominees and custodians) and liabilities which might be
incurred by it in compliance with such request or direction including such
reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(including, without limitations, any instruments or certificates delivered
pursuant to Section 304 hereof), but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it;
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(i) the granting of any right to the Trustee hereunder shall
not be deemed to impose on the Trustee an obligation to exercise such rights,
subject to Section 601(j); and
(j) the Trustee shall not be obligated to take any action or
to exercise any remedy hereunder unless directed to do so by the Holders of a
majority of the Securities then Outstanding and shall have no liability for its
failure to act pending receipt by it of any such direction.
This Section 601 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 602 Certain Duties and Responsibilities of Trustee.
(a) Except upon the occurrence of an Acceleration Event;
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Acceleration Event with respect to the
Securities, of which a Responsible Officer of the Trustee has actual knowledge,
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
Outstanding Securities determined as provided in Section 513,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect
to the Securities; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or indemnity, reasonably satisfactory to it, against such risk
or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 603 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 604 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee
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of an express trust as set forth in a separate fee letter between
the Trustee and the Company);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise of
performance of any of its powers or duties hereunder.
SECTION 607 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be
eligible to act as Trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
SECTION 608 Resignation and Removal; Appointment of Successor.
(a) The Trustee may resign at any time with respect to the
Securities upon giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 609 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.
(b) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of a majority of the Outstanding Securities,
delivered to the Trustee and to the Company.
(c) If at any time:
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(1) the Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(c) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities (it being understood that any such successor Trustee may be appointed
with respect to the Securities and that at any time there shall be only one
Trustee with respect to the Securities) and shall comply with the applicable
requirements of Section 609. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities shall be appointed by Act of the Holders of a majority
of the Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 609,
become the successor Trustee with respect to the Securities and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 609, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities and each appointment of a
successor Trustee with respect to the Securities in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities and the address of its Corporate Trust Office.
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<PAGE> 45
SECTION 609 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under the Trust Indenture Act.
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SECTION 610 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 611 Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders of
Securities in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
SECTION 612 Reports by Trustee.
Within 60 days after April 15 of each year commencing with the first
May 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in Trust
Indenture Act Section 313(c) a brief report dated as of such April 15 if
required by Trust Indenture Act Section 313(a).
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the
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Trustee, in form satisfactory to the Trustee, the due and punctual
payment of amounts owed on all Securities and the performance of
every covenant of this Indenture on the part of the Company to be
performed or observed,
(2) immediately after giving effect to such transaction,
no Acceleration Event, and no event which, after notice or lapse of
time or both, would become an Acceleration Event, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 702 Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
701, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company; or
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(3) to add any additional Acceleration Events with
respect to the Forward Contract; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of the Securities in bearer form,
registrable or not registrable, or to provide for an uncertificated
(commonly known as "book-entry") Security on terms satisfactory in
substance to the Trustee; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Security which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 609(b); or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall
not adversely affect the interests of the Holders of Securities in
any material respect.
SECTION 802 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, however, that no
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Maturity of the Forward Contract, or
reduce the Maturity Payment payable on the Maturity Date, or reduce
the Accelerated Maturity Payment that would be due and payable on an
Accelerated Maturity Date pursuant to Section 502, or reduce the
Yield Enhancement Payments, if any, that would be due and payable
pursuant to Section 308, or change the coin or currency in which
amounts owed in respect of the Forward Contract are payable, or
impair the right to institute suit for the enforcement of any such
payment, on or after the Maturity thereof, or reduce the percentage
of the Outstanding Securities, the
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consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in
this Indenture, or
(2) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 902, or
(3) modify any of the provisions of this Section 802,
Section 515, or Section 905, except to increase any such percentage
in Section 905 to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of Sections 608(b)
and 801(7).
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 803 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel, the
preparation of which shall not be at the expense of the Trustee, stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 804 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 805 Conformity with Trust Indenture Act.
After this Indenture is qualified pursuant to the Trust Indenture
Act, every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 806 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
any new Securities so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE IX
COVENANTS
SECTION 901 Payment.
The Company covenants and agrees for the benefit of the Holders of
the Securities that it will duly and punctually pay all amounts owed on the
Securities in accordance with the terms of the Securities and this Indenture.
SECTION 902 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for the
Securities an office or agency where the Securities may be presented or
surrendered for payment, where the Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof; such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for the Securities for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 903 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any Securities, it will, on or before each due date of amounts owed
on such Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the amounts
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owed so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it will, prior to each due date of amounts owed in
respect of the Securities, deposit with any such Paying Agent a sum sufficient
to pay the amounts owed in respect of the Securities so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent of the Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of amounts
owed in respect to the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of
any payment of amounts owed in respect to the Securities; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the amounts owed in respect to
any Security and remaining unclaimed for two years after such amount has become
due and payable shall be paid to the Company on Company Request along with any
interest that has accumulated thereon as a result of such money being invested
at the direction of the Company, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
amounts without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
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published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.
SECTION 904 Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
to, incur, issue, assume guarantee or suffer to exist any indebtedness for
borrowed money (indebtedness for borrowed money being hereinafter in this
section called "debt") if such debt is secured by a pledge of, lien on, or
security interest in any shares of stock of any Restricted Subsidiary, whether
such stock is now owned or shall hereafter be acquired, without effectively
providing that the Securities shall be secured equally and ratably with such
debt.
SECTION 905 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant, set forth herein, if before the time for such compliance, the Holders
of at least a majority of the Outstanding Securities shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant, but no such waiver shall extend to or affect such
covenant except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant shall remain in full force and effect.
SECTION 906 Officers' Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not
more than four months after the end of each fiscal year of the Company (which on
the date hereof is the calendar year) ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observation of any of the
terms, provisions and conditions of this Indenture, and, if the Company shall be
in default, specifying all such defaults and the nature thereof of which they
may have knowledge.
The Company will deliver written notice to the Trustee promptly
after any officer of the Company has knowledge of the occurrence of any event
that with the giving of notice or the lapse of time or both would become an
Acceleration Event under Section 501.
SECTION 907 Payment of Expenses.
(a) In connection with the offering, sale and issuance of the
Securities and in connection with the sale of any securities by the Trust
(collectively, the "Trust Securities"), the Company, in its capacity as issuer
with respect to the Securities, shall:
(i) pay all costs and expenses relating to the offering,
sale and issuance of the Trust Securities, including
commissions and
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compensation to the underwriters payable pursuant to any
applicable underwriting agreement and compensation of
the Trustee under this Indenture in accordance with the
provisions of Section 606;
(ii) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and
issuance of the Trust Securities of the Trust (including
commissions and compensation to the underwriters in
connection therewith), the fees and expenses of the
Institutional Trustee, the Regular Trustees and the
Delaware Trustee of the Trust, the costs and expenses
relating to the operation, maintenance and dissolution
of the Trust and the enforcement by the Institutional
Trustee of the rights of the holders of the Trust
Securities, including without limitation, costs and
expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of
assets of the Trust);
(iii) be primarily liable for any indemnification obligations
arising with respect to the Declaration of the Trust and
the Amended and Restated Declaration of the Trust; and
(iv) pay any and all taxes (other than United States
withholding taxes in respect of amounts paid on the
Securities held by the Trust) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
(b) Upon termination of this Indenture or the Securities or
the removal or resignation of the Trustee pursuant to Section 608, the Company
shall pay to the Trustee all amounts accrued and owing to the Trustee to the
date of such termination, removal or resignation. Upon termination of the
Amended and Restated Declaration of the Trust or the removal or resignation of
the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant
to Section 5.6 of the Amended and Restated Declaration of the Trust, the Company
shall pay to such Delaware Trustee or such Institutional Trustee, as the case
may be, all amounts accrued and owing to such Delaware Trustee or such
Institutional Trustee, as the case may be, to the date of such termination,
removal or resignation.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SALOMON SMITH BARNEY HOLDINGS INC.
By:
------------------------------
Name:
Title:
[SEAL]
Attest:
- ---------------------------
THE CHASE MANHATTAN BANK, Trustee
By:
------------------------------
Name:
Title:
[SEAL]
Attest:
- ---------------------------
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STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this day of , before me personally appeared
, to be known, who, being by me duly sworn, did depose and say that he is
a of SALOMON SMITH BARNEY HOLDINGS INC., the corporation described in
and which executed the foregoing instrument; that he knows the seal of the said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the board of directors of said
corporation; and that he signed his name thereto by like authority.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------
Notary Public
[Notarial Seal]
50
<PAGE> 56
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , before me personally appeared
, to me known, who, being by me duly sworn, did depose and say that he is
a of The Chase Manhattan Bank, the New York banking corporation
described in and which executed the forgoing instrument; that she knows the seal
of said New York banking corporation; that the seal affixed to said instrument
is such seal; that it was so affixed by authority of the Board of Directors of
said New York banking corporation, and that she signed her name thereto by like
authority.
---------------------------------
Notary Public
[Notarial Seal]
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EXHIBIT A
NO. 1
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
SALOMON SMITH BARNEY HOLDINGS INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person), for value received, hereby certifies that The
Chase Manhattan Bank, as Institutional Trustee of TARGETS Trust V, or registered
assigns, is the owner of a 100% interest in the Forward Contract (as defined in
the Indenture referred to below) and, as such, is entitled to receive from the
Company its pro rata share of (i) the Maturity Payment on , subject to
acceleration to an Accelerated Maturity Date and adjustment to the Accelerated
Maturity Payment pursuant to the terms of the Indenture and (ii) the Yield
Enhancement Payments, if any, on each Payment Date.
Payment of (i) the Maturity Payment or Accelerated Maturity Payment,
as the case may be, and (ii) the Yield Enhancement Payments, if any, with
respect to this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth after the Trustee's certificate of authentication, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
A-1
<PAGE> 58
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SALOMON SMITH BARNEY HOLDINGS INC.
-------------------------------
By:
-------------------------------
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:
-------------------------------
Authorized Signatory
A-2
<PAGE> 59
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
This Security is one of a duly authorized issue of the Company
(herein called the "Securities"), issued and to be issued under an Indenture
dated as of , 1999 (herein called the "Indenture") between the Company
and The Chase Manhattan Bank (herein called the "Trustee," which term includes
any successor trustee under the Indenture), relating to a Forward Contract with
respect to Common Stock, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities are not subject to redemption at the option of the
Company or at the option of the Holder prior to maturity; however, if certain
Acceleration Events shall have occurred and be continuing, the maturity of the
Securities will be accelerated to the Accelerated Maturity Date pursuant to the
terms of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority of the Securities at the time Outstanding to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages of the Securities at the time Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by a Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay (i) the Maturity Payment or
Accelerated Maturity Payment, as the case may be, and (ii) the Yield Enhancement
Payments, if any, with respect to this Security at the time, place and rate, and
in the coin or currency, prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar and duly executed
by, the Holder hereof or the Holder's attorney duly authorized in writing, and
thereupon one or more new Securities will be issued to the designated transferee
or transferees.
A-3
<PAGE> 60
The Securities are issuable only in registered form. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for one or more new Securities of like tenor and
representing an equal aggregate beneficial interest in the Forward Contract to
be surrendered for exchange. If (a) any Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days or (b) the Company executes and delivers to the
Trustee a Company Order to the effect that the Global Securities shall be
exchangeable for certificated Securities, the Global Securities will be
exchangeable for Securities in definitive certificated form of like tenor. Such
definitive Securities shall be registered in such name or names as the
Depositary shall instruct the Trustee.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
--------------------
A-4
<PAGE> 61
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[Please Insert Social Security Number or Other Identifying Number of Assignee]
________________________________________________________________________________
[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE:]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The within Security of Salomon Smith Barney Holdings Inc. and does hereby
irrevocably constitute and appoint
________________________________________________________________________________
Attorney to transfer said Security on the books of said Company, with full power
of substitution in the premises.
Dated: ______________________________ ________________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the first page of
the within Security in every
particular, without alteration or
enlargement or any change whatever,
and be guaranteed by the endorser's
bank or broker.
A-5
<PAGE> 1
EXHIBIT 4(t)
SALOMON SMITH BARNEY HOLDINGS INC.
to
THE CHASE MANHATTAN BANK,
Trustee
============
FORM OF
FORWARD CONTRACT AND INDENTURE
WITH RESPECT TO
COMMON STOCK OF
============
Dated as of , 1999
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101 Definitions....................................................1
SECTION 102 Compliance Certificates and Opinions...........................8
SECTION 103 Form of Documents Delivered to Trustee.........................9
SECTION 104 Acts of Holders...............................................10
SECTION 105 Notices, Etc., to Trustee and Company.........................10
SECTION 106 Notice to Holders; Waiver.....................................11
SECTION 107 Conflict with Trust Indenture Act.............................11
SECTION 108 Effect of Headings and Table of Contents......................11
SECTION 109 Successors and Assigns........................................11
SECTION 110 Separability Clause...........................................12
SECTION 111 Benefits of Indenture.........................................12
SECTION 112 Governing Law.................................................12
SECTION 113 Legal Holidays................................................12
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally...............................................12
SECTION 202 Definitive Securities.........................................13
SECTION 203 Form of Trustee's Certificate of Authentication...............13
SECTION 204 Securities in Global Form.....................................13
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued...........................................14
SECTION 302 Execution, Authentication, Delivery and Dating................14
SECTION 303 Global Securities; Temporary Securities.......................15
SECTION 304 Registration, Registration of Transfer and Exchange...........17
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities..............18
SECTION 306 Persons Deemed Owners.........................................19
SECTION 307 Cancellation..................................................19
SECTION 308 Yield Enhancement Payments....................................19
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.......................21
i
<PAGE> 3
SECTION 402 Maturity......................................................22
SECTION 403 Dilution Adjustments..........................................22
SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization
Event.........................................................26
SECTION 405 Adjustments of Exchange Rate..................................27
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events...........................................27
SECTION 502 Acceleration of Maturity......................................28
SECTION 503 Taxes.........................................................29
SECTION 504 Treatment of Forward Contract.................................29
SECTION 505 Notices.......................................................29
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by
Trustee ......................................................29
SECTION 507 Trustee May Enforce Claims Without Possession of Securities...30
SECTION 508 Application of Money Collected................................30
SECTION 509 Limitation on Suits...........................................31
SECTION 510 Restoration of Rights and Remedies............................31
SECTION 511 Rights and Remedies Cumulative................................31
SECTION 512 Delay or Omission Not Waiver..................................32
SECTION 513 Control by Holders............................................32
SECTION 514 Waiver of Past Defaults.......................................32
SECTION 515 Waiver of Stay or Extension Laws..............................33
SECTION 516 Filing Proofs of Claim........................................33
SECTION 517 Unconditional Right of Holders to Receive Payments............34
SECTION 518 Restoration of Rights and Remedies............................34
SECTION 519 Undertaking for Costs.........................................34
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.....................................34
SECTION 602 Certain Duties and Responsibilities of Trustee................36
SECTION 603 Not Responsible for Recitals or Issuance of Securities........37
SECTION 604 May Hold Securities...........................................37
SECTION 605 Money Held in Trust...........................................37
SECTION 606 Compensation and Reimbursement................................37
SECTION 607 Corporate Trustee Required; Eligibility.......................38
SECTION 608 Resignation and Removal; Appointment of Successor.............38
SECTION 609 Acceptance of Appointment by Successor........................40
SECTION 610 Merger, Conversion, Consolidation or Succession to Business...41
SECTION 611 Disclosure of Names and Addresses of Holders..................41
SECTION 612 Reports by Trustee............................................41
ii
<PAGE> 4
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.................................41
SECTION 702 Successor Corporation Substituted.............................42
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures without Consent of Holders............42
SECTION 802 Supplemental Indentures with Consent of Holders...............43
SECTION 803 Execution of Supplemental Indentures..........................44
SECTION 804 Effect of Supplemental Indentures.............................44
SECTION 805 Conformity with Trust Indenture Act...........................44
SECTION 806 Reference in Securities to Supplemental Indentures............45
ARTICLE IX
COVENANTS
SECTION 901 Payment.......................................................45
SECTION 902 Maintenance of Office or Agency...............................45
SECTION 903 Money for Securities Payments to Be Held in Trust.............45
SECTION 904 Limitation on Liens...........................................47
SECTION 905 Waiver of Certain Covenants...................................47
SECTION 906 Officers' Certificate as to Default...........................47
SECTION 907 Payment of Expenses...........................................47
EXHIBIT A-1................................................................A-1
iii
<PAGE> 5
Salomon Smith Barney Holdings Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of
Trust Indenture
Act Section Indenture Section
ss. 310 (a)(1)............................................. 607
(a)(2)............................................. 607
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(a)(5)............................................. 607
(b)................................................ 608
(c)................................................ Not Applicable
ss. 311 (c)................................................ Not Applicable
ss. 312 (a)................................................ 611
(b)................................................ 611
(c)................................................ 611
ss. 313 (a)................................................ 612
(c)................................................ 612
ss. 314 (c)................................................ 102
(d)................................................ Not Applicable
(e)................................................ 102
ss. 315 (a)................................................ 601, 602(a)
(c)................................................ 602(b)
(d)................................................ 601, 602(c)
(e)................................................ 519
ss. 316 (a)(1)(A).......................................... 513
(a)(1)(B).......................................... 514
(a)(2)............................................. Not Applicable
(b)................................................ 517
ss. 317 (a)(1)............................................. 506
(a)(2)............................................. 516
(b)................................................ 903
ss. 318 (a)................................................ 107
- ----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of , 1999, between SALOMON SMITH BARNEY
HOLDINGS INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company") with principal executive offices
at 388 Greenwich Street, New York, New York 10013, and THE CHASE MANHATTAN BANK,
a New York banking corporation (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of certain securities (the "Securities")
representing interests in a forward contract relating to the Common Stock of
and having the terms set forth in this Indenture (the "Forward
Contract"), which will be purchased by TARGETS Trust VI, a business trust
established under the laws of the State of Delaware (the "Trust"). This
Indenture is subject to the provisions of the Trust Indenture Act (as
hereinafter defined) that are required to be part of this Indenture and, to the
extent applicable, shall be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States; and, except as otherwise herein or in any
indenture supplemental hereto expressly provided, the term "generally
accepted accounting principles" with
<PAGE> 7
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Accelerated Maturity Date" has the meaning specified in Section
502.
"Accelerated Maturity Payment" has the meaning specified in Section
502.
"Acceleration Event" has the meaning specified in Section 501.
"Act," when used with respect to any Holder, has the meaning
specified in Section 103.
"Affiliate" of any specified Person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" has the meaning specified in Section 204.
"Appreciation Cap" has the meaning specified in Section 402.
"Authorized Newspaper" means a newspaper of general circulation in
the place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required hereunder,
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Board of Directors" means either the Board of Directors of the
Company, or the Executive Committee or any other duly authorized committee of
that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part of the
Securities, issued to the Depositary of Securities in accordance with Section
303, and bearing the legend prescribed in Section 303.
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed;
provided that, when used
2
<PAGE> 8
with respect to any Place of Payment, "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to the Securities.
"Closing Price" of the Common Stock or any marketable security on
any date of determination means the daily closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security as
reported on the New York Stock Exchange ("NYSE") or which is quoted on a
national securities market on such date of determination or, if such security is
not traded on NYSE or quoted on a national securities market on any such date,
as reported in the composite transactions for the principal United States
securities exchange on which if such security is so listed, or if such security
is not so listed on a United States national or regional securities exchange,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock of the Designated Issuer.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board or a
Vice-Chairman, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Treasurer, the Deputy Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date of initial execution of this Indenture is 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" per share of Common Stock as of a particular
date means the average of the Closing Prices of a share of Common Stock on each
of the 10 Trading Days immediately prior to but not including that particular
date.
3
<PAGE> 9
"Defaulted Yield Enhancement Payments" has the meaning specified in
Section 308.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, including Book-Entry Securities, the
Person designated as Depositary by the Company until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person
"Depositary" shall be a collective reference to such Persons.
"Designated Issuer" means , a corporation, together with any
successor entity in a merger, consolidation or amalgamation.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 403 (a), (b), (c) or (d).
"Dollar" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"Excess Purchase Payment" has the meaning providing in Section
403(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" has the meaning provided in Section 402.
"Forward Contract" has the meaning specified in the first recital of
this Indenture.
"Global Security" has the meaning specified in Section 204.
"Holder" means, with respect to a Security, the person in whose name
such Security is registered in the Security Register.
"Indenture" means this instrument originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"majority" of the Outstanding Securities means, except as otherwise
provided by the Trust Indenture Act, Outstanding Securities representing an
aggregate of more than 50% of all outstanding interests in the Forward Contract.
"Marketable Securities" has the meaning specified in Section 404.
"Maturity," when used with respect to the Forward Contract, means
the date on which the Maturity Payment or Accelerated Maturity Payment becomes
due and payable as the case may be and as therein or herein provided, whether on
the Maturity Date or an Accelerated Maturity Date.
4
<PAGE> 10
"Maturity Date" means .
"Maturity Payment" has the meaning specified in Section 402.
"New York Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York are permitted or
required by any applicable law to close.
"Officers' Certificate" means a written certificate containing the
information specified in Section 102 signed by the Chairman or a Vice Chairman
of the Board, a Vice President, the Chief Financial Officer or the Chief
Accounting Officer and by the Controller, the Treasurer, the Deputy Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
which certificate complies with the applicable requirements of Section 314(e) of
the Trust Indenture Act, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to any Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; and
(iii) Securities that have been paid pursuant to Sections 402
or 502 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holder of the requisite
amount or percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting for quorum purposes, and for the purpose of making the calculations
required by Section 316 of the Trust Indenture Act, any Securities owned by the
Company or any other obligor upon such Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Any Securities so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the
5
<PAGE> 11
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor. In determining whether the
requisite percentage of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, such percentage
refers to Outstanding Securities representing an aggregate interest in the
Forward Contract equaling at least such percentage.
"Paying Agent" means any Person authorized by the Company to pay
amounts owed on Securities on behalf of the Company.
"Payment Date" means , , and of each year, or, in the case of
Defaulted Yield Enhancement Payments, if any, the date established for payment
pursuant to Section 308.
"Permitted Dividend" has the meaning specified in Section 403(d).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities, means
the place or places where any amounts owed in respect of the Securities are
payable.
"Record Date" means, with respect to any Payment Date, either (i)
the day that is one Business Day prior to such Payment Date so long as the
Securities are in book-entry only form, or (ii) if the Securities are not in
book-entry only form, the day that is 15 days prior to such Payment Date.
"Reorganization Event" has the meaning specified in Section 404.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust officer, any
trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and, in any
case, that has direct responsibility for the administration of this Indenture
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means Salomon Smith Barney Inc. and any
Subsidiary which owns or may hereafter own, directly or indirectly, any of the
voting stock of, or succeeds to any substantial part of the business now
conducted by, Salomon Smith Barney Inc. For the purposes of this definition and
the definition of "Subsidiary", "voting stock" means stock having
6
<PAGE> 12
voting power for the election of directors, whether at all times or only for so
long as no senior class of stock has such voting power by reason of any
contingency.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 304.
"Special Record Date" means, for the payment of any Defaulted Yield
Enhancement Payments, if any, a date fixed by the Trustee pursuant to Section
308.
"Stated Amount" means $ .
"Subsidiary" means a corporation, a majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 403, means the average Closing Price
per share of the Common Stock for the Calculation Period of 10 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 403(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 10 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to the "Closing Price" definition. The
"ex-date" with respect to any dividend, distribution or issuance shall mean the
first date on which the shares of Common Stock trade regular way on their
principal market without the right to receive such dividend, distribution or
issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange,
securities market or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange, securities market or association or over-the-counter market that is
the primary market for the trading of such security.
"Transaction Value" has the meaning specified in Section 404.
"Trust" has the meaning specified in the first recital of this
Indenture.
7
<PAGE> 13
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 805.
"Trust Securities" has the meaning specified in Section 907.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Vice President," when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
"Yield Enhancement Payment" means % per annum of the Stated
Amount, accruing from , 1999, computed on the basis of a 360-day year
of twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month, together with, in the case of any
Defaulted Yield Enhancement Payment, interest thereon in accordance with Section
308.
SECTION 102 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of any such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 907) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
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(4) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
SECTION 103 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Any certificate or opinion delivered by the Company to the Trustee
may evidence a signature by facsimile; provided that the Company shall deliver
to the Trustee such certificate or opinion with an original signature within a
reasonable period of time.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders in person or by an agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of
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deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
SECTION 104 Acts of Holders.
(a) The ownership of Securities shall be proved by the
Security Register, and the Depositary, or its nominee, shall be deemed the owner
of the Global Securities, and owners of beneficial interests in a Global
Security will not be considered the owners of any Securities.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(c) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, by first-class mail, postage prepaid,
to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice to the Holders thereof shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, by first-class mail,
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Security Register, within the time prescribed for
the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of the
Trustee (which shall include, but not be limited to, hand-delivery or overnight
courier) shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
SECTION 107 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the
Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 110 Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112 Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 113 Legal Holidays.
In any case where any Maturity of any Security or any Payment Date
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities) payment at such Maturity
or Payment Date need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made at such Maturity or Payment Date, as the case
may be, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
ARTICLE II
SECURITY FORMS
SECTION 201 Forms Generally.
The Securities shall be in substantially in the form of Exhibit A
hereto with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities are issued in global form as permitted by
Section 303, the form thereof also shall be established as provided in the
preceding sentence.
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SECTION 202 Definitive Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 203 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the form set forth below.
This is one of the Securities designated in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By:__________________________________
Authorized Signatory
SECTION 204 Securities in Global Form.
Except as provided in Section 304 hereof, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of certificated Securities. If Securities are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
or specified number of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate number of Outstanding Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount or changes in the rights of Holders of
Outstanding Securities represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein.
This Section 204 shall apply only to Securities issued in global
form ("Global Securities") and deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 204, authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's written instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, a Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
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prevent the Company, the Trustee, or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security.
ARTICLE III
THE SECURITIES
SECTION 301 Amount to be Issued.
Securities evidencing an aggregate beneficial interest in the
Forward Contract of not more than 100% may be authenticated and delivered under
this Indenture. All Securities shall be substantially identical in form except
for the beneficial interest in the Forward Contract represented thereby.
SECTION 302 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by the
Chairman or a Vice Chairman of the Board, a Vice President, the Chief Financial
Officer or the Chief Accounting Officer, under its corporate seal reproduced
thereon attested by the signature of its Secretary or one of its Assistant
Secretaries or its Treasurer, the Deputy Treasurer or one of its Assistant
Treasurers. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.
The Trustee shall have the right to decline to authenticate and
deliver such Securities if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken or if the Trustee in good faith by
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
If all of the Securities are not to be originally issued at the same
time, then the documents required to be delivered pursuant to this Section 302
must be delivered only once, prior to the authentication and delivery of the
first Security; provided, however, that any
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subsequent request by the Company to the Trustee to authenticate Securities upon
original issuance shall constitute a representation and warranty by the Company
that, as of the date of such request, the statements made in any Opinion of
Counsel delivered pursuant to this Section 302 shall be true and correct as if
made on such date.
If Securities are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order, authenticate and deliver one or more Securities
in global form that (i) shall represent the number of the Outstanding Securities
to be represented by such Global Securities, (ii) shall be registered, if in
registered form, in the name of the Depositary for such Book-Entry Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Unless and until it
is exchanged in whole or in part for Securities in certificated form, this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary" or to such other
effect as the Depositary and the Trustee may agree.
Each Depositary designated for a Book-Entry Security in registered
form must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation. The Trustee shall have no responsibility to
determine if the Depositary is so registered. Each Depositary shall enter into
an agreement with the Trustee governing their respective duties and rights with
regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
The Trustee may appoint an authenticating agent (each, an
"Authentication Agent") to authenticate the Securities. Any Authenticating Agent
may authenticate Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by any
such Authenticating Agent.
SECTION 303 Global Securities; Temporary Securities.
(a) No definitive Security shall be issued in exchange for a
Global Security deposited with the Depositary pursuant to Section 302
representing any Securities unless such transfer complies with Section 304 of
this Indenture and (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Global Security or,
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in the case of a Depositary located in the United States, if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Issuer within 90 days of such
notice or (ii) the Company determines not to have the Securities represented by
a Global Security; provided, however, that the Company may not make such
determination during any period during which the Securities must be held in
global form as may be required by the Securities Act.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 303 shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate number of Securities.
Any portion of a Global Security transferred pursuant to this Section 303 shall
be executed, authenticated and delivered as specified in Section 304 and
registered in such names as the Depositary shall direct.
(c) Subject to the provisions of Section 303(b) above, the
registered holder of a Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a holder is entitled to take under this
Indenture or such Securities.
(d) In the event of the occurrence of any of the events
specified in paragraph (a) of this Section 303 the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which may be in global form, that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. The definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such definitive Securities. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of such temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 902,
without charge to the Holder in a Place of Payment. Upon surrender for
cancellation of any temporary Securities, the Company shall execute, and the
Trustee shall authenticate and deliver, in exchange therefor the same aggregate
number of definitive Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
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SECTION 304 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company maintained pursuant to Section 902 in a Place of
Payment being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency maintained pursuant to Section 902 in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities,
evidencing a like aggregate beneficial interest in the Forward Contract.
At the option of the Holder, Securities (except a Global Security
representing all or a portion of the Securities which may be exchanged in
accordance with Section 303 hereof) may be exchanged for other Securities
evidencing a like aggregate interest in the Forward Contract, upon surrender of
the Securities to be exchanged at such office or agency.
If at any time the Depositary for the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities or if at any time the Depositary for the Securities shall no longer
be eligible under Section 302, the Company shall appoint a successor Depositary
with respect to the Securities.
The Depositary may surrender a Global Security in exchange in whole
or in part for Securities in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge, to each
Person specified by such Depositary a new certificated Security or Securities of
like tenor, in aggregate number equal to and in exchange for such Person's
beneficial interest in the Global Security, and to such Depositary a new Global
Security of like tenor representing an aggregate number of securities equal to
the difference, if any, between the aggregate beneficial interest in the Forward
Contract represented by the surrendered Global Security and the aggregate
beneficial interest in the Forward Contract represented by the certificated
Securities delivered to Holders thereof.
Upon the exchange in full of a Global Security for Securities in
certificated form, such Global Security shall be canceled by the Trustee. Except
as provided in Section 303(a) and (b) hereof, Securities issued in exchange for
a Book-Entry Security pursuant to this Section shall be registered in such names
as the Depositary for such Book-Entry Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall make available such Securities to the Persons in whose names
such Securities are so registered.
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Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
obligation, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange. The
Trustee shall have no liability for any transfers or exchanges of the Securities
in accordance with the provisions of this Indenture being in compliance with the
Securities Act or any other applicable law.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Securities Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 303 or 806 not involving
any transfer.
SECTION 305 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and evidencing a like aggregate beneficial
interest in the Forward Contract.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
a new Security evidencing a like aggregate beneficial interest in the Forward
Contract.
Upon the issuance of any new Security under this Section, the
Company or the Securities Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone,
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and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of any mutilated, destroyed, lost or stolen Securities.
SECTION 306 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment in respect of amounts owed on such
Security and for all other purposes whatsoever, whether or not such payments
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary; provided,
however, that the Depositary, or its nominee, shall be deemed the owner of any
Global Securities registered in its name, and owners of beneficial interests in
a Global Security will not be considered the owners of any Securities for
purposes of this Indenture.
SECTION 307 Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be destroyed by the
Trustee and a certificate evidencing such destruction shall be delivered to the
Company.
SECTION 308 Yield Enhancement Payments.
A pro rata portion (based on the beneficial interest in the Forward
Contract represented by each of the Securities) of the Yield Enhancement
Payment, if any, shall be remitted (a) by the Company to the Paying Agent prior
to 10:00 am on each Payment Date and (b) thereafter by the Paying Agent on each
Payment Date to the Persons in whose name such Securities are registered at the
close of business on the Record Date therefor. At least 5 Business Days prior to
the applicable Record Date, the Company shall notify the Trustee in writing of
the aggregate amount of the Yield Enhancement Payment, if any, to be paid on
each Payment Date.
In the event of acceleration of maturity of the Forward Contract to
an Accelerated Maturity Date occurring after any Record Date and on or prior to
the next succeeding Payment Date, Yield Enhancement Payments, if any, otherwise
payable on such Payment Date shall be payable on the Accelerated Maturity Date,
and such Yield Enhancement Payments (in the amounts determined as provided
above) shall be paid to the Persons in whose name the
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Securities are registered at the close of business on such Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of acceleration of maturity of the Forward Contract to an Accelerated
Maturity Date, Yield Enhancement Payments, if any, that would otherwise be
payable after the Accelerated Maturity Payment with respect to the Forward
Contract shall not be payable.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer making Yield Enhancement Payments
during the period until the Maturity Date or the Accelerated Maturity Date, as
the case may be. Yield Enhancement Payments, if any, which are payable, but are
deferred by the Company and not punctually paid or duly provided for, on any
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Record Date by virtue of having been such Holder, and such Yield Enhancement
Payments, together with, to the extent permitted by applicable law, interest
thereon at the rate of % compounded quarterly for each quarter until such
Yield Enhancement Payments are paid (herein called "Defaulted Yield Enhancement
Payments"), may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Yield Enhancement Payments, if any, to the Persons in whose names the
Securities are registered at the close of business on a Special Record
Date for the payment of such Defaulted Yield Enhancement Payments, if any,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing at least one Business Day prior to the Payment Date on
which Yield Enhancement Payments would otherwise be payable of the
aggregate amount of Defaulted Yield Enhancement Payments, if any, proposed
to be paid on the Securities and the date of the proposed payment.
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Yield Enhancement Payments, if any, which shall be (i) not
more than 15 Business Days and not less than 10 Business Days prior to the
date of the proposed payment or (ii) if the Company proposes to pay such
Defaulted Yield Enhancement Payments as part of the Maturity Payment, the
Record Date with respect to the Maturity Date. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Yield Enhancement Payments, if any, and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities at such Holder's address as it appears in the Security
Register, not less than 10 Business Days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Yield Enhancement
Payments, if any, and the Special Record Date therefor having been so
mailed, such Defaulted Yield Enhancement Payments, if any, shall be paid
to the Person in whose name the Securities are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2),
(2) The Company may make payment of any Defaulted Yield
Enhancement Payments, if any, in any other lawful manner not inconsistent
with the requirements of any stock exchange or national securities market
on which any securities issued by the Trust are listed, and upon such
notice as may be required by such exchange
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or market, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
At the option of the Company, Yield Enhancement Payments, if any,
shall be remitted by the Trustee (i) by mailing a check to the address of the
persons entitled thereto as such address shall appear in the Security Register
or (ii) by wire transfer to an account maintained by the persons entitled
thereto as specified in the applicable Security Register if such person (a)
shall have provided wire instructions to the Paying Agent at least five (5)
Business Days prior to the relevant Record Date and (b) holds an aggregate
Security representing the right to receive, at maturity, at least $5,000,000.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to Yield Enhancement
Payments, if any, accrued and unpaid, and to be accrued, which were carried by
such other Security.
ARTICLE IV
PAYMENT AT MATURITY, ETC.
SECTION 401 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities (except as to any surviving rights of
registration of transfer or exchange of Securities and replacement of lost,
stolen or mutilated Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either
(A) all Securities theretofore authenticated and
delivered have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company
has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge all amounts owed in respect of such Securities not
theretofore delivered to the Trustee for cancellation.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of this
Section, the obligations of the Trustee under the last paragraph of Section 903,
shall survive.
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SECTION 402 Maturity.
Subject to earlier acceleration of maturity in accordance with
Article V hereof, on the Maturity Date the Company shall be obligated to pay to
the Holders, in respect of the Securities held by them, an amount in cash (the
"Maturity Payment") equal to a pro rata portion (based on the beneficial
interest in the Forward Contract represented by such Securities) of the sum of
(A) the product of (i) multiplied by (ii) the Current Market Price of the
Common Stock as of the date one New York Business Day prior to the Maturity Date
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Maturity Date.
The "Exchange Rate" shall be determined in accordance with the
following formula, subject to adjustment as a result of certain events as
provided in Sections 403, 404 and 405: (i) if the Current Market Price of the
Common Stock as of the Maturity Date or the Accelerated Maturity Date, as the
case may be, is less than or equal to $ (the "Appreciation Cap"), then the
Exchange Rate shall be , and (ii) if the Current Market Price of the Common
Stock as of the Maturity Date or the Accelerated Maturity Date, as the case may
be, is greater than the Appreciation Cap, then the Exchange Rate shall be a
fraction (rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th), of which the numerator
is the Appreciation Cap, and of which the denominator is the Current Market
Price of the Common Stock as of the Maturity Date or the Accelerated Maturity
Date, as the case may be.
SECTION 403 Dilution Adjustments.
The Exchange Rate and the Appreciation Cap shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends, Splits Reclassifications. Etc. If the
Designated Issuer shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect
to Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock
into a greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares; or
(iv) issue by reclassification of shares of its Common Stock
any shares of other common stock of the Designated Issuer;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Designated Issuer issued pursuant
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thereto), or the fraction thereof that a holder who held one share of Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Cap shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Designated Issuer
shall, after the date hereof, issue, or declare a record date in respect of an
issuance of, rights or warrants to all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Then-Current Market Price of the Common Stock (other than rights to purchase
Common Stock pursuant to a plan for the reinvestment of dividends or interest),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the time the adjustment
is effected by reason of the issuance of such rights or warrants, plus the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to the time the
adjustment is effected, plus the number of additional shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered for subscription or purchase pursuant to such rights or warrants
would purchase at the Then-Current Market Price of the Common Stock, which shall
be determined by multiplying the total number of shares so offered for
subscription or purchase by the exercise price of such rights or warrants and
dividing the product so obtained by such Then-Current Market Price. To the
extent that, after the expiration of such rights or warrants, the shares of
Common Stock offered thereby shall not have been delivered, the Exchange Rate
shall be further adjusted to equal the Exchange Rate which would have been in
effect had such adjustment for the issuance of such rights or warrants been made
upon the basis of delivery of only the number of shares of Common Stock actually
delivered. The Appreciation Cap shall also be adjusted in the manner described
in paragraph (e).
(c) Distributions of Other Assets. If the Designated Issuer
shall, after the date hereof, declare or pay a dividend or make a distribution
to all holders of Common Stock, in either case, of evidences of its indebtedness
or other non-cash assets (excluding any dividends or distributions referred to
in paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
the numerator of which shall be the Then-Current Market Price per share of the
Common Stock, and the denominator of which shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) as of the time the adjustment is
effected of the portion of the assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of Common Stock. The
Appreciation Cap shall also be adjusted in the manner described in subparagraph
(e). Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which this paragraph (c) would otherwise apply, the
denominator in the fraction referred to above formula is less than $1.00 (or is
a negative number), then the Company may, at its option, elect to have the
adjustment provided by this
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paragraph (c) not be made and in lieu of such adjustment, on the Maturity Date,
the Company shall deliver to the Holders of the Securities an additional amount
of cash equal to the fair market value of such indebtedness, assets, rights or
warrants (determined, as of the date such dividend or distribution is made, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination shall be final) so distributed or
issued.
(d) Cash Dividends; Excess Purchase Payments. If, after the
date hereof, the Designated Issuer declares a record date in respect of a
distribution of cash (other than any Permitted Dividends, any cash distributed
in consideration of fractional shares of Common Stock and any cash distributed
in a Reorganization Event), by dividend or otherwise, to all holders of Common
Stock, or makes an Excess Purchase Payment, then the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Common Stock on such record date,
and the denominator of which shall be such Then-Current Market Price less the
amount of such distribution applicable to one share of Common Stock which would
not be a Permitted Dividend (or in the case of an Excess Purchase Payment, less
the aggregate amount of such Excess Purchase Payment for which adjustment is
being made at such time divided by the number of shares of Common Stock
outstanding on such record date). For purposes of these adjustments, (A)
"Permitted Dividend" means any quarterly cash dividend in respect of Common
Stock, other than a quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the extent that the per
share amount of such dividend results in an annualized dividend yield on the
Common Stock in excess of 10.0% and (B) "Excess Purchase Payment" means the
excess, if any, of (x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company, whose determination shall be final) of all other consideration paid by
the Designated Issuer or any of its subsidiaries with respect to one share of
Common Stock acquired in a tender offer or exchange offer by the Designated
Issuer or any of its subsidiaries, over (y) the Then-Current Market Price of the
Common Stock. The Appreciation Cap shall also be adjusted in the manner
described in subparagraph (e). Notwithstanding the foregoing, in the event that,
with respect to any dividend or distribution to which this paragraph (d) would
otherwise apply, the denominator in the fraction referred to above formula is
less than $1.00 (or is a negative number), then the Company may, at its option,
elect to have the adjustment provided by this paragraph (d) not be made and in
lieu of such adjustment, on the Maturity Date, the Company shall deliver to the
Holders of the Securities an additional amount of cash equal to the amount of
cash plus the fair market value of such other consideration (determined, as of
the date such dividend or distribution is made, by a nationally recognized
independent investment banking firm retained for this purpose by the Company,
whose determination shall be final) so distributed (or applied to the
acquisition of the Common Stock in such a tender offer or exchange offer).
(e) Adjustments to Appreciation Cap and Closing Prices. (i) If
any adjustment is made to the Exchange Rate pursuant to paragraph (a), (b), (c)
or (d) this Section 403, an adjustment shall also be made to the Appreciation
Cap. The required adjustment shall be made by dividing the Appreciation Cap by
the relevant Dilution Adjustment.
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(ii) If, during any Calculation Period used in calculating the
Current Market Price, the Then-Current Market Price or the Transaction Value,
there shall occur any event requiring an adjustment to be effected pursuant to
this Section 403, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution or issuance, at
the opening of business on the Business Day next following the record date
for determination of holders of Common Stock entitled to receive such
dividend, distribution or issuance or, if the announcement of any such
dividend, distribution, or issuance is after such record date, at the time
such dividend, distribution or issuance shall be announced by the
Designated Issuer;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Designated Issuer shall announce, at or prior to the time it commences the
relevant share repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment on the
date that the holders of the repurchased shares become entitled to payment
in respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
Section 403 shall subsequently be canceled by the Designated Issuer, or such
dividend, distribution, issuance or repurchase shall fail to receive requisite
approvals or shall fail to occur for any other reason, then, upon such
cancellation, failure of approval or failure to occur, the Exchange Rate shall
be further adjusted to the Exchange Rate which would then have been in effect
had adjustment for such event not been made. If a Reorganization Event shall
occur after the occurrence of one or more events requiring an adjustment
pursuant to this Section 403, the Dilution Adjustments previously applied to the
Exchange Rate in respect of such events shall not be rescinded but shall be
applied to the new Exchange Rate provided for under Sections 404 and 405.
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SECTION 404 Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Designated
Issuer, or any surviving entity or subsequent surviving entity of the Designated
Issuer (a "Designated Issuer Successor"), with or into another entity (other
than a merger or consolidation in which the Designated Issuer is the continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property
of the Designated Issuer or another Person), (ii) any sale, transfer, lease or
conveyance to another Person of the property of the Designated Issuer or any
Designated Issuer Successor as an entirety or substantially as an entirety,
(iii) any statutory exchange of securities of the Designated Issuer or any
Designated Issuer Successor with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Designated Issuer or any Designated Issuer Successor (any such event described
in clause (i), (ii), (iii) or (iv), a "Reorganization Event"), the Exchange Rate
shall be adjusted so that, on the Maturity Date, the Holders of the Securities
shall receive cash in an amount equal to the product of the number of Trust
Securities held by such Holder multiplied by (i) if the Transaction Value is
less than or equal to the Appreciation Cap, times the Transaction Value, and
(ii) if the Transaction Value is greater than the Appreciation Cap, times the
Appreciation Cap.
"Transaction Value" means the sum of: (a) for any cash received in
any such Reorganization Event, the amount of cash received per share of Common
Stock; (b) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination shall
be final); and (c) for any Marketable Securities received in any such
Reorganization Event, an amount equal to the average Closing Price per share of
such Marketable Securities for the Calculation Period of 10 Trading Days
immediately prior to the date one New York Business Day prior to the Maturity
Date multiplied by the number of such Marketable Securities received for each
share of Common Stock; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days
such Trading Day shall be disregarded in the calculation of such average Closing
Price (but no additional trading days shall be added to the Calculation Period).
If no Closing Price for the Marketable Securities may be determined for all such
Trading Days, the calculation in the preceding clause (c) shall be based on the
most recently available Closing Price for the Marketable Securities prior to
such 10 Trading Days.
"Marketable Securities" means any perpetual equity securities or
debt securities with a stated maturity after the Maturity Date, in each case
that are listed on a U.S. national securities exchange or reported by the Nasdaq
National Market. The number of shares of any equity securities constituting
Marketable Securities included in the calculation of Transaction Value pursuant
to the preceding clause (c) shall be subject to adjustment if any event that
would, had it occurred with respect to the Common Stock or the Designated
Issuer, have required an adjustment pursuant to Section 403 shall occur with
respect to such Marketable Securities or the
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issuer thereof between the time of the Reorganization Event and the Maturity
Date. Adjustment for such subsequent events shall be as nearly equivalent as
practicable to the adjustments provided for in Section 403.
SECTION 405 Adjustments of Exchange Rate.
The Company shall be responsible for the effectuation and
calculation of any adjustment pursuant this Article IV and shall furnish the
Trustee with notice of any such adjustment. The Trustee shall be under no duty
or obligation to review or determine any calculations, adjustments, dividend
calculations, determination of either the Maturity Payment or Accelerated
Maturity Payment payable hereunder, exchange rate determinations or any other
calculation set forth in this Article IV or in Section 502 hereof.
ARTICLE V
REMEDIES
SECTION 501 Acceleration Events.
"Acceleration Event," wherever used herein, means any one of the
following events:
(a) the entry of a decree or order for relief in respect of
the Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(b) the commencement by the Company of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of its creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any action; or
(c) the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been (a) an amendment to, change in or announced proposed change
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying, or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of an official position) of the governmental
authority or regulatory body making
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such administrative pronouncement or taking such action, or (d) a threatened
challenge asserted in connection with an audit of the Company, any of its
subsidiaries or the Trust, or a threatened challenge asserted in writing against
any other taxpayer that has raised capital through the issuance of securities
that are substantially similar to the Securities or the TARGETS, which amendment
or change is adopted or which proposed change, decision or pronouncement is
announced or which action, clarification or challenge occurs on or after the
date of the Prospectus relating to the original issuance of the TARGETS
(collectively a "Tax Action"), which Tax Action relates to any of the items
described in (i) and (ii) below, and that there is more than an insubstantial
risk that (i) the Trust is, or will be subject to United States federal income
tax with respect to income accrued or received in respect of the Forward
Contract or the Treasury Securities, or (ii) the Trust is, or will be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges; or
(d) the receipt by the Company of an opinion of a nationally
recognized independent counsel experienced in such matters to the effect that as
a result of the occurrence on or after the date hereof of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
SECTION 502 Acceleration of Maturity.
(a) If an Acceleration Event described in Section 501 shall
occur and be continuing, then the Company shall give written notice thereof to
the Trustee, which notice shall include a statement as to the amount of the
Accelerated Maturity Payment. On the Accelerated Maturity Date the Forward
Contract shall be automatically accelerated and the Accelerated Maturity Amount
shall be immediately due and payable. Upon receipt by the Trustee of the
Accelerated Maturity Amount, the Trustee shall remit to the Holders, in respect
of the Securities held by them, an amount in cash (the "Accelerated Maturity
Payment") equal to a pro rata portion (based on the beneficial interest in the
Forward Contract represented by such Securities) of the sum of (A) the product
of (i) multiplied by (ii) the Current Market Price of the Common Stock as of
the date one New York Business Day prior to the Accelerated Maturity Date,
multiplied by (iii) the Exchange Rate and (B) any accrued and unpaid Yield
Enhancement Payments (if any) through the Accelerated Maturity Date.
(b) As used herein, the "Accelerated Maturity Date" means the
date of the occurrence of the event or events constituting such Acceleration
Event.
(c) The Company agrees, and each Holder of Securities, by such
Holder's acceptance thereof, agrees that the Accelerated Maturity Amount is a
reasonable pre-estimate of loss to such Holder and is not a penalty. Such amount
is payable for the loss of bargain and a Holder will not be entitled to recover
additional damage as a consequence of loss resulting from any Acceleration
Event.
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SECTION 503 Taxes.
The Company shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Indenture and the performance of its obligations hereunder.
SECTION 504 Treatment of Forward Contract.
The Company hereby agrees that: (i) it will not treat this
Indenture, any portion of the Securities, or any obligation hereunder (except in
regards to any Yield Enhancement Payments (if any)) as giving rise to any
interest income or other inclusion of ordinary income on the part of the Holders
of the Securities; (ii) it will not treat the delivery of any portion of the
cash to be delivered pursuant to this Indenture (except in regards to any Yield
Enhancement Payments (if any)) as the payment of interest or ordinary income;
(iii) it will treat this Indenture in its entirety as a forward contract for the
delivery of such cash, under the terms of which contract (a) at the time of
issuance of the Securities the Holder deposits irrevocably with the Company a
fixed amount of cash equal to the purchase price of the Securities to assure
the fulfillment of the Holder's purchase obligation described in clause (c)
below, which deposit will unconditionally and irrevocably be applied at Maturity
to satisfy such obligation, (b) until Maturity the Company may be obligated to
pay Yield Enhancement Payments on such deposit as compensation to the Holder for
the Company's use of such cash deposit during the term of the Securities, and
(c) at Maturity such cash deposit unconditionally and irrevocably will be
applied by the Company in full satisfaction of the Holder's obligation under the
forward purchase contract, and the Company will deliver to the Holder the amount
of cash that the Holder is entitled to receive at that time pursuant to the
terms of the Securities; and (iv) it will not take any action (including filing
any tax return or form or taking any position in any tax proceeding) that is
inconsistent with the obligations contained in the foregoing clauses (i) through
(iii). Notwithstanding the preceding sentence, the Company may take any action
or position required by law, provided that the Company delivers to the Trustee
an opinion of counsel, nationally recognized as expert in Federal tax matters,
to the effect that such action or position is required by a statutory change,
Treasury regulation, or applicable court decision published after the date of
this Indenture.
SECTION 505 Notices.
The Company will or will cause to be delivered to the Trustee and to
each Holder:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder, or upon the Company's obtaining knowledge that any of the conditions
or events described in Section 501(a) or (b) shall have occurred with respect to
the Designated Issuer, notice of such occurrence; and
(b) In case at any time prior to the Maturity Date the Company
receives notice, or otherwise obtains knowledge, that any event requiring that
an adjustment be effected pursuant to Sections 403, 404 and 405 hereof shall
have occurred or be pending, then the Company shall promptly cause to be
delivered to the Trustee and each Holder a notice identifying such event and
stating, if known to the Company, the date on which such event is to occur and,
if applicable, the record date relating to such event. The Company shall cause
further notices to be delivered to the Trustee and each Holder if the Company
shall subsequently receive notice, or otherwise obtain knowledge, of any further
or revised information regarding the terms or timing of such event or any record
date relating thereto.
SECTION 506 Collection of Amounts Owed and Suits for Enforcement by Trustee.
The Company covenants that if default is made in the payment of
amounts owed on any Security at Maturity, the Company will, upon demand of the
Trustee, pay to it, for the
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benefit of the Holders of such Securities the whole amount then due and payable
on such Securities and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and shall
at the direction of the Holders of a majority of the Outstanding Securities,
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, prosecute such proceeding to judgment or final decree,
and may and shall, at the direction of the Holders of a majority of the
Outstanding Securities, enforce the same against the Company or any other
obligor upon such Securities, and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or any
other obligor upon such Securities wherever situated.
If an Acceleration Event occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of the Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 507 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expense,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 508 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of the Securities, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
606; and
Second: To the payment of the amounts then due and unpaid on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities.
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Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 509 Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has (i) previously given written notice to the
Trustee of a continuing Acceleration Event with respect to the Forward
Contract and (ii) the Holders of not less than 25% of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Acceleration Event in its own name as
Trustee hereunder;
(2) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(3) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(4) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Securities; it being understood and intended
that no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other of such Holders,
or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of
Holders. For the protection and enforcement of the provisions of this
Section 509, each and every Holder of Securities and the Trustee shall be
entitled to such relief as can be given at law or in equity.
SECTION 510 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 511 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of a mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 305, no right or
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remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 512 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Acceleration Event
shall impair any such right or remedy or constitute a waiver of any such
Acceleration Event or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 513 Control by Holders.
The Holders of a majority of the Outstanding Securities shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed would
be unjustly prejudicial to the Holders of Securities not joining in any
such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 514 Waiver of Past Defaults.
The Holders of not less than a majority of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
default hereunder and its consequences, except a default in the payment of
amounts owed in respect of any Security, or in respect of a covenant or
provision hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Acceleration Event arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture,
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but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 515 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516 Filing Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, competition or
other judicial proceedings, or any voluntary or involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, relative to the
Company or any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the amount owed on such Securities shall then be due and payable as
therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of amounts due on the Securities) shall be entitled and
empowered, any intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amounts owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders of
such Securities allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606 of this Indenture.
Nothing herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt, on behalf of any Holder any plan or
reorganization, arrangement, adjustment
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or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in such
proceeding.
SECTION 517 Unconditional Right of Holders to Receive Payments.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the amounts owed on such Security and to institute suit for
the enforcement of any such payment and interest thereon, and such right shall
not be impaired without the consent of the Holder.
SECTION 518 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 519 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section 519 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% of the Outstanding Securities, or to any suit
instituted by any Holder of a Security for the enforcement of the payment of
amounts owed on such Security on or after the Maturity Date or Accelerated
Maturity Date.
ARTICLE VI
THE TRUSTEE
SECTION 601 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, certification, order, act or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may at any time (i) consult with counsel and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and (ii) seek instructions
concerning the administration of this Indenture from any court of competent
jurisdiction;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have provided to the Trustee reasonable security or indemnity against the
costs, expenses (including attorney's fees and expenses and the expenses of the
Trustee's agents, nominees and custodians) and liabilities which might be
incurred by it in compliance with such request or direction including such
reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(including, without limitations, any instruments or certificates delivered
pursuant to Section 304 hereof), but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it;
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(i) the granting of any right to the Trustee hereunder shall
not be deemed to impose on the Trustee an obligation to exercise such rights,
subject to Section 601(j); and
(j) the Trustee shall not be obligated to take any action or
to exercise any remedy hereunder unless directed to do so by the Holders of a
majority of the Securities then Outstanding and shall have no liability for its
failure to act pending receipt by it of any such direction.
This Section 601 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 602 Certain Duties and Responsibilities of Trustee.
(a) Except upon the occurrence of an Acceleration Event;
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Acceleration Event with respect to the
Securities, of which a Responsible Officer of the Trustee has actual knowledge,
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
Outstanding Securities determined as provided in Section 513,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect
to the Securities; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or indemnity, reasonably satisfactory to it, against such risk
or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 603 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 604 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee
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of an express trust as set forth in a separate fee letter between
the Trustee and the Company);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise of
performance of any of its powers or duties hereunder.
SECTION 607 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be
eligible to act as Trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
SECTION 608 Resignation and Removal; Appointment of Successor.
(a) The Trustee may resign at any time with respect to the
Securities upon giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 609 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.
(b) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of a majority of the Outstanding Securities,
delivered to the Trustee and to the Company.
(c) If at any time:
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(1) the Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(c) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities (it being understood that any such successor Trustee may be appointed
with respect to the Securities and that at any time there shall be only one
Trustee with respect to the Securities) and shall comply with the applicable
requirements of Section 609. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities shall be appointed by Act of the Holders of a majority
of the Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 609,
become the successor Trustee with respect to the Securities and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 609, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities and each appointment of a
successor Trustee with respect to the Securities in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities and the address of its Corporate Trust Office.
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SECTION 609 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under the Trust Indenture Act.
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SECTION 610 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 611 Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders of
Securities in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
SECTION 612 Reports by Trustee.
Within 60 days after April 15 of each year commencing with the first
May 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in Trust
Indenture Act Section 313(c) a brief report dated as of such April 15 if
required by Trust Indenture Act Section 313(a).
ARTICLE VII
CONSOLIDATION, MERGER OR SALE
SECTION 701 Consolidation, Merger or Sale.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto,
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executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of amounts owed on all
Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed,
(2) immediately after giving effect to such transaction,
no Acceleration Event, and no event which, after notice or lapse of
time or both, would become an Acceleration Event, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 702 Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
701, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 801 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company; or
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(3) to add any additional Acceleration Events with
respect to the Forward Contract; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of the Securities in bearer form,
registrable or not registrable, or to provide for an uncertificated
(commonly known as "book-entry") Security on terms satisfactory in
substance to the Trustee; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Security which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 609(b); or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall
not adversely affect the interests of the Holders of Securities in
any material respect.
SECTION 802 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, however, that no
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Maturity of the Forward Contract, or
reduce the Maturity Payment payable on the Maturity Date, or reduce
the Accelerated Maturity Payment that would be due and payable on an
Accelerated Maturity Date pursuant to Section 502, or reduce the
Yield Enhancement Payments, if any, that would be due and payable
pursuant to Section 308, or change the coin or currency in which
amounts owed in respect of the Forward Contract are payable, or
impair the right to institute suit for the enforcement of any such
payment, on or after the Maturity thereof, or reduce the percentage
of the Outstanding Securities, the
43
<PAGE> 49
consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in
this Indenture, or
(2) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 902, or
(3) modify any of the provisions of this Section 802,
Section 515, or Section 905, except to increase any such percentage
in Section 905 to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of Sections 608(b)
and 801(7).
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 803 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel, the
preparation of which shall not be at the expense of the Trustee, stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 804 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 805 Conformity with Trust Indenture Act.
After this Indenture is qualified pursuant to the Trust Indenture
Act, every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
44
<PAGE> 50
SECTION 806 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
any new Securities so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE IX
COVENANTS
SECTION 901 Payment.
The Company covenants and agrees for the benefit of the Holders of
the Securities that it will duly and punctually pay all amounts owed on the
Securities in accordance with the terms of the Securities and this Indenture.
SECTION 902 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for the
Securities an office or agency where the Securities may be presented or
surrendered for payment, where the Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof; such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for the Securities for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 903 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any Securities, it will, on or before each due date of amounts owed
on such Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the amounts
45
<PAGE> 51
owed so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it will, prior to each due date of amounts owed in
respect of the Securities, deposit with any such Paying Agent a sum sufficient
to pay the amounts owed in respect of the Securities so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent of the Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of amounts
owed in respect to the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of
any payment of amounts owed in respect to the Securities; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the amounts owed in respect to
any Security and remaining unclaimed for two years after such amount has become
due and payable shall be paid to the Company on Company Request along with any
interest that has accumulated thereon as a result of such money being invested
at the direction of the Company, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
amounts without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
46
<PAGE> 52
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.
SECTION 904 Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
to, incur, issue, assume guarantee or suffer to exist any indebtedness for
borrowed money (indebtedness for borrowed money being hereinafter in this
section called "debt") if such debt is secured by a pledge of, lien on, or
security interest in any shares of stock of any Restricted Subsidiary, whether
such stock is now owned or shall hereafter be acquired, without effectively
providing that the Securities shall be secured equally and ratably with such
debt.
SECTION 905 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant, set forth herein, if before the time for such compliance, the Holders
of at least a majority of the Outstanding Securities shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant, but no such waiver shall extend to or affect such
covenant except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant shall remain in full force and effect.
SECTION 906 Officers' Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not
more than four months after the end of each fiscal year of the Company (which on
the date hereof is the calendar year) ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observation of any of the
terms, provisions and conditions of this Indenture, and, if the Company shall be
in default, specifying all such defaults and the nature thereof of which they
may have knowledge.
The Company will deliver written notice to the Trustee promptly
after any officer of the Company has knowledge of the occurrence of any event
that with the giving of notice or the lapse of time or both would become an
Acceleration Event under Section 501.
SECTION 907 Payment of Expenses.
(a) In connection with the offering, sale and issuance of the
Securities and in connection with the sale of any securities by the Trust
(collectively, the "Trust Securities"), the Company, in its capacity as issuer
with respect to the Securities, shall:
(i) pay all costs and expenses relating to the offering,
sale and issuance of the Trust Securities, including
commissions and
47
<PAGE> 53
compensation to the underwriters payable pursuant to any
applicable underwriting agreement and compensation of
the Trustee under this Indenture in accordance with the
provisions of Section 606;
(ii) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and
issuance of the Trust Securities of the Trust (including
commissions and compensation to the underwriters in
connection therewith), the fees and expenses of the
Institutional Trustee, the Regular Trustees and the
Delaware Trustee of the Trust, the costs and expenses
relating to the operation, maintenance and dissolution
of the Trust and the enforcement by the Institutional
Trustee of the rights of the holders of the Trust
Securities, including without limitation, costs and
expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of
assets of the Trust);
(iii) be primarily liable for any indemnification obligations
arising with respect to the Declaration of the Trust and
the Amended and Restated Declaration of the Trust; and
(iv) pay any and all taxes (other than United States
withholding taxes in respect of amounts paid on the
Securities held by the Trust) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
(b) Upon termination of this Indenture or the Securities or
the removal or resignation of the Trustee pursuant to Section 608, the Company
shall pay to the Trustee all amounts accrued and owing to the Trustee to the
date of such termination, removal or resignation. Upon termination of the
Amended and Restated Declaration of the Trust or the removal or resignation of
the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant
to Section 5.6 of the Amended and Restated Declaration of the Trust, the Company
shall pay to such Delaware Trustee or such Institutional Trustee, as the case
may be, all amounts accrued and owing to such Delaware Trustee or such
Institutional Trustee, as the case may be, to the date of such termination,
removal or resignation.
48
<PAGE> 54
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SALOMON SMITH BARNEY HOLDINGS INC.
By:
------------------------------------
Name:
Title:
[SEAL]
Attest:
- -----------------------------
THE CHASE MANHATTAN BANK, Trustee
By:
------------------------------------
Name:
Title:
[SEAL]
Attest:
- -----------------------------
49
<PAGE> 55
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this day of , before me personally appeared ,
to be known, who, being by me duly sworn, did depose and say that he is
a of SALOMON SMITH BARNEY HOLDINGS INC., the
corporation described in and which executed the foregoing instrument; that he
knows the seal of the said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the board of
directors of said corporation; and that he signed his name thereto by like
authority.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
______________________________
Notary Public
[Notarial Seal]
50
<PAGE> 56
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , before me personally appeared ,
to me known, who, being by me duly sworn, did depose and say that she is a
of The Chase Manhattan Bank, the New York banking corporation described in and
which executed the forgoing instrument; that she knows the seal of said New York
banking corporation; that the seal affixed to said instrument is such seal; that
it was so affixed by authority of the Board of Directors of said New York
banking corporation, and that she signed her name thereto by like authority.
______________________________
Notary Public
[Notarial Seal]
51
<PAGE> 57
EXHIBIT A
NO. 1
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
SALOMON SMITH BARNEY HOLDINGS INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person), for value received, hereby certifies that The
Chase Manhattan Bank, as Institutional Trustee of TARGETS Trust VI, or
registered assigns, is the owner of a 100% interest in the Forward Contract (as
defined in the Indenture referred to below) and, as such, is entitled to receive
from the Company its pro rata share of (i) the Maturity Payment on , subject to
acceleration to an Accelerated Maturity Date and adjustment to the Accelerated
Maturity Payment pursuant to the terms of the Indenture and (ii) the Yield
Enhancement Payments, if any, on each Payment Date.
Payment of (i) the Maturity Payment or Accelerated Maturity Payment,
as the case may be, and (ii) the Yield Enhancement Payments, if any, with
respect to this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth after the Trustee's certificate of authentication, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
A-1
<PAGE> 58
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SALOMON SMITH BARNEY HOLDINGS INC.
------------------------------------
By:
------------------------------------
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:
------------------------------------
Authorized Signatory
A-2
<PAGE> 59
SALOMON SMITH BARNEY HOLDINGS INC.
Forward Contract
with respect to Common Stock
This Security is one of a duly authorized issue of the Company
(herein called the "Securities"), issued and to be issued under an Indenture
dated as of , 1999 (herein called the "Indenture") between the Company
and The Chase Manhattan Bank (herein called the "Trustee," which term includes
any successor trustee under the Indenture), relating to a Forward Contract with
respect to Common Stock, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities are not subject to redemption at the option of the
Company or at the option of the Holder prior to maturity; however, if certain
Acceleration Events shall have occurred and be continuing, the maturity of the
Securities will be accelerated to the Accelerated Maturity Date pursuant to the
terms of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority of the Securities at the time Outstanding to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages of the Securities at the time Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by a Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay (i) the Maturity Payment or
Accelerated Maturity Payment, as the case may be, and (ii) the Yield Enhancement
Payments, if any, with respect to this Security at the time, place and rate, and
in the coin or currency, prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar and duly executed
by, the Holder hereof or the Holder's attorney duly authorized in writing, and
thereupon one or more new Securities will be issued to the designated transferee
or transferees.
A-3
<PAGE> 60
The Securities are issuable only in registered form. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for one or more new Securities of like tenor and
representing an equal aggregate beneficial interest in the Forward Contract to
be surrendered for exchange. If (a) any Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days or (b) the Company executes and delivers to the
Trustee a Company Order to the effect that the Global Securities shall be
exchangeable for certificated Securities, the Global Securities will be
exchangeable for Securities in definitive certificated form of like tenor. Such
definitive Securities shall be registered in such name or names as the
Depositary shall instruct the Trustee.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
--------------------------
A-4
<PAGE> 61
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[Please Insert Social Security Number or Other Identifying Number of Assignee]
________________________________________________________________________________
[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE:]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The within Security of Salomon Smith Barney Holdings Inc. and does hereby
irrevocably constitute and appoint
________________________________________________________________________________
Attorney to transfer said Security on the books of said Company, with full power
of substitution in the premises.
Dated:__________________________ ________________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the first page of
the within Security in every
particular, without alteration or
enlargement or any change whatever,
and be guaranteed by the endorser's
bank or broker.
A-5
<PAGE> 1
EXHIBIT 5
[Salomon Smith Barney Letterhead]
February 1, 1999
Salomon Smith Barney Holdings Inc.
TARGETS Trust II
TARGETS Trust II
TARGETS Trust IV
TARGETS Trust V
TARGETS Trust VI
c/o Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, New York 10013
Re: Salomon Smith Barney Holdings Inc.
TARGETS Trust II
TARGETS Trust III
TARGETS Trust IV
TARGETS Trust V
TARGETS Trust VI
Registration Statement on Form S-3
Ladies and Gentlemen:
I am General Counsel and Secretary of Salomon Smith Barney Holdings Inc.,
a Delaware corporation (the "Company"). I have acted as counsel to the Company
and to TARGETS Trust II, TARGETS Trust III, TARGETS Trust IV, TARGETS Trust V
and TARGETS Trust VI (each, a "Trust" and, together, the "Trusts"), each a
statutory business trust formed under the laws of the State of Delaware, in
connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company and the Trusts with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"). The Registration Statement relates
to the issuance and sale from time to time, pursuant to Rule 415 under the
Securities Act, of the following securities with an aggregate public offering
price of up to $250,000,000: (i) Targeted Growth Enhanced Terms Securities
("TARGETS") of each Trust, (ii) certain securities (the "Forward Contract
Securities") with respect to each Trust representing interests in a forward
contract (the "Forward Contract") of the Company which are to be issued pursuant
to an indenture (the "Indenture") with respect to each Trust between the Company
and The Chase Manhattan Bank, as indenture trustee, and (iii) a guarantee of the
Company with respect to the TARGETS of each Trust.
The TARGETS of each Trust are to be issued pursuant to the Amended and
Restated Declaration of Trust (the "Declaration") of such Trust among the
Company, as sponsor and as the issuer of the Forward Contract Securities, Chase
Manhattan Bank Delaware, as Delaware
<PAGE> 2
Salomon Smith Barney Holdings Inc. et al.
February 1, 1999
Page 2
trustee, The Chase Manhattan Bank, as institutional trustee (the "Institutional
Trustee"), and Charles W. Scharf and Michael J. Day, as regular trustees
(together, the "Regular Trustees").
This opinion is being delivered in accordance with Item 601(b)(5) of
Regulation S-K under the Securities Act.
In connection with this opinion, I, or persons employed by the Company or
its affiliates with whom I have consulted, have examined or are familiar with
(i) the Registration Statement, (ii) the form of Prospectus relating to the
TARGETS included in the Registration Statement (the "Prospectus"), (iii) the
certificate of Trust of each Trust filed with the Secretary of State of the
State of Delaware on January 28, 1999, (iv) the form of the Declaration of each
Trust (including the designation of terms of the TARGETS of each Trust annexed
thereto), (v) the form of the certificates evidencing the TARGETS of each Trust,
(vi) the form of the Targeted Growth Enhanced Terms Securities Guarantee
Agreement (the "Guarantee Agreement") with respect to each Trust between the
Company and The Chase Manhattan Bank, as guarantee trustee, (vii) the form of
the certificates evidencing the Forward Contract Securities with respect to each
Trust, (viii) the form of the Indenture with respect to each Trust, (ix) the
Amended and Restated Certificate of Incorporation of the Company, as amended to
date, (x) the By-Laws of the Company currently in effect, and (xi) certain
resolutions adopted by the Board of Directors of the Company (the "Board of
Directors").
I or such persons have also examined or are familiar with originals, or
copies certified or otherwise identified to my satisfaction, of such other
documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as I or
such persons have deemed necessary or advisable for the purposes of this
opinion. In my examination, I (or such persons) have assumed the legal capacity
of all natural persons, the genuineness of all signatures, the authenticity of
all documents submitted to me (or such persons) as originals, the conformity to
original documents of all documents submitted to me (or such persons) as
certified or photostatic copies and the authenticity of the originals of such
copies.
Upon the basis of the foregoing, I am of the opinion that:
1. With respect to the TARGETS of each Trust, when (i) the Registration
Statement, as amended, has become effective under the Securities Act, (ii) the
Prospectus with respect to such TARGETS has been delivered and filed in
compliance with the Securities Act and the applicable rules and regulations
thereunder, (iii) the Declaration of such Trust and an underwriting agreement
(the "Underwriting Agreement") with respect to such TARGETS are duly executed
and delivered by the parties thereto, (iv) the Declaration of such Trust has
been qualified under the Trust Indenture Act of 1939, as amended (the "TIA"),
(v) the terms of such TARGETS have been established in accordance with the
Declaration of such Trust and (vi) such TARGETS have been executed and issued in
accordance with the Declaration of such Trust and delivered and paid for in
accordance with the Underwriting Agreement, (1) such TARGETS will be duly
authorized, validly issued and fully paid and nonassessable, representing
undivided beneficial
2
<PAGE> 3
Salomon Smith Barney Holdings Inc. et al.
February 1, 1999
Page 3
interests in the assets of such Trust, and (2) the holders of such TARGETS will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We bring to your attention, however,
that the holders of such TARGETS may be obligated, pursuant to the Declaration
of such Trust, to (i) provide indemnity and/or security in connection with and
pay taxes or governmental charges arising from transfers of TARGETS and (ii)
provide security and indemnity in connection with the requests of or directions
to the Institutional Trustee to exercise its rights and powers under the
Declaration of such Trust.
2. With respect to the Guarantee Agreement for the TARGETS of each Trust,
when (i) the Registration Statement, as amended, has become effective under the
Securities Act, (ii) the Prospectus with respect to such Trust has been
delivered and filed in compliance with the Securities Act and the applicable
rules and regulations thereunder, (iii) the Board of Directors, including any
appropriate committee appointed thereby, and appropriate officers of the Company
have taken all necessary corporate action to approve the execution and delivery
of such Guarantee Agreement, (iv) the Declaration, the Guarantee Agreement and
the Underwriting Agreement with respect to such Trust are duly executed and
delivered by the parties thereto, (v) the Declaration and the Guarantee with
respect to such Trust have been qualified under the TIA, (vi) the terms of such
TARGETS have been established in accordance with the Declaration of such Trust
and (vii) such TARGETS have been executed and issued in accordance with the
Declaration of such Trust and delivered and paid for in accordance with the
Underwriting Agreement for such TARGETS, the Guarantee Agreement will be a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms (subject, as to enforcement, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally and to general principles of equity regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3. With respect to the Forward Contract Securities for each Trust, when
(i) the Registration Statement, as amended, has become effective under the
Securities Act, (ii) the Prospectus with respect to such Trust has been
delivered and filed in compliance with the Securities Act and the applicable
rules and regulations thereunder, (iii) the Board of Directors, including any
appropriate committee appointed thereby, and appropriate officers of the Company
have taken all necessary corporate action to approve the issuance and terms of
such Forward Contract Securities, (iv) the Indenture with respect to such Trust
has been duly executed and delivered by the parties thereto, (v) the Indenture
with respect to such Trust has been qualified under the TIA, (vi) the terms of
such Forward Contract Securities have been established in accordance with the
Indenture with respect to such Trust, (vii) such Forward Contract Securities
have been duly executed and issued in accordance with the Indenture with respect
to such Trust and paid for as set forth in the Prospectus with respect to such
Trust, such Forward Contract Securities will be valid and binding obligations of
the Company, entitled to the benefits of such Indenture and enforceable against
the Company in accordance with their terms (subject, as to enforcement, to
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
3
<PAGE> 4
Salomon Smith Barney Holdings Inc. et al.
February 1, 1999
Page 4
laws affecting creditors' rights generally and to general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law).
This opinion is limited to matters governed by the federal laws of the
United States of America, the laws of the State of New York, the General
Corporation Law of the State of Delaware and the Delaware Business Trust Act. I
am not admitted to the practice of law in the State of Delaware.
I hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to my name under the
heading "Legal Matters" in the prospectus which forms a part of the Registration
Statement. In giving this consent, I do not thereby admit that I am within the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations thereunder.
Very truly yours,
/s/ Joan Guggenheimer
-----------------------------
Joan Guggenheimer
General Counsel and Secretary
4
<PAGE> 1
EXHIBIT 8
Writer's Direct Dial: (212) 225-2250
February 1, 1999
Salomon Smith Barney Holdings Inc.
TARGETS Trust II, TARGETS Trust III,
TARGETS Trust IV, TARGETS Trust V
and TARGETS Trust VI
c/o Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
We have acted as special tax counsel to Salomon Smith Barney Holdings
Inc., a Delaware corporation (the "Company"), and TARGETS Trust II, TARGETS
Trust III, TARGETS Trust IV, TARGETS Trust V and TARGETS Trust VI (each, a
"Trust" and together, the "Trusts"), each a statutory business trust formed
under the laws of the State of Delaware in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission"), for the purpose
of registering Targeted Growth Enhanced Terms Securities ("TARGETS") of each
Trust representing undivided beneficial interests in the assets of each Trust.
We hereby confirm that we are of the opinion that the statements set forth
under the heading "Certain Federal Income Tax Considerations" in the Prospectus
contained in the Registration Statement (the "Prospectus"), insofar as such
statements purport to summarize certain federal income tax laws of the United
States, constitute a fair summary of the principal U.S. federal income tax
consequences of an investment in the TARGETS.
We hereby consent to the use of our name under the heading "Legal Matters"
in the Prospectus and the filing of this opinion with the Commission as Exhibit
8 to the Registration Statement. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or
<PAGE> 2
Salomon Smith Barney Holdings Inc. et al.
TARGETS TRUST I, II, et al.
February 1, 1999, p. 2
the rules and regulations of the Commission promulgated thereunder. This opinion
is expressed as of the date hereof unless otherwise expressly stated and applies
only to the disclosure under the heading "Certain Federal Income Tax
Considerations" set forth in the Prospectus. We disclaim any undertaking to
advise you of any subsequent changes of the facts stated or assumed herein or
any subsequent changes in applicable law.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ Leslie B. Samuels
---------------------------------
Leslie B. Samuels, a Partner
<PAGE> 1
[PRICEWATERHOUSECOOPERS LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated January 26, 1998, on our audits of the
consolidated financial statements and financial statement schedules of Salomon
Smith Barney Holdings Inc. and subsidiaries. We also consent to the reference to
our firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
New York, New York
February 1, 1999
<PAGE> 1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Salomon Smith Barney Holdings, Inc.
As independent public accountants, we hereby consent to the incorporation by
reference in the Form S-3 Registration Statement of Salomon Smith Barney
Holdings Inc., TARGETS Trust II, TARGETS Trust III, TARGETS Trust IV, TARGETS
Trust V, and TARGETS Trust VI (the "Registration Statement"), of our report
dated March 13, 1997, relating to the consolidated statement of financial
condition of Salomon Inc. and subsidiaries as of December 31, 1996 and 1995, and
the related consolidated statements of income, changes in stockholders' equity
and cash flows for each of the three years in the period ended December 31,
1996, which report is incorporated by reference or included in the annual report
on Form 10-K of Salomon Smith Barney Holdings Inc. for the year ended December
31, 1997.
/s/ Arthur Andersen LLP
New York, New York
February 1, 1999
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
TARGETS TRUST II
(Exact name of obligor as specified in its charter)
DELAWARE [TO BE APPLIED FOR]
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
TARGETED GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST II
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State Plaza,
Albany, New York 12223. Board of Governors of the Federal Reserve
System 20th and C Street NW, Washington, D.C., 20551 Federal Reserve
Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y.
10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street NW
Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
---------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................ $ 11,951
Interest-bearing balances ......................................... 4,551
Securities:
Held to maturity securities ............................................ 1,740
Available for sale securities .......................................... 48,537
Federal funds sold and securities purchased under
agreements to resell .............................................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve 0
--------
Loans and leases, net of unearned income, allowance, and reserve .. 124,660
Trading Assets ......................................................... 51,549
Premises and fixed assets (including capitalized
leases) ........................................................... 3,009
Other real estate owned................................................. 272
Investments in unconsolidated subsidiaries and
associated companies .............................................. 300
Customers' liability to this bank on acceptances
outstanding ....................................................... 1,329
Intangible assets ...................................................... 1,429
Other assets ........................................................... 13,563
--------
TOTAL ASSETS ........................................................... $292,620
========
</TABLE>
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices .................................................... $ 98,760
Noninterest-bearing .............................. $ 39,071
Interest-bearing ................................. 59,689
---------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ......... 75,403
Noninterest-bearing .................................................... $ 3,877
Interest-bearing ................................. 71,526
Federal funds purchased and securities sold under agreements
to repurchase ............................................................... 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year through three years .... 213
With a remaining maturity of more than three years ..................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses)
on available-for-sale securities ............................................ 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
TARGETS TRUST III
(Exact name of obligor as specified in its charter)
DELAWARE [TO BE APPLIED FOR]
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
TARGETED GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST III
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State Plaza,
Albany, New York 12223. Board of Governors of the Federal Reserve
System 20th and C Street NW, Washington, D.C., 20551 Federal Reserve
Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y.
10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street NW
Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
---------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................ $ 11,951
Interest-bearing balances ......................................... 4,551
Securities:
Held to maturity securities ............................................ 1,740
Available for sale securities .......................................... 48,537
Federal funds sold and securities purchased under
agreements to resell .............................................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve 0
--------
Loans and leases, net of unearned income, allowance, and reserve .. 124,660
Trading Assets ......................................................... 51,549
Premises and fixed assets (including capitalized
leases) ........................................................... 3,009
Other real estate owned ................................................ 272
Investments in unconsolidated subsidiaries and
associated companies .............................................. 300
Customers' liability to this bank on acceptances
outstanding ....................................................... 1,329
Intangible assets ...................................................... 1,429
Other assets ........................................................... 13,563
--------
TOTAL ASSETS ........................................................... $292,620
========
</TABLE>
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices .................................................... $ 98,760
Noninterest-bearing .............................. $ 39,071
Interest-bearing ................................. 59,689
----------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ......... 75,403
Noninterest-bearing .................................................... $ 3,877
Interest-bearing ................................. 71,526
Federal funds purchased and securities sold under agreements
to repurchase ............................................................. 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year
through three years ............................................. 213
With a remaining maturity of more than three years ..................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses) on available-for-sale securities ...... 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
TARGETS TRUST IV
(Exact name of obligor as specified in its charter)
DELAWARE [TO BE APPLIED FOR]
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
TARGETED GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST IV
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State Plaza,
Albany, New York 12223. Board of Governors of the Federal Reserve
System 20th and C Street NW, Washington, D.C., 20551 Federal Reserve
Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y.
10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street NW
Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
--------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................ $ 11,951
Interest-bearing balances ......................................... 4,551
Securities:
Held to maturity securities ............................................ 1,740
Available for sale securities .......................................... 48,537
Federal funds sold and securities purchased under
agreements to resell .............................................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve 0
--------
Loans and leases, net of unearned income, allowance, and reserve .. 124,660
Trading Assets ......................................................... 51,549
Premises and fixed assets (including capitalized
leases) ........................................................... 3,009
Other real estate owned ................................................ 272
Investments in unconsolidated subsidiaries and
associated companies .............................................. 300
Customers' liability to this bank on acceptances
outstanding ....................................................... 1,329
Intangible assets ...................................................... 1,429
Other assets ........................................................... 13,563
--------
TOTAL ASSETS ........................................................... $292,620
========
</TABLE>
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices .................................................... $ 98,760
Noninterest-bearing .............................. $ 39,071
Interest-bearing ................................. 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ......... 75,403
Noninterest-bearing .................................................... $ 3,877
Interest-bearing ................................. 71,526
Federal funds purchased and securities sold under agreements
to repurchase ............................................................... 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year
through three years ............................................. 213
With a remaining maturity of more than three years ................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses) on available-for-sale securities ...... 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
TARGETS TRUST V
(Exact name of obligor as specified in its charter)
DELAWARE [TO BE APPLIED FOR]
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
TARGETED GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST V
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
-------------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................................. $ 11,951
Interest-bearing balances .......................................................... 4,551
Securities:
Held to maturity securities ............................................................. 1,740
Available for sale securities ........................................................... 48,537
Federal funds sold and securities purchased under agreements to resell .................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income ....................... $127,379
Less: Allowance for loan and lease losses ...................... 2,719
Less: Allocated transfer risk reserve .......................... 0
--------
Loans and leases, net of unearned income, allowance, and reserve ................... 124,660
Trading Assets .......................................................................... 51,549
Premises and fixed assets (including capitalized
leases) ............................................................................ 3,009
Other real estate owned ................................................................. 272
Investments in unconsolidated subsidiaries and
associated companies ............................................................... 300
Customers' liability to this bank on acceptances
outstanding ........................................................................ 1,329
Intangible assets ....................................................................... 1,429
Other assets ............................................................................ 13,563
--------
TOTAL ASSETS ............................................................................ $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ............................................ $ 39,071
Interest-bearing ............................................... 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's . 75,403
Noninterest-bearing ............................................ $ 3,877
Interest-bearing ............................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .............. 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Otherborrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year .....................................
through three years ......................................................... 213
With a remaining maturity of more than three years ............................... 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses) on available-for-sale securities .................. 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
TARGETS TRUST VI
(Exact name of obligor as specified in its charter)
DELAWARE [TO BE APPLIED FOR]
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
TARGETED GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST VI
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
-------------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................................. $ 11,951
Interest-bearing balances .......................................................... 4,551
Securities:
Held to maturity securities ............................................................. 1,740
Available for sale securities ........................................................... 48,537
Federal funds sold and securities purchased under agreements to resell .................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income ...................... $127,379
Less: Allowance for loan and lease losses ..................... 2,719
Less: Allocated transfer risk reserve ......................... 0
--------
Loans and leases, net of unearned income, allowance, and reserve ................... 124,660
Trading Assets .......................................................................... 51,549
Premises and fixed assets (including capitalized
leases) ............................................................................ 3,009
Other real estate owned ................................................................. 272
Investments in unconsolidated subsidiaries and
associated companies ............................................................... 300
Customers' liability to this bank on acceptances
outstanding ........................................................................ 1,329
Intangible assets ....................................................................... 1,429
Other assets ............................................................................ 13,563
--------
TOTAL ASSETS ............................................................................ $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ............................................. $ 39,071
Interest-bearing ................................................ 59,689
In foreign offices, Edge and Agreement, subsidiaries and IBF's .. 75,403
--------
Noninterest-bearing ................................................................ $ 3,877
Interest-bearing .............................................. 71,526
Federal funds purchased and securities sold under agreements to repurchase .............. 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year .....................................
through three years ......................................................... 213
With a remaining maturity of more than three years ............................... 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses) on available-for-sale securities .................. 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
GUARANTEE OF SALOMON SMITH BARNEY HOLDINGS INC. WITH RESPECT TO THE TARGETED
GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST II
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System
20th and C Street NW, Washington, D.C., 20551 Federal Reserve Bank of New York,
District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit
Insurance Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
-------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30,
1998, in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................... $ 11,951
Interest-bearing balances ........................................... 4,551
Securities:
Held to maturity securities .............................................. 1,740
Available for sale securities ............................................ 48,537
Federal funds sold and securities purchased under
agreements to resell ................................................ 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .............................................. 124,660
Trading Assets ........................................................... 51,549
Premises and fixed assets (including capitalized
leases) ............................................................. 3,009
Other real estate owned .................................................. 272
Investments in unconsolidated subsidiaries and
associated companies ................................................ 300
Customers' liability to this bank on acceptances
outstanding ......................................................... 1,329
Intangible assets ........................................................ 1,429
Other assets ............................................................. 13,563
--------
TOTAL ASSETS ............................................................. $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................... $98,760
Noninterest-bearing ................................$ 39,071
Interest-bearing ................................... 59,689
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ................................................. 75,403
Noninterest-bearing ................................$ 3,877
Interest-bearing ................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .. 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year through three years .... 213
With a remaining maturity of more than three years ..................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses)
on available-for-sale securities ............................................ 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
GUARANTEE OF SALOMON SMITH BARNEY HOLDINGS INC. WITH RESPECT TO THE TARGETED
GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST III
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System
20th and C Street NW, Washington, D.C., 20551 Federal Reserve Bank of New York,
District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit
Insurance Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
---------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................. $ 11,951
Interest-bearing balances ........................................... 4,551
Securities:
Held to maturity securities .............................................. 1,740
Available for sale securities ............................................ 48,537
Federal funds sold and securities purchased under agreements to resell ... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ... 0
--------
Loans and leases, net of unearned income, allowance, and reserve .... 124,660
Trading Assets ........................................................... 51,549
Premises and fixed assets (including capitalized leases) ................. 3,009
Other real estate owned .................................................. 272
Investments in unconsolidated subsidiaries and associated companies ...... 300
Customers' liability to this bank on acceptances outstanding ............. 1,329
Intangible assets ........................................................ 1,429
Other assets ............................................................. 13,563
--------
TOTAL ASSETS ............................................................. $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................... $98,760
Noninterest-bearing .................................................... $39,071
Interest-bearing ....................................................... 59,689
In foreign offices, Edge and Agreement, subsidiaries and IBF's ......... 75,403
Noninterest-bearing ................................................... $ 3,877
Interest-bearing ........................................................ 71,526
Federal funds purchased and securities sold under agreements to repurchase .. 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year through three years .... 213
With a remaining maturity of more than three years ..................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses) on available-for-sale securities ...... 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
GUARANTEE OF SALOMON SMITH BARNEY HOLDINGS INC. WITH RESPECT TO THE TARGETED
GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST IV
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System
20th and C Street NW, Washington, D.C., 20551 Federal Reserve Bank of New York,
District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit
Insurance Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................... $ 11,951
Interest-bearing balances ........................................... 4,551
Securities:
Held to maturity securities .............................................. 1,740
Available for sale securities ............................................ 48,537
Federal funds sold and securities purchased under
agreements to resell ................................................ 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .............................................. 124,660
Trading Assets ........................................................... 51,549
Premises and fixed assets (including capitalized
leases) ............................................................. 3,009
Other real estate owned .................................................. 272
Investments in unconsolidated subsidiaries and
associated companies ................................................ 300
Customers' liability to this bank on acceptances
outstanding ......................................................... 1,329
Intangible assets ........................................................ 1,429
Other assets ............................................................. 13,563
--------
TOTAL ASSETS ............................................................. $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................... $98,760
Noninterest-bearing ................................$ 39,071
Interest-bearing ................................... 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ......... 75,403
Noninterest-bearing ................................$ 3,877
Interest-bearing ................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .. 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year through three years .... 213
With a remaining maturity of more than three years ................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses) on available-for-sale securities ...... 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
GUARANTEE OF SALOMON SMITH BARNEY HOLDINGS INC. WITH RESPECT TO THE TARGETED
GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST V
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System
20th and C Street NW, Washington, D.C., 20551 Federal Reserve Bank of New York,
District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit
Insurance Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
--------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................... $ 11,951
Interest-bearing balances ........................................... 4,551
Securities:
Held to maturity securities .............................................. 1,740
Available for sale securities ............................................ 48,537
Federal funds sold and securities purchased under
agreements to resell ................................................ 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .............................................. 124,660
Trading Assets ........................................................... 51,549
Premises and fixed assets (including capitalized
leases) ............................................................. 3,009
Other real estate owned .................................................. 272
Investments in unconsolidated subsidiaries and
associated companies ................................................ 300
Customers' liability to this bank on acceptances
outstanding ......................................................... 1,329
Intangible assets ........................................................ 1,429
Other assets ............................................................. 13,563
--------
TOTAL ASSETS ............................................................. $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................... $98,760
Noninterest-bearing ................................$ 39,071
Interest-bearing ................................... 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ......... 75,403
Noninterest-bearing ................................$ 3,877
Interest-bearing ................................... 71,526
Federal funds purchased and securities sold under agree-
ments to repurchase ......................................................... 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year
through three years .................................................... 213
With a remaining maturity of more than three years ..................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses) on available-for-sale securities ...... 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
GUARANTEE OF SALOMON SMITH BARNEY HOLDINGS INC. WITH RESPECT TO THE TARGETED
GROWTH ENHANCED TERMS SECURITIES OF TARGETS TRUST VI
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System
20th and C Street NW, Washington, D.C., 20551 Federal Reserve Bank of New York,
District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit
Insurance Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
-------------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................... $ 11,951
Interest-bearing balances ........................................... 4,551
Securities:
Held to maturity securities .............................................. 1,740
Available for sale securities ............................................ 48,537
Federal funds sold and securities purchased under
agreements to resell ................................................ 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .............................................. 124,660
Trading Assets ........................................................... 51,549
Premises and fixed assets (including capitalized
leases) ............................................................. 3,009
Other real estate owned .................................................. 272
Investments in unconsolidated subsidiaries and
associated companies ................................................ 300
Customers' liability to this bank on acceptances
outstanding ......................................................... 1,329
Intangible assets ........................................................ 1,429
Other assets ............................................................. 13,563
--------
TOTAL ASSETS ............................................................. $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................... $98,760
Noninterest-bearing ................................$ 39,071
Interest-bearing ................................... 59,689
--------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ................................................. 75,403
Noninterest-bearing ................................$ 3,877
Interest-bearing ................................... 71,526
Federal funds purchased and securities sold under agree-
ments to repurchase ......................................................... 34,471
Demand notes issued to the U.S. Treasury .................................... 1,000
Trading liabilities ......................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,781
With a remaining maturity of more than one year
through three years .................................................... 213
With a remaining maturity of more than three years ................... 104
Bank's liability on acceptances executed and outstanding .................... 1,329
Subordinated notes and debentures ........................................... 5,408
Other liabilities ........................................................... 12,041
TOTAL LIABILITIES ........................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 10,441
Undivided profits and capital reserves ...................................... 6,287
Net unrealized holding gains (losses)
on available-for-sale securities ............................................ 566
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
FORWARD CONTRACT OF SALOMON SMITH BARNEY HOLDINGS INC.
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
----------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
<TABLE>
<CAPTION>
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................ $ 11,951
Interest-bearing balances ................................................. 4,551
Securities: ...................................................................
Held to maturity securities..................................................... 1,740
Available for sale securities................................................... 48,537
Federal funds sold and securities purchased under
agreements to resell ...................................................... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income, allowance, and reserve .......... 124,660
Trading Assets ................................................................. 51,549
Premises and fixed assets (including capitalized
leases).................................................................... 3,009
Other real estate owned ........................................................ 272
Investments in unconsolidated subsidiaries and
associated companies....................................................... 300
Customers' liability to this bank on acceptances
outstanding ............................................................... 1,329
Intangible assets .............................................................. 1,429
Other assets ................................................................... 13,563
--------
TOTAL ASSETS ................................................................... $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ................................................................ $ 39,071
Interest-bearing ................................................................... 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ..................... 75,403
Noninterest-bearing................................................................. $ 3,877
Interest-bearing ................................................................... 71,526
Federal funds purchased and securities sold under
agreements to repurchase ................................................................ 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Otherborrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year through three years ................ 213
With a remaining maturity of more than three years ............................... 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses) on available-for-sale securities .................. 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
FORWARD CONTRACT OF SALOMON SMITH BARNEY HOLDINGS INC.
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
----------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
<TABLE>
<CAPTION>
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................ $ 11,951
Interest-bearing balances ................................................. 4,551
Securities: ...................................................................
Held to maturity securities..................................................... 1,740
Available for sale securities................................................... 48,537
Federal funds sold and securities purchased under
agreements to resell ...................................................... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income, allowance, and reserve .......... 124,660
Trading Assets ................................................................. 51,549
Premises and fixed assets (including capitalized
leases).................................................................... 3,009
Other real estate owned ........................................................ 272
Investments in unconsolidated subsidiaries and
associated companies....................................................... 300
Customers' liability to this bank on acceptances
outstanding ............................................................... 1,329
Intangible assets .............................................................. 1,429
Other assets ................................................................... 13,563
--------
TOTAL ASSETS ................................................................... $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ................................................................ $ 39,071
Interest-bearing ................................................................... 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ..................... 75,403
Noninterest-bearing................................................................. $ 3,877
Interest-bearing ................................................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .............. 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year through three years ................ 213
With a remaining maturity of more than three years ................................. 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses)
on available-for-sale securities ........................................................ 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
FORWARD CONTRACT OF SALOMON SMITH BARNEY HOLDINGS INC.
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
----------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
<TABLE>
<CAPTION>
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................ $ 11,951
Interest-bearing balances ................................................. 4,551
Securities: ...................................................................
Held to maturity securities..................................................... 1,740
Available for sale securities................................................... 48,537
Federal funds sold and securities purchased under agreements to resell ......... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income, allowance, and reserve .......... 124,660
Trading Assets ................................................................. 51,549
Premises and fixed assets (including capitalized
leases).................................................................... 3,009
Other real estate owned ........................................................ 272
Investments in unconsolidated subsidiaries and
associated companies....................................................... 300
Customers' liability to this bank on acceptances
outstanding ............................................................... 1,329
Intangible assets .............................................................. 1,429
Other assets ................................................................... 13,563
--------
TOTAL ASSETS ................................................................... $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ................................................................ $ 39,071
Interest-bearing ................................................................... 59,689
--------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ............................................................. 75,403
Noninterest-bearing................................................................. $ 3,877
Interest-bearing ................................................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .............. 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year through three years ................ 213
With a remaining maturity of more than three years ................................. 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses) on available-for-sale securities .................. 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
FORWARD CONTRACT OF SALOMON SMITH BARNEY HOLDINGS INC.
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
----------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
<TABLE>
<CAPTION>
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................ $ 11,951
Interest-bearing balances ................................................. 4,551
Securities: ...................................................................
Held to maturity securities..................................................... 1,740
Available for sale securities................................................... 48,537
Federal funds sold and securities purchased under
agreements to resell ...................................................... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income, allowance, and reserve .......... 124,660
Trading Assets ................................................................. 51,549
Premises and fixed assets (including capitalized
leases).................................................................... 3,009
Other real estate owned ........................................................ 272
Investments in unconsolidated subsidiaries and
associated companies....................................................... 300
Customers' liability to this bank on acceptances
outstanding ............................................................... 1,329
Intangible assets .............................................................. 1,429
Other assets ................................................................... 13,563
--------
TOTAL ASSETS ................................................................... $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ................................................................ $ 39,071
Interest-bearing ................................................................... 59,689
In foreign offices, Edge and Agreement, subsidiaries and IBF's ..................... 75,403
Noninterest-bearing................................................................. $ 3,877
Interest-bearing ................................................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .............. 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year through three years ................ 213
With a remaining maturity of more than three years ................................. 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses) on available-for-sale securities .................. 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 22-1660266
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(Address of principal executive offices) (Zip Code)
FORWARD CONTRACT OF SALOMON SMITH BARNEY HOLDINGS INC.
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal
Reserve System 20th and C Street NW, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045. Federal Deposit Insurance
Corporation, 550 Seventeenth Street NW Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of January, 1999.
THE CHASE MANHATTAN BANK
By /s/ Cynthia Kerpen
----------------------------
Cynthia Kerpen
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
<TABLE>
<CAPTION>
ASSETS IN MILLIONS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................ $ 11,951
Interest-bearing balances ................................................. 4,551
Securities: ...................................................................
Held to maturity securities..................................................... 1,740
Available for sale securities................................................... 48,537
Federal funds sold and securities purchased under
agreements to resell ...................................................... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income, allowance, and reserve .......... 124,660
Trading Assets ................................................................. 51,549
Premises and fixed assets (including capitalized
leases).................................................................... 3,009
Other real estate owned ........................................................ 272
Investments in unconsolidated subsidiaries and
associated companies....................................................... 300
Customers' liability to this bank on acceptances
outstanding ............................................................... 1,329
Intangible assets .............................................................. 1,429
Other assets ................................................................... 13,563
--------
TOTAL ASSETS ................................................................... $292,620
========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................................ $ 98,760
Noninterest-bearing ................................................................ $ 39,071
Interest-bearing ................................................................... 59,689
--------
In foreign offices, Edge and Agreement, subsidiaries and IBF's ..................... 75,403
Noninterest-bearing................................................................. $ 3,877
Interest-bearing ................................................................... 71,526
Federal funds purchased and securities sold under agreements to repurchase .............. 34,471
Demand notes issued to the U.S. Treasury ................................................ 1,000
Trading liabilities ..................................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................................... 3,781
With a remaining maturity of more than one year through three years ................ 213
With a remaining maturity of more than three years ................................. 104
Bank's liability on acceptances executed and outstanding ................................ 1,329
Subordinated notes and debentures ....................................................... 5,408
Other liabilities ....................................................................... 12,041
TOTAL LIABILITIES ....................................................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................................... 0
Common stock ............................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............................... 10,441
Undivided profits and capital reserves .................................................. 6,287
Net unrealized holding gains (losses) on available-for-sale securities .................. 566
Cumulative foreign currency translation adjustments ..................................... 16
TOTAL EQUITY CAPITAL .................................................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
