As filed with the Securities and Exchange Commission on August 31, 1998
Registration No. 333-60811
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
RJR Nabisco, Inc. Delaware 56-0950247
RJR Nabisco Holdings Corp. Delaware 13-3490602
RJR Nabisco Holdings Capital Trust II Delaware To Be Applied for
RJR Nabisco Holdings Capital Trust III Delaware To Be Applied for
RJR Nabisco Holdings Capital Trust IV Delaware To Be Applied for
RJR Nabisco Holdings Capital Trust V Delaware To Be Applied for
RJR Nabisco Holdings Capital Trust VI Delaware To Be Applied for
(Exact name of Registrant as (State or other jurisdiction of (I.R.S. employer
specified in its charter) incorporation or organization) identification number)
</TABLE>
1301 Avenue of the Americas
New York, New York 10019
(212) 258-5600
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
H. Colin McBride, Esq.
RJR Nabisco Holdings Corp.
RJR Nabisco, Inc.
1301 Avenue of the Americas
New York, New York 10019
(212) 258-5600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
David W. Ferguson, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective.
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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 being offered only in connection
with dividend or interest reinvestment plans, please 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. [X]
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 the registration statement
shall become effective on such date as the Commission, acting pursuant to said
section 8(a), may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the first
form of prospectus included in this Registration Statement also relates to
$1,000,000,000 of debt securities of RJR Nabisco, Inc. registered and remaining
unissued under Registration Statement No. 333-39995 previously filed by RJR
Nabisco, Inc. in respect of which $303,031 has been paid to the Commission as a
filing fee.
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses
to be used in connection with offerings of the following securities:
(1) Debt Securities of RJR Nabisco, Inc.
(2) Preferred Securities of RJR Nabisco Holdings Capital Trust
II, RJR Nabisco Holdings Capital Trust III, RJR Nabisco
Holdings Capital Trust IV, RJR Nabisco Holdings Capital
Trust V and RJR Nabisco Holdings Capital Trust VI,
severally, Junior Subordinated Debt Securities of RJR
Nabisco Holdings Corp. and guarantees by RJR Nabisco
Holdings Corp. of Preferred Securities issued by RJR Nabisco
Holdings Capital Trust II, RJR Nabisco Holdings Capital
Trust III, RJR Nabisco Holdings Capital Trust IV, RJR
Nabisco Holdings Capital Trust V and RJR Nabisco Holdings
Capital Trust VI.
Each offering of securities made under this Registration
Statement will be made pursuant to one of these Prospectuses, with the
specific terms of the securities offered thereby set forth in an accompanying
Prospectus Supplement.
LOGO RJR Nabisco, Inc.
Debt Securities
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RJR Nabisco, Inc. (the "Company") may offer from time to time
its debt securities in one or more series (the "Debt Securities") to the
public on terms determined by market conditions. Debt Securities may be
issuable in registered form without coupons or in bearer form with or without
coupons attached. Debt Securities may be sold for U.S. dollars, foreign
denominated currency or currency units; principal of and any interest on Debt
Securities likewise may be payable in U.S. dollars, foreign denominated
currency or currency units, in each case, as the Company specifically
designates. See "Description of Debt Securities." The aggregate initial
offering price of the Securities to be offered by this Prospectus and such
other prospectus shall not exceed $2,250,000,000.
The Debt Securities will be general obligations of the Company
and will rank pari passu with all other senior indebtedness of the Company.
Because the Company is a holding company, however, the Debt Securities will
effectively be subordinated to the claims of creditors of the Company's
subsidiaries. See "Description of Debt Securities-Ranking."
The accompanying Prospectus Supplement sets forth the specific
designation, aggregate principal amount, purchase price, maturity, interest
rate (or manner of calculation thereof), time of payment of interest (if any),
listing (if any) on a securities exchange and any other specific terms of the
Debt Securities and the name of and compensation to each dealer, underwriter
or agent (if any) involved in the sale of the Debt Securities. The managing
underwriters with respect to each series sold to or through underwriters will
be named in the accompanying Prospectus Supplement.
By separate prospectus, the form of which is included in the
Registration Statement of which this Prospectus forms a part, five Delaware
statutory business trusts (the "Trusts"), which are wholly owned subsidiaries
of RJR Nabisco Holdings Corp. ("Holdings"), the Company's parent, may from
time to time severally offer Preferred Securities guaranteed by Holdings to
the extent set forth therein and Holdings may from time to time issue Junior
Subordinated Debt Securities either directly or to a Trust. The Debt
Securities, Preferred Securities, Preferred Securities Guarantees and Junior
Subordinated Debt Securities are hereinafter collectively referred to as the
"Securities."
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The Debt Securities may be offered directly to purchasers or
through underwriters or through agents designated from time to time, as set
forth in the accompanying Prospectus Supplement. Net proceeds to the Company
will be the purchase price in the case of a dealer, the public offering price
less discount in the case of an underwriter and the purchase price less
commission in the case of an agent--in each case, less other expenses
attributable to issuance and distribution. See "Plan of Distribution" for
possible indemnification arrangements for dealers, underwriters and agents.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is August 31, 1998
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and also are available for inspection and copying at the regional
offices of the Commission located at Seven World Trade Center, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission. The address of such site is http://www.sec.gov. Such reports,
proxy statements and other information also can be inspected at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on
which exchange certain of the Company's securities are listed.
This Prospectus constitutes a part of a Registration Statement
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the
rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Company and the Securities. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by
the Company (File No. 1-6388) pursuant to the Exchange Act are incorporated by
reference and shall be deemed a part hereof:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1997,
(b) Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1998,
(c) Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1998, and
(d) All documents filed by the Company pursuant to sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt Securities.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of the documents incorporated herein by reference
(excluding exhibits unless such exhibits are specifically incorporated by
reference into such documents) may be obtained upon request without charge by
persons, including beneficial owners, to whom this Prospectus is delivered.
Requests should be made to RJR Nabisco, Inc., Attention: Investor Relations
Department, 1301 Avenue of the Americas, New York, New York 10019, telephone
number (212) 258-5600.
THE COMPANY
The operating subsidiaries of the Company comprise one of the
largest tobacco and food companies in the world. In the United States, the
tobacco business is conducted by R. J. Reynolds Tobacco Company ("RJRT"), a
wholly owned subsidiary of the Company and the second largest manufacturer of
cigarettes, and the food business is conducted by Nabisco Holdings Corp.
("Nabisco Holdings") through its wholly owned subsidiary, Nabisco, Inc.
("Nabisco"), the largest manufacturer and marketer of cookies and crackers.
The Company owns approximately 80.6% of the economic interest and
approximately 97.6% of the voting power of Nabisco Holdings. Tobacco
operations outside the United States are conducted by R. J. Reynolds
International B.V. ("Reynolds International"), and food operations outside the
United States are conducted by Nabisco International, Inc. ("Nabisco
International") and Nabisco Ltd, subsidiaries of Nabisco. RJRT's and Reynolds
International's tobacco products are sold around the world under a variety of
brand names. Food products are sold in the United States, Canada, Latin
America, certain European countries and certain other international markets.
Tobacco
RJRT's largest selling cigarette brands in the United States
include DORAL, WINSTON, CAMEL, SALEM and VANTAGE. RJRT's other cigarette
brands, including MONARCH, MORE, NOW, CENTURY, STERLING and MAGNA, are
marketed to meet a variety of smoker preferences. All RJRT brands are
marketed in a variety of styles. Reynolds International operates in over 170
markets around the world and is the second largest of two international
cigarette producers that have significant positions in the American Blend
segment of the international tobacco market.
Food
Nabisco is one of the largest food businesses in the world.
Through its domestic divisions, Nabisco manufactures and markets cookies,
crackers, snack foods, hard and bite-size candy, gum, nuts, hot cereals, pet
foods, dry-mix dessert products and other grocery products under established
and well-known trademarks, including OREO, CHIPS AHOY!, SNACKWELL'S, NEWTONS,
RITZ, PREMIUM, LIFE SAVERS, PLANTERS, A.1, GREY POUPON, MILK-BONE and CREAM OF
WHEAT. Nabisco International is a leading producer of biscuits, powdered
dessert and drink mixes, baking powder, pasta, juices, milk products and other
grocery items, as well as industrial yeast and baking ingredients, in many of
the 17 Latin American countries in which it has operations. Nabisco Ltd, which
conducts Nabisco's Canadian operations through a biscuit division, a grocery
division and a food service division, is that country's largest cookie and
cracker business and one of its leading producers of canned fruits, canned
vegetables, fruit juices and drinks and pet snacks.
The principal executive offices of the Company are located at
1301 Avenue of the Americas, New York, New York 10019; its telephone number is
(212) 258-5600.
RATIO OF EARNINGS TO FIXED CHARGES/DEFICIENCY
IN THE COVERAGE OF FIXED CHARGES BY EARNINGS BEFORE FIXED CHARGES
The ratio of earnings to fixed charges for the six months ended
June 30, 1998 and for each of the periods in the five-year period ended
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Six Months
Ended
June 30, For the years ended December 31,
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1998 1997 1996 1995 1994 1993
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(unaudited)
Ratio of earnings to fixed charges...................... __ 2.1 2.4 2.3 2.2 1.1
Deficiency in the coverage of fixed charges by earnings
before fixed charges............................... 94 __ __ __ __ __
</TABLE>
For purposes of these computations, earnings consist of income
before income taxes and fixed charges less minority interest in the pre-tax
income of Nabisco Holdings. Fixed charges consist of interest on indebtedness,
amortization of debt issuance costs, capitalized interest and that portion of
operating rental expense representative of the interest factor.
USE OF PROCEEDS
Unless otherwise set forth in the Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general
corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated as
of July 24, 1995 (the "Indenture") between the Company and The Bank of New
York, as trustee (the "Trustee"). As of March 31, 1998, there was
approximately $3,789,486,000 aggregate principal amount of Debt Securities
issued and outstanding under the Indenture. The Indenture is included as an
exhibit to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the Indenture and the Debt
Securities do not purport to be complete and such summaries are subject to the
detailed provisions of the Indenture, to which reference is hereby made for a
full description of such provisions, including the definition of certain terms
used herein, and for other information regarding the Debt Securities.
Numerical references in parentheses below are to sections in the Indenture.
Wherever particular sections or defined terms of the Indenture are referred
to, such sections or defined terms are incorporated herein by reference as
part of the statement made, and the statement is qualified in its entirety by
such reference. Any Debt Securities offered by this Prospectus and the
accompanying Prospectus Supplement are referred to herein as the "Offered Debt
Securities."
General
The Indenture does not limit the amount of additional
indebtedness that the Company may incur. However, see "Certain Covenants of
the Company--Restrictions on Funded Debt of Restricted Subsidiaries" for
certain limitations on the amount of Funded Debt (as hereinafter defined)
that may be incurred by Restricted Subsidiaries (as hereinafter defined) of
the Company (as hereinafter defined). The Debt Securities will rank pari passu
with all other unsubordinated indebtedness of the Company.
The Indenture provides that Debt Securities may be issued from
time to time in one or more series and may be denominated and payable in
foreign currencies or units based on or relating to foreign currencies,
including European Currency Units. Special United States federal income tax
considerations applicable to any Debt Securities so denominated are described
in the relevant Prospectus Supplement.
Reference is made to the Prospectus Supplement for the
following terms of and information relating to the Offered Debt Securities (to
the extent such terms are applicable to such Offered Debt Securities): (i) the
specific designation, aggregate principal amount, purchase price and
denomination; (ii) the currency or units based on or relating to currencies in
which such Offered Debt Securities are denominated and/or in which principal
of, premium, if any, and/or any interest on such Offered Debt Securities will
or may be payable; (iii) any date of maturity; (iv) interest rate or rates (or
the method by which such rate will be determined), if any; (v) the dates on
which any such interest will be payable; (vi) the place or places where the
principal of, premium, if any, and any interest on the Offered Debt Securities
will be payable; (vii) any redemption, repayment or sinking fund provisions;
(viii) whether the Offered Debt Securities will be issuable in registered form
or bearer form ("Bearer Debt Securities") or both and, if Bearer Debt
Securities are issuable, any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of Bearer Debt
Securities; (ix) any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay additional
amounts on Offered Debt Securities held by a person who is not a U.S. person
(as defined in the Prospectus Supplement) in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the Company will
have the option to redeem such Offered Debt Securities rather than pay such
additional amounts; and (x) any other specific terms of the Offered Debt
Securities, including any additional events of default or covenants provided
for with respect to such Offered Debt Securities, and any terms which may be
required by or be advisable under applicable laws or regulations.
Debt Securities may be presented for exchange and registered
Debt Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the
Prospectus Supplement. Subject to the limitations provided in the Indenture,
such services will be provided without charge, other than any tax or other
governmental charge payable in connection therewith. Debt Securities in
bearer form and the coupons, if any, appertaining thereto will be transferable
by delivery.
Debt Securities will bear interest at a fixed rate (a "Fixed
Rate Security") or a floating rate (a "Floating Rate Security"). Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes are described in the
relevant Prospectus Supplement.
Debt Securities may be issued, from time to time, with the
principal amount payable on any principal payment date, or the amount of
interest payable on any interest payment date, to be determined by reference
to one or more currency exchange rates, commodity prices, equity indices or
other factors. Holders of such Debt Securities may receive a principal amount
on any principal payment date, or a payment of interest on any interest
payment date, that is greater than or less than the amount of principal or
interest otherwise payable on such dates, depending upon the value on such
dates of the applicable currency, commodity, equity index or other factors.
Information as to the methods for determining the amount of principal or
interest payable on any date, the currencies, commodities, equity indices or
other factors to which the amount payable on such date is linked and certain
additional tax considerations will be set forth in the applicable Prospectus
Supplement.
Ranking
The Debt Securities, when issued, will rank pari passu in right
of payment with the senior indebtedness of the Company and senior in right of
payment to any future subordinated debt of the Company. However, claims of
holders of the Debt Securities will be effectively subordinated to the claims
of creditors of the Company's subsidiaries, including Nabisco and RJRT, with
respect to the assets of such subsidiaries. The amount of debt which is pari
passu with the Debt Securities and the amount of debt to which holders of the
Debt Securities are effectively subordinated as of the end of the most
recently completed fiscal quarter is included in the accompanying Prospectus
Supplement or incorporated herein by reference.
The Debt Securities may, under certain circumstances, be
equally and ratably secured with other senior indebtedness of the Company.
See "Certain Covenants of the Company--Restrictions on Liens."
Global Securities
The registered Debt Securities of a series may be issued in the
form of one or more fully registered global Debt Securities (a "Registered
Global Security") that will be deposited with a depositary (a "Depositary"),
with the Trustee, as custodian for a Depositary, or with a nominee for a
Depositary identified in the Prospectus Supplement relating to such series and
registered in the name of the Depositary or a nominee thereof. In such case,
one or more Registered Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding registered Debt Securities of the series to be represented by
such Registered Global Security or Registered Global Securities. Unless and
until it is exchanged in whole or in part for Debt Securities in definitive
registered form, a Registered Global Security may not be transferred except as
a whole by the Depositary for such Registered Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect
to any portion of a series of Debt Securities to be represented by a
Registered Global Security will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will apply to all depositary arrangements.
Ownership of beneficial interests in a Registered Global
Security will be limited to persons that have accounts with the Depositary for
such Registered Global Security ("participants") or persons that may hold
interests through participants. Upon the issuance of a Registered Global
Security, the Depositary for such Registered Global Security will credit, on
its book-entry registration and transfer system, the participants' accounts
with the respective principal amounts of the Debt Securities represented by
such Registered Global Security beneficially owned by such participants. The
accounts to be credited will be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership
of beneficial interests in such Registered Global Security will be shown on,
and the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in
Registered Global Securities.
So long as the Depositary for a Registered Global Security, or
its nominee, is the registered owner of such Registered Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Debt Securities represented by such Registered Global
Security for all purposes under the Indenture. Except as set forth below,
owners of beneficial interests in a Registered Global Security will not be
entitled to have the Debt Securities represented by such Registered Global
Security registered in their names, and will not receive or be entitled to
receive physical delivery of such Debt Securities in definitive form and will
not be considered the owners or holders thereof under the Indenture.
Accordingly, each person owning a beneficial interest in a Registered Global
Security must rely on the procedures of the Depositary for such Registered
Global Security and, if such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise any
rights of a holder under the Indenture. The Company understands that under
existing industry practices, if the Company requests any action of holders or
if any owner of a beneficial interest in a Registered Global Security desires
to give or take any action which a holder is entitled to give or take under
the Indenture, the Depositary for such Registered Global Security would
authorize the participants holding the relevant beneficial interests to give
or take such action, and such participants would authorize beneficial owners
owning through such participants to give or take such action or would
otherwise act upon the instruction of beneficial owners holding through them.
Payments of principal of, premium, if any, and any interest on
Debt Securities represented by a Registered Global Security registered in the
name of a Depositary or its nominee will be made to such Depositary or its
nominee, as the case may be, as the registered owner of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities
represented by a Registered Global Security, upon receipt of any payment of
principal, premium, if any, or any interest in respect of such Registered
Global Security, will immediately credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such
participants.
If the Depositary for any Debt Securities represented by a
Registered Global Security notifies the Company that it is at any time
unwilling or unable to continue as Depositary or ceases to be a clearing
agency registered under the Exchange Act, and a successor Depositary
registered as a clearing agency under the Exchange Act is not appointed by the
Company within 90 days, the Company will issue such Debt Securities in
definitive form in exchange for such Registered Global Security. In addition,
the Company may at any time and in its sole discretion determine not to have
any of the Debt Securities of a series represented by one or more Registered
Global Securities and, in such event, will issue Debt Securities of such
series in definitive form in exchange for all of the Registered Global
Security or Registered Global Securities representing such Debt Securities.
Any Debt Securities issued in definitive form in exchange for a Registered
Global Security will be registered in such name or names as the Depositary
shall instruct the Trustee. It is expected that such instructions will be
based upon directions received by the Depositary from participants with
respect to ownership of beneficial interests in such Registered Global
Security. The Debt Securities of a series may also be issued in the form of
one or more bearer global Securities (a "Bearer Global Security") that will be
deposited with a common depositary for Euro-clear and CEDEL, or with a nominee
for such depositary identified in the Prospectus Supplement relating to such
series. The specific terms and procedures, including the specific terms of
the depositary arrangement, with respect to any portion of a series of Debt
Securities to be represented by a Bearer Global Security will be described in
the Prospectus Supplement relating to such series.
Certain Covenants of the Company
The following restrictions apply to each series of Debt
Securities unless the terms of such series of Debt Securities provides
otherwise.
Restrictions on Liens. The Indenture provides that the Company
will not, and will not permit any Restricted Subsidiary to, mortgage or pledge
as security for any indebtedness any shares of stock, indebtedness or other
obligations of a Subsidiary (as hereinafter defined) or any Principal Property
(as hereinafter defined) of the Company or a Restricted Subsidiary, whether
such shares of stock, indebtedness or other obligations of a Subsidiary or
Principal Property is owned at the date of the Indenture or thereafter
acquired, unless the Company secures or causes such Restricted Subsidiary to
secure the outstanding Debt Securities equally and ratably with all
indebtedness secured by such mortgage or pledge, so long as such indebtedness
shall be so secured. This covenant does not apply in the case of: (a) the
creation of any mortgage, pledge or other lien or any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
acquired after the date of the Indenture (including acquisitions by way of
merger or consolidation) by the Company or a Restricted Subsidiary
contemporaneously with such acquisition, or within 120 days thereafter, to
secure or provide for the payment or financing of any part of the purchase
price thereof, or the assumption of any mortgage, pledge or other lien upon
any shares of stock, indebtedness or other obligations of a Subsidiary or any
Principal Property acquired after the date of the Indenture existing at the
time of such acquisition, or the acquisition of any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
subject to any mortgage, pledge or other lien without the assumption thereof,
provided that every such mortgage, pledge or lien referred to in this clause
(a) shall attach only to the shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property so acquired and fixed
improvements thereon; (b) any mortgage, pledge or other lien on any shares of
stock, indebtedness or other obligations of a Subsidiary or any Principal
Property existing at the date of the Indenture; (c) any mortgage, pledge or
other lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property in favor of the Company or any Restricted
Subsidiary; (d) any mortgage, pledge or other lien on Principal Property being
constructed or improved securing loans to finance such construction or
improvements; (e) any mortgage, pledge or other lien on shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
incurred in connection with the issuance of tax exempt governmental
obligations; and (f) any renewal of or substitution for any mortgage, pledge
or other lien permitted by any of the preceding clauses (a) through (e),
provided, in the case of a mortgage, pledge or other lien permitted under
clause (a), (b) or (d), the debt secured is not increased nor the lien
extended to any additional assets. (Section 3.6(a)) Notwithstanding the
foregoing, the Company or any Restricted Subsidiary may create or assume liens
in addition to those permitted by clauses (a) through (f), and renew, extend
or replace such liens, provided that at the time of such creation, assumption,
renewal, extension or replacement, and after giving effect thereto, Exempted
Debt (as hereinafter defined) does not exceed 10% of Consolidated Net Worth.
(Section 3.6(b))
Restrictions on Sale and Lease-Back Transactions. The
Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, sell or transfer, directly or indirectly, except to
the Company or a Restricted Subsidiary, any Principal Property as an entirety,
or any substantial portion thereof, with the intention of taking back a lease
of such property, except a lease for a period of three years or less at the
end of which it is intended that the use of such property by the lessee will
be discontinued; provided that, notwithstanding the foregoing, the Company or
any Restricted Subsidiary may sell any such Principal Property and lease it
back for a longer period (a) if the Company or such Restricted Subsidiary
would be entitled, pursuant to the provisions of Section 3.6(a) of the
Indenture described above under "Certain Covenants of the CompanyRestrictions
on Liens," to create a mortgage on the property to be leased securing Funded
Debt in an amount equal to the Attributable Debt (as hereinafter defined) with
respect to such sale and lease-back transaction without equally and ratably
securing the outstanding Debt Securities or (b) if (i) the Company promptly
informs the Trustee of such transaction, (ii) the net proceeds of such
transaction are at least equal to the fair value (as determined by board
resolution of the Company) of such property and (iii) the Company causes an
amount equal to the net proceeds of the sale to be applied to the retirement,
within 120 days after receipt of such proceeds, of Funded Debt incurred or
assumed by the Company or a Restricted Subsidiary (including the Debt
Securities); provided further that, in lieu of applying all of or any part of
such net proceeds to such retirement, the Company may, within 75 days after
such sale, deliver or cause to be delivered to the applicable trustee for
cancellation either debentures or notes evidencing Funded Debt of the Company
(which may include the outstanding Debt Securities) or of a Restricted
Subsidiary previously authenticated and delivered by the applicable trustee,
and not theretofore tendered for sinking fund purposes or called for a sinking
fund or otherwise applied as a credit against an obligation to redeem or
retire such notes or debentures. If the Company so delivers debentures or
notes to the applicable trustee with an Officers' Certificate, the amount of
cash which the Company will be required to apply to the retirement of Funded
Debt will be reduced by an amount equal to the aggregate of the then
applicable optional redemption prices (not including any optional sinking fund
redemption prices) of such debentures or notes, or if there are no such
redemption prices, the principal amount of such debentures or notes, provided,
that in the case of debentures or notes which provide for an amount less than
the principal amount thereof to be due and payable upon a declaration of the
maturity thereof, such amount of cash shall be reduced by the amount of
principal of such debentures or notes that would be due and payable as of the
date of such application upon a declaration of acceleration of the maturity
thereof pursuant to the terms of the indenture pursuant to which such
debentures or notes were issued. (Section 3.7(a)) Notwithstanding the
foregoing, the Company or any Restricted Subsidiary may enter into sale and
lease-back transactions in addition to those permitted in this paragraph and
without any obligation to retire any outstanding Debt Securities or other
Funded Debt, provided that at the time of entering into such sale and
lease-back transactions and after giving effect thereto, Exempted Debt does
not exceed 10% of Consolidated Net Worth. (Section 3.7(b))
Restrictions on Funded Debt of Restricted Subsidiaries. The
Indenture provides that the Company will not permit any Restricted Subsidiary
(a) to create, assume or permit to exist any Funded Debt other than (i) Funded
Debt secured by a mortgage, pledge or lien which is permitted to such
Restricted Subsidiary under the provisions described above under the "Certain
Covenants of the CompanyRestrictions on Liens," (ii) Funded Debt owed to the
Company or any Restricted Subsidiary, (iii) Funded Debt of a corporation
existing at the time it becomes a Restricted Subsidiary, (iv) Funded Debt
existing on the date of the Indenture, (v) Funded Debt created in connection
with the issuance of tax exempt governmental obligations or (vi) renewals,
extensions or replacements of the foregoing, or (b) to guarantee, directly or
indirectly through any arrangement which is substantially the equivalent of a
guarantee, any Funded Debt except for (i) guarantees existing on the date of
the Indenture, (ii) guarantees which, on the date of the Indenture, a
Restricted Subsidiary is obligated to give (iii) guarantees of Funded Debt
secured by a mortgage, pledge or lien which is permitted to such Restricted
Subsidiary under the provisions described above under "Certain Covenants of the
CompanyRestrictions on Liens" or (iv) renewals, extensions or replacements of
the foregoing. (Section 3.8(a)) Notwithstanding the foregoing, any Restricted
Subsidiary may create, assume or guarantee Funded Debt in addition to that
permitted in this paragraph, and renew, extend or replace such Funded Debt,
provided that at the time of such creation, assumption, guarantee, renewal,
extension or replacement, and after giving effect thereto, Exempted Debt does
not exceed 10% of Consolidated Net Worth. (Section 3.8(b))
The Indenture does not contain provisions which would afford
the holders of the Debt Securities protection in the event of a decline in the
Company's credit quality resulting from a change of control transaction, a
highly leveraged transaction or other similar transactions involving the
Company.
Certain Definitions
The term "Attributable Debt" as defined in the Indenture means,
when used in connection with a sale and lease-back transaction, at any date as
of which the amount thereof is to be determined, the product of (a) the net
proceeds from such sale and lease-back transaction multiplied by (b) a
fraction, the numerator of which is the number of full years of the term of
the lease relating to the property involved in such sale and lease-back
transaction (without regard to any options to renew or extend such term)
remaining at the date of the making of such computation and the denominator of
which is the number of full years of the term of such lease measured from the
first day of such term.
The term "Consolidated Net Worth" as defined in the Indenture
means, at any date of determination, the consolidated stockholder's equity of
the Company, as set forth on the then most recently available consolidated
balance sheet of the Company and its consolidated Subsidiaries; provided that
if at such date Nabisco Holdings, including its successors and assigns, is a
consolidated Subsidiary of the Company, such calculation shall be increased by
(i) the amount of the minority interest in Nabisco Holdings, including its
successors and assigns, as set forth on the then most recently available
consolidated balance sheet of the Company and its consolidated Subsidiaries,
and reduced by (ii) the consolidated stockholders' equity of Nabisco Holdings,
including its successors and assigns, as set forth on the then most recently
available consolidated balance sheet of Nabisco Holdings and its consolidated
subsidiaries; provided further that if at such date Nabisco Holdings,
including its successors and assigns, is not a consolidated Subsidiary of the
Company, such calculation shall be reduced by the amount of the Company's
investment in Nabisco Holdings, including its successors and assigns, if any,
as set forth on the then most recently available consolidated balance sheet
of the Company and its consolidated Subsidiaries.
The term "Exempted Debt" as defined in the Indenture means the
sum, without duplication, of the following items outstanding as of the date
Exempted Debt is being determined: (i) indebtedness of the Company and the
Restricted Subsidiaries incurred after the date of the Indenture and secured
by liens created, assumed or otherwise incurred or permitted to exist pursuant
to Section 3.6(b) of the Indenture described above under "Certain Covenants of
the CompanyRestrictions on Liens"; (ii) Attributable Debt of the Company and
the Restricted Subsidiaries in respect of all sale and lease-back transactions
with regard to any Principal Property entered into pursuant to Section 3.7(b)
of the Indenture described above under "Certain Covenants of the
CompanyRestrictions on Sale and Lease-Back Transactions"; and (iii) Funded
Debt of Restricted Subsidiaries created, assumed, guaranteed or otherwise
incurred or permitted to exist pursuant to Section 3.8(b) of the Indenture
described above under "Certain Covenants of the CompanyRestrictions on Funded
Debt of Restricted Subsidiaries".
The term "Funded Debt" as defined in the Indenture means all
indebtedness for money borrowed, including purchase money indebtedness, having
a maturity of more than one year from the date of its creation or having a
maturity of less than one year but by its terms being renewable or extendible,
at the option of the obligor in respect thereof, beyond one year from its
creation.
The terms "Principal Property" as defined in the Indenture
means land, land improvements, buildings and associated factory and laboratory
equipment owned or leased pursuant to a capital lease and used by the Company
or a Restricted Subsidiary primarily for processing, producing, packaging or
storing its products, raw materials, inventories, or other materials and
supplies and located within the United States of America and having an
acquisition cost plus capitalized improvements in excess of 2% of Consolidated
Net Worth, as of the date of such determination, but not including any such
property financed through the issuance of tax exempt governmental obligations,
or any such property that has been determined by board resolution of the
Company not to be of material importance to the respective businesses
conducted by the Company or such Restricted Subsidiary effective as of the
date such resolution is adopted.
The term "Restricted Subsidiary" as defined in the Indenture
means any Subsidiary organized and existing under the laws of the United
States of America and the principal business of which is carried on within the
United States of America which owns or is a lessee pursuant to a capital lease
of any Principal Property and in which the investment of the Company and all
its Subsidiaries exceeds 5% of Consolidated Net Worth as of the date of such
determination other than (i) each Subsidiary the major part of whose business
consists of finance, banking, credit, leasing, insurance, financial services
or other similar operations, or any combination thereof; (ii) each Subsidiary
formed or acquired after the date of the Indenture for the purpose of
acquiring the business or assets of another person and which does not acquire
all or any substantial part of the business or assets of the Company or any
Restricted Subsidiary; and (iii) Nabisco Holdings, each subsidiary of Nabisco
Holdings and each of their successors and assigns; provided, that the Board of
Directors of the Company may declare any such Subsidiary to be a Restricted
Subsidiary. The principal Restricted Subsidiary as of the date hereof is RJRT.
The term "Subsidiary" as defined in the Indenture means any
corporation of which at least a majority of all outstanding stock having by
the terms thereof ordinary voting power in the election of directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation has or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned by
the Company, or by one or more Subsidiaries of the Company or by the Company
and one or more Subsidiaries.
Restrictions on Mergers and Sales of Assets
Nothing contained in the Indenture or in the Debt Securities
will prevent any consolidation or merger of the Company into any other
corporation or corporations (whether or not affiliated with the Company), or
successive consolidations or mergers to which the Company or its successor
will be a party, or will prevent any sale, lease or conveyance of the property
of the Company, as an entirety or substantially as an entirety; provided that
upon any such consolidation, merger, sale, lease or conveyance to which the
Company is a party and in which the Company is not the surviving corporation,
the due and punctual performance and observance of all of the covenants and
conditions of the Indenture to be performed or observed by the Company and the
due and punctual payment of the principal of and interest on all of the Debt
Securities, according to their tenor, shall be expressly assumed by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation, or
into which the Company shall have been merged, or which shall have acquired
such property. (Section 9.1)
Events of Default
An Event of Default with respect to any series of Debt
Securities is defined under the Indenture as being: (a) default in payment of
any principal of the Debt Securities of such series when the same shall become
due and payable, either at maturity, upon any redemption, by declaration or
otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in the payment of any sinking fund
installment on the Debt Securities of such series when the same shall become
due and payable; (d) default for 90 days after written notice in the
observance or performance of any other covenant or agreement in respect of the
Debt Securities of such series; (e) certain events of bankruptcy, insolvency
or reorganization; and (f) any other Event of Default provided in a
supplemental indenture or board resolution relating to such securities.
(Section 5.1)
The Indenture provides that (a) if an Event of Default due to
the default in payment of principal of, premium, if any, or any interest on,
any series of Debt Securities or due to the default in the performance or
breach of any other covenant or warranty of the Company applicable to the Debt
Securities of such series but not applicable to all outstanding Debt
Securities shall have occurred and be continuing, either the Trustee or the
holders of not less than 25% in principal amount of the Debt Securities of
each affected series then outstanding (voting as a single class) by notice in
writing may then declare the principal of all Debt Securities of all such
affected series and interest accrued thereon to be due and payable
immediately; and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in the Indenture
applicable to all outstanding Debt Securities or due to certain events of
bankruptcy, insolvency and reorganization of the Company shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of all Debt Securities then outstanding (treated as one class)
by notice in writing may declare the principal of all Debt Securities and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal of, premium, if any, or
any interest on such Debt Securities) by the holders of a majority in
principal amount of the Debt Securities of all affected series then
outstanding. (Section 5.1)
The Indenture contains a provision entitling the Trustee,
subject to the duty of the Trustee during a default to act with the required
standard of care, to be indemnified by the holders of Debt Securities before
proceeding to exercise any right or power under the Indenture at the request
of such holders. (Section 5.6) Subject to such provisions in the Indenture
for the indemnification of the Trustee and certain other limitations, the
holders of a majority in aggregate principal amount of the Debt Securities of
each affected series then outstanding (with each such series voting as a
separate class) may 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. (Section 5.9)
The Indenture provides that no holder of Debt Securities may
institute any action against the Company under the Indenture (except actions
for payment of overdue principal or interest) unless such holder previously
shall have given to the Trustee written notice of default and continuance
thereof and unless the holders of not less than 25% in aggregate principal
amount of the Debt Securities of each affected series then outstanding
(treated as a single class) shall have requested the Trustee to institute such
action and shall have offered the Trustee reasonable indemnity, the Trustee
shall not have instituted such action within 60 days of such request and the
Trustee shall not have received direction inconsistent with such written
request by the holders of a majority in principal amount of the Debt
Securities of each affected series (treated as one class). (Section 5.6 and
Section 5.7)
The Indenture contains a covenant that the Company will file
annually, not more than four months after the end of its fiscal year, with the
Trustee a certificate that no default existed or a certificate specifying any
default that existed. (Section 3.5)
Discharge, Defeasance and Covenant Defeasance
The Indenture provides with respect to each series of Debt
Securities that, except to the extent the terms of such series of Debt
Securities provide otherwise, the Company may elect (a) to be released from
any and all obligations (except for the obligations to register the transfer
or exchange of the Debt Securities of such series and the Company's right of
optional redemption, to replace mutilated, destroyed, lost or stolen Debt
Securities of such series, rights of holders of Debt Securities to receive
payments of principal thereof and interest thereon, upon the original stated
due dates therefor (but not upon acceleration), to maintain an office or
agency in respect of the Debt Securities of such series and to hold moneys for
payment in trust) with respect to Debt Securities of any series for which the
exact amount of principal and interest due can be determined at the time of
the deposit with the Trustee as described below and all the Debt Securities of
such series are by their terms to become due and payable within one year or
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption ("one-year
defeasance"), (b) to defease and be discharged from any and all obligations
with respect to the Debt Securities of such series on the 91st day after the
deposit with the Trustee as described below (except for the obligations set
forth as exceptions in the preceding clause (a)) ("legal defeasance") or (c)
to be released from its obligations with respect to the Debt Securities of
such series (except for the obligations set forth as exceptions in the
preceding clause (a) and the obligations to compensate and indemnify the
Trustee, to appoint a successor Trustee, to repay certain moneys held by the
Paying Agent and to return certain unclaimed moneys held by the Trustee and to
comply with the Trust Indenture Act of 1939, as amended) ("covenant
defeasance"), upon the deposit with the Trustee, in trust for such purpose, of
cash or, in the case of Debt Securities payable in U.S. dollars, U.S.
Government Obligations (as defined in the Indenture) which through the payment
of principal and interest in accordance with their terms will insure the
availability of monies sufficient, or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent accountants, to pay the
principal of, premium, if any, and any interest on the Debt Securities of such
series, and any mandatory sinking fund thereon, on the due date thereof. Such
a trust may (except with respect to one-year defeasance or to the extent the
terms of the Debt Securities of such series otherwise provide) only be
established, if among other things, the Company has delivered to the Trustee
an opinion of counsel (as specified in the Indenture) to the effect that the
Holders of the Debt Securities of such series will not recognize income, gain
or loss for Federal income tax purposes as a result of such legal defeasance
or covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same time as would have been the case
if such legal defeasance or covenant defeasance had not occurred. Such
opinion, in the case of legal defeasance under clause (b) above, must (except
to the extent the terms of the Debt Securities of the relevant series
otherwise provide) refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable Federal income tax law occurring after the
date of the Indenture. The Prospectus Supplement may further describe the
provisions, if any, permitting such legal defeasance or covenant defeasance
with respect to the Offered Debt Securities of the series to which such
Prospectus Supplement relates. (Section 10.1)
Modification of the Indenture
The Indenture provides that the Company and the Trustee may
enter into supplemental indentures without the consent of the holders of Debt
Securities to: (a) secure any Debt Securities, (b) evidence the assumption by
a successor corporation of the obligations of the Company, (c) add covenants
for the protection of the holders of one or more series of Debt Securities or
to add Events of Default, (d) cure any ambiguity or correct any inconsistency
in the Indenture or to make other changes not materially adverse to the
interest of Holders of the Debt Securities, (e) establish the forms or terms
of Debt Securities of any series, (f) provide for uncertificated Debt
Securities, (g) evidence the acceptance of appointment by a successor trustee
or (h) comply with the Trust Indenture Act of 1939, as amended. (Section 8.1)
The Indenture also contains provisions permitting the Company
and the Trustee, with the consent of the holders of not less than a majority
in aggregate principal amount of Debt Securities of all series then
outstanding and affected (voting as one class), to add any provisions to, or
change in any manner or eliminate any of the provisions of, the Indenture or
modify in any manner the rights of the holders of the Debt Securities of each
series so affected; provided that the Company and the Trustee may not, without
the consent of the holder of each outstanding Debt Security affected thereby,
(a) extend the final maturity of any Debt Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on the redemption thereof or change the
currency in which the principal thereof (including any amount in respect of
original issue discount), or any interest thereon is payable, or reduce the
amount of the principal of any original issue discount security payable upon
acceleration or provable in bankruptcy, or alter certain provisions of the
Indenture relating to the Debt Securities issued thereunder not denominated in
U.S. dollars or impair the right to institute suit for the enforcement of any
payment on any Debt Security when due or any right of repayment at the option
of the holder of a Debt Security or (b) reduce the aforesaid percentage in
principal amount of Debt Securities of any series, the consent of the holders
of which is required for any such modification. (Section 8.2)
Concerning the Trustee
The Company and its subsidiaries maintain ordinary banking
relationships with Citibank, N.A. and its affiliates and a number of other
banks. The Bank of New York and its affiliates along with a number of other
banks have extended credit facilities to the Company and its subsidiaries.
The Bank of New York also acts as trustee under the indenture relating to the
Junior Subordinated Debt Securities of RJR Nabisco Holdings Corp. and under
the Declarations of Trust creating the Trusts.
PLAN OF DISTRIBUTION
The Company may offer the Debt Securities directly to
purchasers or to or through underwriters, dealers or agents. Any such
underwriter(s), dealer(s) or agent(s) involved in the offer and the sale of
the Debt Securities in respect of which this Prospectus is delivered will be
named in the accompanying Prospectus Supplement. The Prospectus Supplement
with respect to such Debt Securities will also set forth the terms of the
offering of such Debt Securities, including the purchase price of such Debt
Securities and the proceeds to the Company from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchanges on which such Debt Securities may
be listed.
The distribution of the Debt Securities may be effected from
time to time in one or more transactions at a fixed price or prices, which may
be changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
Prospectus Supplement will describe the method of distribution of the Debt
Securities.
If underwriters are used in an offering of Debt Securities, the
name of each managing underwriter, if any, and any other underwriters and the
terms of the transaction, including any underwriting discounts and other items
constituting compensation of the underwriters and dealers, if any, will be set
forth in the Prospectus Supplement relating to such offering and the Debt
Securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time
to time. It is anticipated that any underwriting agreement pertaining to any
Debt Securities will (1) entitle the underwriters to indemnification by the
Company against certain civil liabilities under the Securities Act or to
contribution with respect to payments which the underwriters may be required
to make in respect thereof, (2) provide that the obligations of the
underwriters will be subject to certain conditions precedent and (3) provide
that the underwriters will be obligated to purchase all Debt Securities
offered in a particular offering if any such Debt Securities are purchased.
In connection with an offering of Debt Securities, underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Debt Securities. Specifically, underwriters may over-allot in
connection with the offering, creating a syndicate short position. In
addition, underwriters may bid for, and purchase, Debt Securities in the open
market to cover syndicate short positions or to stabilize the price of the
Debt Securities. Finally, the underwriting syndicate may reclaim selling
concessions allowed for distributing the Debt Securities in the offering if
the syndicate repurchases previously distributed Debt Securities in syndicate
covering transactions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the Debt
Securities above independent market levels. Underwriters are not required to
engage in these activities, and may end any of these activities at any time.
If a dealer is used in an offering of Debt Securities, the
Company will sell such Debt Securities to the dealer, as principal. The
dealer may then resell such Debt Securities to the public at varying prices to
be determined by such dealer at the time of resale. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
If an agent is used in an offering of Debt Securities, the
agent will be named, and the terms of the agency will be set forth, in the
Prospectus Supplement relating thereto. Unless otherwise indicated in such
Prospectus Supplement, an agent will act on a best efforts basis for the
period of its appointment.
Dealers and agents named in a Prospectus Supplement may be
deemed to be underwriters (within the meaning of the Securities Act) of the
Debt Securities described therein and, under agreements which may be entered
into with the Company, may be entitled to indemnification by the Company
against certain civil liabilities under the Securities Act. Underwriters,
dealers and agents may be customers of, engage in transactions with, or
perform services for, the Company in the ordinary course of business.
Offers to purchase Debt Securities may be solicited, and sales
thereof may be made, by the Company directly to institutional investors or
others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resales thereof. The terms of any such
offer will be set forth in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or other agents of the Company to solicit offers by
certain institutional investors to purchase Debt Securities from the Company
pursuant to contracts providing for payment and delivery at a future date.
Institutional investors with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such purchasers must be approved by the Company. The obligations of any
purchaser under any such contract will not be subject to any conditions except
that (1) the purchase of the Debt Securities shall not at the time of delivery
be prohibited under the laws of any jurisdiction to which such purchaser is
subject and (2) if the Debt Securities are also being sold to underwriters,
the Company shall have sold to such underwriters the Debt Securities not
subject to delayed delivery. Underwriters and other agents will not have any
responsibility in respect of the validity or performance of such contracts.
The anticipated date of delivery of Debt Securities will be set
forth in the Prospectus Supplement relating to each offering.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for the
Company by H. Colin McBride, Senior Vice President, Associate General Counsel
and Secretary of the Company. As of July 31, 1998, H. Colin McBride
beneficially owned shares and options to purchase shares totaling less than
0.1% of the number of outstanding shares of Holdings' common stock.
EXPERTS
The consolidated financial statements and financial statement
schedules incorporated in this prospectus by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference herein, and have been so
incorporated by reference in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
ERISA MATTERS
Holdings and certain affiliates of Holdings may each be considered a
"party in interest" within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a "disqualified person" within
the meaning of the Code with respect to many employee benefit plans.
Prohibited transactions within the meaning of ERISA or the Code may arise, for
example, if the securities offered hereby are acquired by a pension or other
employee benefit plan with respect to which Holdings or any of its affiliates
is a service provider, unless such securities are acquired pursuant to an
exemption for transactions effected on behalf of such plan by a "qualified
professional asset manager" or pursuant to any other available exemption. Any
such pension or employee benefit plan proposing to invest in the securities
offered hereby should consult with its legal counsel.
RJR Nabisco Holdings Corp.
Junior Subordinated Debt Securities
RJR Nabisco Holdings Capital Trust II
RJR Nabisco Holdings Capital Trust III
RJR Nabisco Holdings Capital Trust IV
RJR Nabisco Holdings Capital Trust V
RJR Nabisco Holdings Capital Trust VI
Preferred Securities guaranteed to the extent set forth herein
by RJR Nabisco Holdings Corp.
-------------------------
RJR Nabisco Holdings Corp. ("Holdings") may offer and sell from
time to time junior subordinated debt securities (the "Junior Subordinated
Debt Securities") consisting of debentures, notes or other evidences of
indebtedness in one or more series and in amounts, at prices and on terms to
be determined at or prior to the time of any such offering. The Junior
Subordinated Debt Securities will be unsecured obligations of Holdings,
subordinate and junior in right of payment to all of its Senior Indebtedness
(as defined herein).
RJR Nabisco Holdings Capital Trust II, RJR Nabisco Holdings
Capital Trust III, RJR Nabisco Holdings Capital Trust IV, RJR Nabisco Holdings
Capital Trust V and RJR Nabisco Holdings Capital Trust VI (each an "RJR Nabisco
Holdings Capital Trust"), each a statutory business trust formed under the
laws of the State of Delaware, may offer and sell, from time to time,
preferred securities representing undivided beneficial interests in the assets
of the respective RJR Nabisco Holdings Capital Trusts ("Preferred
Securities"). The payment of periodic cash distributions with respect to
Preferred Securities of the Trust out of moneys held by the Institutional
Trustee (as defined herein) of each of the RJR Nabisco Holdings Capital
Trusts, and payments on liquidation of each RJR Nabisco Holdings Capital Trust
and on redemption of Preferred Securities of such RJR Nabisco Holdings Capital
Trust, will be guaranteed by Holdings as and to the extent described herein
(each, a "Preferred Securities Guarantee"). See "Description of the Preferred
Securities Guarantees". Holdings' obligation under each Preferred Securities
Guarantee is an unsecured obligation of Holdings and will rank (i) pari passu
in right of payment with Holdings' obligations under the Preferred Securities
Guarantees and other guarantees of preferred securities of any Financing
Entity (as defined herein), (ii) subordinate and junior in right of payment to
all Senior Indebtedness of Holdings, except obligations and securities made
pari passu or subordinate by their terms, and the Junior Subordinated Debt
Securities, and (iii) senior to all capital stock now or hereafter issued by
Holdings and to any guarantee now or hereafter entered into by Holdings in
respect of any of its capital stock. Junior Subordinated Debt Securities may
be issued and sold from time to time in one or more series by Holdings to an
RJR Nabisco Holdings Capital Trust, or a trustee of such trust, in connection
with the investment of the proceeds from the offering of Preferred Securities
and Common Securities (as defined herein) of such RJR Nabisco Holdings Capital
Trust. The Junior Subordinated Debt Securities purchased by an RJR Nabisco
Holdings Capital Trust may be subsequently distributed pro rata to holders of
Preferred Securities and Common Securities in connection with the dissolution
of such RJR Nabisco Holdings Capital Trust, upon the occurrence of certain
events as may be described in an accompanying Prospectus Supplement.
Specific terms of the Junior Subordinated Debt Securities of
any series or the Preferred Securities of any RJR Nabisco Holdings Capital
Trust in respect of which this Prospectus is being delivered (the "Offered
Securities") will be set forth in a Prospectus Supplement with respect to such
Offered Securities, which will describe, without limitation and where
applicable, the following: (i) in the case of Junior Subordinated Debt
Securities, the specific designation, aggregate principal amount, authorized
denomination, maturity, premium, if any, redemption or sinking fund
provisions, if any, interest rate (which may be fixed or variable), if any,
the time and method of calculating interest payments, if any, dates on which
premium, if any, and interest, if any, will be payable, the right of Holdings,
if any, to defer payments of interest on the Junior Subordinated Debt
Securities and the maximum length of such deferral period, the initial public
offering price, and any listing on a securities exchange and other specific
terms of the offering; and (ii) in the case of Preferred Securities, the
specific designation, number of securities, liquidation amount per security,
initial public offering price, and any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall
accrue, voting rights (if any), terms for any conversion or exchange into
other securities, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Junior Subordinated
Debt Securities of Holdings.
The Offered Securities may be offered in amounts, at prices and
on terms to be determined at the time of offering. Any Prospectus Supplement
relating to any series of Offered Securities will contain information
concerning certain United States federal income tax considerations, if
applicable, to the Offered Securities. By separate prospectus, the form of
which is included in the Registration Statement of which this Prospectus is a
part, RJR Nabisco, Inc. may offer Debt Securities in one or more series from
time to time. The aggregate initial public offering price of the securities to
be offered by this Prospectus and such other prospectus shall not exceed
$2,250,000,000. The aggregate initial offering price of the securities to be
offered by this Prospectus shall not exceed $1,250,000,000.
-------------------------
Holdings and/or each of the RJR Nabisco Holdings Capital Trusts
may sell the Offered Securities directly to purchasers or through underwriters
or through agents designated from time to time, as set forth in the
accompanying Prospectus Supplement. Net proceeds to Holdings and/or any RJR
Nabisco Holdings Capital Trust will be the purchase price in the case of a
dealer, the public offering price less discount in the case of an underwriter,
the purchase price less commission in the case of an agent--in each case, less
other expenses attributable to issuance and distribution. See "Plan of
Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is August 31, 1998
AVAILABLE INFORMATION
Holdings is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and also are available for inspection
and copying at the regional offices of the Commission located at Seven World
Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the public reference section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
Commission maintains a web site that contains reports, proxy statements and
other information regarding registrants that file electronically with the
Commission. The address of such site is http://www.sec.gov. Such reports, proxy
statements and other information also can be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which
exchange certain of Holdings' securities are listed.
This Prospectus constitutes a part of a Registration Statement
filed by Holdings and the RJR Nabisco Holdings Capital Trusts with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus omits certain of the information contained in the
Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and
related exhibits for further information with respect to Holdings, the RJR
Nabisco Holdings Capital Trusts and the securities offered hereby. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference.
No separate financial statements of any of the RJR Nabisco
Holdings Capital Trusts have been included or incorporated by reference
herein. Holdings and the RJR Nabisco Holdings Capital Trusts do not consider
that such financial statements would be material to holders of the Preferred
Securities because (i) all of the voting securities of each RJR Nabisco
Holdings Capital Trust will be owned, directly or indirectly by, Holdings, a
reporting company under the Exchange Act, (ii) each of the RJR Nabisco
Holdings Capital Trusts is a newly-formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and
does not propose to engage in, any activity other than issuing Trust
Securities (as defined herein) representing undivided beneficial interests in
the assets of such RJR Nabisco Holdings Capital Trust and investing the
proceeds thereof in Junior Subordinated Debt Securities issued by Holdings and
(iii) the obligations of each of the RJR Nabisco Holdings Capital Trusts under
the Preferred Securities of such RJR Nabisco Holdings Capital Trust are fully
and unconditionally guaranteed by Holdings as and to the extent described
herein. See "The RJR Nabisco Holdings Capital Trusts," "Description of the
Preferred Securities Guarantees" and "Description of the Junior Subordinated
Debt Securities." The RJR Nabisco Holdings Capital Trusts are statutory
business trusts formed under the laws of the State of Delaware. Holdings, as
of the date of this Prospectus, beneficially owns all of the beneficial
interests in each of the RJR Nabisco Holdings Capital Trusts.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by
Holdings (File No. 1-10215) pursuant to the Exchange Act are incorporated by
reference and shall be deemed a part hereof:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1997,
(b) Quarterly Reports on Form 10-Q for the fiscal quarter ended
March 31, 1998,
(c) Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1998, and
(d) All documents filed by Holdings pursuant to sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Offered
Securities.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of the documents incorporated herein by reference
(excluding exhibits unless such exhibits are specifically incorporated by
reference into such documents) may be obtained upon request without charge by
persons, including beneficial owners, to whom this Prospectus is delivered.
Requests should be made to RJR Nabisco Holdings Corp., Attention: Investor
Relations Department, 1301 Avenue of the Americas, New York, New York 10019,
telephone number (212) 258-5600.
HOLDINGS
The operating subsidiaries of Holdings, owned through its
wholly owned subsidiary, RJR Nabisco, Inc. ("RJRN"), comprise one of the
largest tobacco and food companies in the world. In the United States, the
tobacco business is conducted by R. J. Reynolds Tobacco Company ("RJRT"), a
wholly owned subsidiary of RJRN and the second largest manufacturer of
cigarettes, and the food business is conducted by Nabisco Holdings Corp.
("Nabisco Holdings") through its wholly owned subsidiary, Nabisco, Inc.
("Nabisco"), the largest manufacturer and marketer of cookies and crackers.
RJRN owns approximately 80.6% of the economic interest and approximately 97.6%
of the voting power of Nabisco Holdings. Tobacco operations outside the United
States are conducted by R. J. Reynolds International B.V. ("Reynolds
International") and food operations outside the United States are conducted by
Nabisco International and Nabisco Ltd, subsidiaries of Nabisco. RJRT's and
Reynolds International's tobacco products are sold around the world under a
variety of brand names. Food products are sold in the United States, Canada,
Latin America and certain other international markets.
Tobacco
RJRT's largest selling cigarette brands in the United States
include DORAL, WINSTON, CAMEL, SALEM and VANTAGE. RJRT's other cigarette
brands, including MONARCH, MORE, NOW, CENTURY, STERLING and MAGNA, are
marketed to meet a variety of smoker preferences. All RJRT brands are marketed
in a variety of styles. Reynolds International operates in over 170 markets
around the world and is the second largest of two international cigarette
producers that have significant positions in the American Blend segment of the
international tobacco market.
Food
Nabisco is one of the largest food businesses in the world.
Through its domestic divisions, Nabisco manufactures and markets cookies,
crackers, snack foods, hard and bite-size candy, gum, nuts, hot cereals, pet
foods, dry-mix dessert products and other grocery products under established
and well-known trademarks, including OREO, CHIPS AHOY!, SNACKWELL'S, NEWTONS,
RITZ, PREMIUM, LIFE SAVERS, PLANTERS, A.1, GREY POUPON, MILK-BONE and CREAM OF
WHEAT. Nabisco International is a leading producer of biscuits, powdered
dessert and drink mixes, baking powder, pasta, juices, milk products and other
grocery items, as well as industrial yeast and baking ingredients, in many of
the 17 Latin American countries in which it has operations. Nabisco Ltd, which
conducts Nabisco's Canadian operations through a biscuit division, a grocery
division and a food service division, is that country's largest cookie and
cracker business and one of its leading producers of canned fruits, canned
vegetables, fruit juice and drinks and pet snacks.
THE RJR NABISCO HOLDINGS CAPITAL TRUSTS
Each of the RJR Nabisco Holdings Capital Trusts is a statutory
business trust that was formed under the Delaware Business Trust Act (the
"Business Trust Act") on August 6, 1998 pursuant to separate declarations of
trust dated August 5, 1998 among the Trustees of such RJR Nabisco Holdings
Capital Trust and Holdings and the filing of separate certificates of trust
with the Secretary of State of Delaware. Each 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, as of the date
the Preferred Securities of such RJR Nabisco Holdings Capital Trust are
initially issued. Each Declaration will be qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance
of the Preferred Securities by an RJR Nabisco Holdings Capital Trust, the
holders thereof will own all of the issued and outstanding Preferred
Securities of such RJR Nabisco Holdings Capital Trust. Holdings has agreed to
acquire common securities representing common undivided beneficial interests
in the assets of each RJR Nabisco Holdings Capital Trust (the "Common
Securities," and together with the Preferred Securities, the "Trust
Securities") in an amount equal to at least 3% of the total capital of each
RJR Nabisco Holdings Capital Trust and will own, directly or indirectly, all
of the issued and outstanding Common Securities of each RJR Nabisco Holdings
Capital Trust. The Preferred Securities and the Common Securities will have
equivalent terms; provided that (i) if a Declaration Event of Default (as
defined herein) under the Declaration occurs and is continuing, the holders of
Preferred Securities will have a priority over holders of the Common
Securities with respect to payments in respect of distributions and payments
upon liquidation, redemption or otherwise and (ii) holders of Common
Securities have the exclusive right (subject to the terms of the Declaration)
to appoint, remove or replace Trustees (other than the Special Regular
Trustee) and to increase or decrease the number of Trustees, subject to the
right of holders of Preferred Securities to appoint a Special Regular Trustee
upon the occurrence of an Appointment Event.
The number of Trustees of each RJR Nabisco Holdings Capital
Trust shall initially be five. Three of the Trustees (the "Regular Trustees")
are individuals who are employees and officers of Holdings or its affiliates.
The fourth trustee is The Bank of New York, which will act as the indenture
trustee for purposes of the Trust Indenture Act. The fifth trustee is The
Bank of New York (Delaware), which will serve as the Delaware Trustee.
Pursuant to each Declaration, the Institutional Trustee will have the power to
exercise all rights, powers and privileges under the Indenture (as defined
under "Description of Junior Subordinated Debt Securities") with respect to
the Junior Subordinated Debt Securities. The Institutional Trustee will
promptly make distributions to the holders of the Trust Securities, out of any
funds in the applicable Trust. The Preferred Securities Guarantees will be
separately qualified under the Trust Indenture Act and will be held by The
Bank of New York, acting in its separate capacity as trustee with respect to
the Preferred Securities Guarantees for the benefit of the holders of the
Preferred Securities.
Each RJR Nabisco Holdings Capital Trust exists for the purpose
of (a) issuing its Preferred Securities and its Common Securities in exchange
for cash and investing the proceeds thereof in an equivalent amount of Junior
Subordinated Debt Securities of Holdings and (b) engaging in such other
activities as are necessary or incidental thereto. The rights of the holders
of the Preferred Securities, including economic rights, rights to information
and voting rights, are set forth in the applicable Declaration, the Business
Trust Act and the Trust Indenture Act.
The duties and obligations of the Trustees of each RJR Nabisco
Holdings Capital Trust shall be governed by the Declaration of such Trust.
Under its Declaration, each RJR Nabisco Holdings Capital Trust shall not, and
the Trustees (including the Institutional Trustee) shall cause such RJR
Nabisco Holdings Capital Trust not to, engage in any activity other than in
connection with the purposes of such RJR Nabisco Holdings Capital Trust or
other than as required or authorized by the related Declaration. In
particular, each RJR Nabisco Holdings Capital Trust shall not and the Trustees
(including the Institutional Trustee) shall not (a) invest any proceeds
received by such RJR Nabisco Holdings Capital Trust from holding the Junior
Subordinated Debt Securities but shall promptly distribute all such proceeds
to holders of Trust Securities pursuant to the terms of the related
Declaration and of the Trust Securities; (b) acquire any assets other than as
expressly provided in the related Declaration; (c) possess Trust property for
other than a Trust purpose; (d) make any loans, other than loans represented
by the Junior Subordinated Debt Securities, (e) possess any power or otherwise
act in such a way as to vary the assets of such RJR Nabisco Holdings Capital
Trust or the terms of the Trust Securities in any way whatsoever; (f) issue
any securities or other evidences of beneficial ownership of, or beneficial
interests in, such RJR Nabisco Holdings Capital Trust other than the Trust
Securities; (g) incur any indebtedness for borrowed money or (h) (i) direct
the time, method and place of exercising any trust or power conferred upon the
Indenture Trustee (as defined under "Description of Junior Subordinated
Debentures") with respect to the Junior Subordinated Debt Securities deposited
in that RJR Nabisco Holdings Capital Trust or upon the Institutional Trustee
of that RJR Nabisco Holdings Capital Trust with respect to its Preferred
Securities, (ii) waive any past default that is waivable under the Indenture
or the Declaration, (iii) exercise any right to rescind or annul any
declaration that the principal of all of the Junior Subordinated Debt
Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities or the Declaration, in each case where such consent shall be
required, unless in the case of this clause (h), the Institutional Trustee
shall have received an unqualified opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect
that such action will not cause such RJR Nabisco Holdings Capital Trust to be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership and that such RJR Nabisco Holdings
Capital Trust will continue to be classified as a grantor trust for United
States federal income tax purposes.
The books and records of each RJR Nabisco Holdings Capital
Trust will be maintained at the principal office of such RJR Nabisco Holdings
Capital Trust and will be open for inspection by a holder of Preferred
Securities of such RJR Nabisco Holdings Capital Trust or the duly authorized
representative of such holder for any purpose reasonably related to its
interest in such RJR Nabisco Holdings Capital Trust during normal business
hours.
Except as provided below or under the Business Trust Act and
the Trust Indenture Act, holders of Preferred Securities will have no voting
rights. If (i) distributions on the Preferred Securities of an RJR Nabisco
Holdings Capital Trust are in arrears for six consecutive regularly scheduled
quarterly distribution periods or (ii) an Event of Default under the
Declaration occurs and is continuing, holders of Preferred Securities of such
RJR Nabisco Holdings Capital Trust shall have the right to vote, as a single
class, for the appointment of a Special Regular Trustee who need not be an
employee or officer of or otherwise affiliated with Holdings. The Special
Regular Trustee shall have the same rights, powers and privileges under the
applicable Declaration as a Regular Trustee.
The Institutional Trustee, for the benefit of the holders of
the Trust Securities of an RJR Nabisco Holdings Capital Trust, is authorized
under each Declaration to exercise all rights under the Indenture with respect
to the Junior Subordinated Debt Securities deposited in such RJR Nabisco
Holdings Capital Trust and to enforce Holdings' obligations under such Junior
Subordinated Debt Securities upon the occurrence of an Indenture Event of
Default. The Institutional Trustee shall also be authorized to enforce the
rights of holders of Preferred Securities of an RJR Nabisco Holdings Capital
Trust under the Preferred Securities Guarantee. If any RJR Nabisco Holdings
Capital Trust's failure to make distributions on the Preferred Securities of
an RJR Nabisco Holdings Capital Trust is a consequence of Holdings' exercise
of its right to extend the interest payment period for the Junior Subordinated
Debt Securities deposited in such RJR Nabisco Holdings Capital Trust, the
Institutional Trustee will have no right to enforce the payment of
distributions on the Preferred Securities until a Declaration Event of Default
shall have occurred. Holders of at least a majority in liquidation amount of
the Preferred Securities issued by an RJR Nabisco Holdings Capital Trust will
have the right to direct the Institutional Trustee for that RJR Nabisco
Holdings Capital Trust with respect to certain matters under the Declaration
for that RJR Nabisco Holdings Capital Trust and the related Preferred
Securities Guarantee. If the Institutional Trustee fails to enforce its rights
under the Indenture or fails to enforce the Preferred Securities Guarantee,
any holder of Preferred Securities may, after a period of 90 days has elapsed
from such holder's written request to the Institutional Trustee to enforce
such rights or the Preferred Securities Guarantee, institute a legal
proceeding against Holdings to enforce such rights or the Preferred Securities
Guarantee, as the case may be. In addition, the holders of at least 25% in
aggregate liquidation amount of the outstanding Preferred Securities would have
the right to directly institute proceedings for enforcement of payment to such
holders of principal of, or premium, if any, or interest on the Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holders.
Pursuant to each Declaration, distributions on the Preferred
Securities must be paid on the dates payable out of any funds in the
applicable RJR Nabisco Holdings Capital Trust to the extent that the
Institutional Trustee has cash on hand in the Property Account to permit such
payment. If Holdings does not make interest payments on the Junior
Subordinated Debt Securities deposited in the RJR Nabisco Holdings Capital
Trust as trust assets, the Institutional Trustee will not make distributions
on the Preferred Securities of such RJR Nabisco Holdings Capital Trust. Under
each Declaration, if and to the extent Holdings does make interest payments on
the Junior Subordinated Debt Securities deposited in the RJR Nabisco Holdings
Capital Trust as trust assets, the Institutional Trustee is obligated to make
distributions on the Trust Securities of such RJR Nabisco Holdings Capital
Trust on a Pro Rata Basis (as defined below). The payment of distributions on
the Preferred Securities of an RJR Nabisco Holdings Capital Trust is
guaranteed by Holdings on a subordinated basis as and to the extent set forth
under "Description of the Preferred Securities Guarantees." A Preferred
Securities Guarantee is a full and unconditional guarantee from the time of
issuance of the Preferred Securities but the Preferred Securities Guarantee
covers distributions and other payments on the Preferred Securities only if
and to the extent that Holdings has made a payment to the Institutional
Trustee of interest or principal on the Junior Subordinated Debt Securities
deposited in the RJR Nabisco Holdings Capital Trust as trust assets. As used
in this Prospectus the term "Pro Rata Basis" shall mean pro rata to each
holder of Trust Securities of an RJR Nabisco Holdings Capital Trust according
to the aggregate liquidation amount of the Trust Securities of such RJR
Nabisco Holdings Capital Trust held by the relevant holder in relation to the
aggregate liquidation amount of all Trust Securities of such RJR Nabisco
Holdings Capital Trust outstanding unless, in relation to a payment, a
Declaration Event of Default (as defined herein) 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 Preferred Securities of such
RJR Nabisco Holdings Capital Trust pro rata according to the aggregate
liquidation amount of the Preferred Securities held by the relevant holder in
relation to the aggregate liquidation amount of all the Preferred Securities of
such RJR Nabisco Holdings Capital Trust outstanding, and only after
satisfaction of all amounts owed to the holders of the Preferred Securities,
to each holder of Common Securities of such RJR Nabisco Holdings Capital Trust
pro rata according to the aggregate liquidation amount of the Common
Securities held by the relevant holder in relation to the aggregate
liquidation amount of all Common Securities of such RJR Nabisco Holdings
Capital Trust outstanding.
If an event of default under the Indenture (an "Indenture Event
of Default") occurs and is continuing with respect to Junior Subordinated Debt
Securities deposited in an RJR Nabisco Holdings Capital Trust as assets, an
event of default under the Declaration (a "Declaration Event of Default") of
such RJR Nabisco Holdings Capital Trust will occur and be continuing with
respect to the outstanding Trust Securities of such RJR Nabisco Holdings
Capital Trust. In such event, each Declaration provides that the holders of
Common Securities of such RJR Nabisco Holdings Capital Trust will be deemed to
have waived any such Declaration Event of Default with respect to the Common
Securities until all Declaration Events of Default with respect to the
Preferred Securities of such RJR Nabisco Holdings Capital Trust have been
cured or waived. Until all such Declaration Events of Default with respect to
the Preferred Securities of such RJR Nabisco Holdings Capital Trust have been
so cured or waived, the Institutional Trustee will be deemed to be acting
solely on behalf of the holders of the Preferred Securities of such RJR
Nabisco Holdings Capital Trust and only the holders of the Preferred
Securities will have the right to direct the Institutional Trustee with
respect to certain matters under such Declaration and consequently under the
Indenture. If any Declaration Event of Default with respect to the Preferred
Securities of such RJR Nabisco Holdings Capital Trust is waived by the holders
of the Preferred Securities of such RJR Nabisco Holdings Capital Trust as
provided in the Declaration, the holders of Common Securities pursuant to such
Declaration have agreed that such waiver also constitutes a waiver of such
Declaration Event of Default with respect to the Common Securities for all
purposes under the Declaration without any further act, vote or consent of the
holders of the Common Securities.
Each Declaration provides that the Trustees of such RJR Nabisco
Holdings Capital Trust may treat the person in whose name a Preferred Security
is registered on the books and records of such RJR Nabisco Holdings Capital
Trust as the sole holder thereof and of the Preferred Securities represented
thereby for purposes of receiving distributions and for all other purposes
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such certificate or in the Preferred Securities represented
thereby on the part of any person, whether or not such RJR Nabisco Holdings
Capital Trust shall have actual or other notice thereof. Preferred Securities
will be issued in fully registered form. Unless otherwise specified in a
Prospectus Supplement, investors may elect to hold their Preferred Securities
directly or, subject to the rules and procedures of the depositary institution
(the "Depositary Institution") named in an accompanying Prospectus Supplement,
hold interests in a global certificate registered on the books and records of
such RJR Nabisco Holdings Capital Trust in the name of a Depositary
Institution or its nominee. Under each Declaration:
(i) such RJR Nabisco Holdings Capital Trust and the Trustees
thereof shall be entitled to deal with a Depositary Institution (or any
successor depositary) for all purposes, including the payment of distributions
and receiving approvals, votes or consents under the related Declaration, and
except as set forth in the related Declaration, shall have no obligation to
persons beneficially owning Preferred Securities ("Preferred Security
Beneficial Owners") registered in the name of and held by a Depositary
Institution or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through a Depositary Institution (or any successor depositary)
and shall be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and a Depositary Institution and/or its
participants. With respect to Preferred Securities registered in the name of
and held by a Depositary Institution or its nominee, all notices and other
communications required under each Declaration shall be given to, and all
distributions on such Preferred Securities shall be given or made to, a
Depositary Institution (or its successor).
The specific terms of the depositary arrangement with respect
to the Preferred Securities will be disclosed in the applicable Prospectus
Supplement.
In each Declaration, Holdings has agreed to pay for all debts
and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the applicable RJR Nabisco Holdings Capital Trust,
including the fees and expenses of its Trustees and any taxes and all costs
and expenses with respect thereto, to which such RJR Nabisco Holdings Capital
Trust may become subject, except for United States withholding taxes. The
foregoing obligations of Holdings under the Declaration are for the benefit
of, and shall be enforceable by, any person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice thereof. Any such Creditor may enforce such
obligations of Holdings directly against Holdings and Holdings has irrevocably
waived any right or remedy to require that any such Creditor take any action
against any RJR Nabisco Holdings Capital Trust or any other person before
proceeding against Holdings. Holdings has agreed in each Declaration to
execute such additional agreements as may be necessary or desirable in order
to give full effect to the foregoing.
The foregoing summary of certain provisions of the Declarations
summarizes the material terms thereof. Reference is made and such summary is
qualified in all respects by such reference to the form of Declaration which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
The business address of each RJR Nabisco Holdings Capital Trust
is c/o RJR Nabisco Holdings Corp., 1301 Avenue of the Americas, New York, New
York 10019, telephone number (212) 258-5600.
USE OF PROCEEDS
Each RJR Nabisco Holdings Capital Trust will use all proceeds
received from the sale of its Trust Securities to purchase Junior Subordinated
Debt Securities from Holdings.
Unless otherwise set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the Junior Subordinated Debt
Securities are expected to be used by Holdings for general corporate purposes.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS/DEFICIENCY
IN THE COVERAGE OF COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS BY EARNINGS BEFORE FIXED CHARGES
The ratio of earnings to fixed charges for the six months ended
June 30, 1998 and for each of the periods in the five-year period ended
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Six Months
Ended
June 30, For the years ended December 31,
----------- --------------------------------------------------
1998 1997 1996 1995 1994 1993
----------- ------ ------ ------ ------ ------
(Dollars in millions)
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.................... -- 1.9 2.2 2.2 2.2 1.1
Deficiency in the coverage of fixed charges by
earnings before fixed charges........................ $141 -- -- -- -- --
Ratio of earnings to combined fixed charges and
preferred stock dividends............................ -- 1.6 1.7 1.5 1.4 --
Deficiency in the coverage of combined fixed charges
and preferred stock dividends by earnings before
fixed charges........................................ $171 -- -- -- -- 266
</TABLE>
For purposes of these computations, earnings consist of income
before income taxes and fixed charges less minority interest in the pre-tax
income of Nabisco Holdings. Fixed charges consist of interest on indebtedness,
amortization of debt issuance costs, capitalized interest and that portion of
operating rental expense representative of the interest factor. Also, for
purposes of these computations, preferred stock dividends have been increased
to present the equivalent pre-tax amount, as applicable.
DESCRIPTION OF THE PREFERRED SECURITIES
Each RJR Nabisco Holdings Capital Trust may issue, from time to
time, only one series of Preferred Securities having terms described in the
Prospectus Supplement relating thereto. The Declaration of each RJR Nabisco
Holdings Capital Trust authorizes the Regular Trustees of such RJR Nabisco
Holdings Capital Trust to issue on behalf of such RJR Nabisco Holdings Capital
Trust one series of Preferred Securities. Each Declaration will be qualified
as an indenture under the Trust Indenture Act. The Preferred Securities will
have such terms, including distributions, redemption, voting, liquidation
rights and such other preferred, deferred or other special rights or such
restrictions as shall be set forth in the related Declaration or made part of
such Declaration by the Trust Indenture Act. Reference is made to the
Prospectus Supplement relating to the Preferred Securities of an RJR Nabisco
Holdings Capital Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such RJR Nabisco Holdings Capital Trust, (iii) the annual
distribution rate (or method of calculation thereof) for Preferred Securities
issued by such RJR Nabisco Holdings Capital Trust, the date or dates upon
which such distributions shall be payable and the record date or dates for the
payment of such distributions, (iv) whether distributions on Preferred
Securities issued by such RJR Nabisco Holdings Capital Trust shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on Preferred Securities issued by such RJR
Nabisco Holdings Capital Trust shall be cumulative, (v) the amount or amounts
which shall be paid out of the assets of such RJR Nabisco Holdings Capital
Trust to the holders of Preferred Securities of such RJR Nabisco Holdings
Capital Trust upon voluntary or involuntary dissolution, winding-up or
termination of such RJR Nabisco Holdings Capital Trust, (vi) the obligation or
right, if any, of such RJR Nabisco Holdings Capital Trust to purchase or
redeem Preferred Securities issued by such RJR Nabisco Holdings Capital Trust
and the price or prices at which, the period or periods within which and the
terms and conditions upon which Preferred Securities issued by such RJR
Nabisco Holdings Capital Trust shall or may be purchased or redeemed, in whole
or in part, pursuant to such obligation or right, (vii) the voting rights, if
any, of Preferred Securities issued by such RJR Nabisco Holdings Capital Trust
in addition to those required by law, including the number of votes per
Preferred Security and any requirement for the approval of the holders of
Preferred Securities, or of Preferred Securities issued by one or more RJR
Nabisco Holdings Capital Trusts, or of both, as a condition to specified
actions or amendments to the Declaration of such RJR Nabisco Holdings Capital
Trust, (viii) terms for any conversion or exchange into other securities and
(ix) any other relevant rights, preferences, privileges, limitations or
restrictions of Preferred Securities issued by such RJR Nabisco Holdings
Capital Trust consistent with the Declaration of such RJR Nabisco Holdings
Capital Trust and with applicable law. All Preferred Securities offered
hereby will be guaranteed by Holdings as and to the extent set forth below
under "Description of the Preferred Securities Guarantees." Certain United
States federal income tax considerations applicable to any offering of
Preferred Securities will be described in the Prospectus Supplement relating
thereto.
In connection with the issuance of Preferred Securities, each
RJR Nabisco Holdings Capital Trust will issue one series of Common Securities.
The Declaration of each RJR Nabisco Holdings Capital Trust authorizes the
Regular Trustees of such trust to issue on behalf of such RJR Nabisco Holdings
Capital Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by an
RJR Nabisco Holdings Capital Trust will be substantially identical to the
terms of the Preferred Securities issued by such RJR Nabisco Holdings Capital
Trust and the Common Securities will rank pari passu, and payments will be
made thereon on a Pro Rata Basis, with the Preferred Securities except that if
a Declaration Event of Default occurs and is continuing, the rights of the
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and maturity will be subordinated to the
rights of the holders of such Preferred Securities. Except in certain limited
circumstances, the Common Securities issued by an RJR Nabisco Holdings Capital
Trust will also carry the right to vote and to appoint, remove or replace any
of the Trustees of that RJR Nabisco Holdings Capital Trust. All of the Common
Securities of an RJR Nabisco Holdings Capital Trust will be directly or
indirectly owned by Holdings.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the
Preferred Securities Guarantees that will be executed and delivered by
Holdings for the benefit of the holders from time to time of Preferred
Securities. Each Preferred Securities Guarantee will be separately qualified
under the Trust Indenture Act and will be held by The Bank of New York, acting
in its capacity as trustee with respect thereto, for the benefit of the
holders of the Preferred Securities of the applicable RJR Nabisco Holdings
Capital Trust. The terms of each Preferred Securities Guarantee include those
stated in such Preferred Securities Guarantee and those made part of such
Preferred Securities Guarantee by the Trust Indenture Act. The description of
the Preferred Securities Guarantee set forth below summarizes the material
terms thereof and is subject in all respects to the provisions of, and is
qualified in its entirety by reference to, the form of the Preferred
Securities Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
General
Pursuant to each Preferred Securities Guarantee, Holdings will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by an RJR Nabisco
Holdings Capital Trust, the Guarantee Payments (as defined below) (without
duplication of amounts theretofore paid by such RJR Nabisco Holdings Capital
Trust), to the extent not paid by such RJR Nabisco Holdings Capital Trust,
regardless of any defense, right of set-off or counterclaim that such RJR
Nabisco Holdings Capital Trust may have or assert. The following payments or
distributions with respect to the Preferred Securities issued by an RJR
Nabisco Holdings Capital Trust to the extent not paid or made by such RJR
Nabisco Holdings Capital Trust (the "Guarantee Payments") will be subject to
the Preferred Securities Guarantee (without duplication): (i) any accrued and
unpaid distributions on the Preferred Securities and the redemption price,
including all accrued and unpaid distributions to the date of the redemption,
with respect to the Preferred Securities called for redemption by such RJR
Nabisco Holdings Capital Trust, but only if and to the extent that in each
case Holdings has made a payment to the related Institutional Trustee of
interest or principal on the Junior Subordinated Debt Securities deposited in
such RJR Nabisco Holdings Capital Trust as trust assets and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of such RJR
Nabisco Holdings Capital Trust (other than in connection with the distribution
of Junior Subordinated Debt Securities to holders of Preferred Securities or
the redemption of all of the Preferred Securities upon the maturity or
redemption of the Junior Subordinated Debt Securities) the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid distributions
on the Preferred Securities to the date of payment, to the extent such RJR
Nabisco Holdings Capital Trust has funds available therefor, and (b) the
amount of assets of such RJR Nabisco Holdings Capital Trust remaining
available for distribution to holders of Preferred Securities in liquidation
of such RJR Nabisco Holdings Capital Trust. Holdings' obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
Holdings to the holders of Preferred Securities or by causing the applicable
RJR Nabisco Holdings Capital Trust to pay such amounts to such holders.
The Preferred Securities Guarantee is a full and unconditional
guarantee from the time of issuance of the Preferred Securities, but the
Preferred Securities Guarantee covers distributions and other payments on the
Preferred Securities only if and to the extent that Holdings has made a
payment to the Institutional Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the RJR Nabisco Holdings Capital
Trust as trust assets. If Holdings does not make interest or principal
payments on the Junior Subordinated Debt Securities deposited in the RJR
Nabisco Holdings Capital Trust as trust assets, the Institutional Trust will
not make distributions of the Preferred Securities of such RJR Nabisco
Holdings Capital Trust and the RJR Nabisco Holdings Capital Trust will not
have funds available therefor.
Certain Covenants of Holdings
Unless otherwise provided in the applicable Prospectus
Supplement, in each Preferred Securities Guarantee, Holdings will covenant and
agree that, so long as the Preferred Securities issued by the applicable RJR
Nabisco Holdings Capital Trust remain outstanding, Holdings will not declare
or pay any dividends on, or redeem, purchase, acquire or make a distribution
or liquidation payment with respect to, any of its common stock or preferred
stock or make any guarantee payment with respect thereto if at such time (i)
Holdings shall be in default with respect to its Guarantee Payments or other
payment obligations under the Preferred Securities Guarantee, (ii) there shall
have occurred any Event of Default under the related Declaration or (iii)
Holdings shall have given notice of its election of an Extension Period (as
defined in the Declaration) as provided in the Indenture and such period, or
any extension thereof, is continuing; provided that Holdings will be permitted
to pay accrued dividends (and cash in lieu of fractional shares) upon the
conversion, other than at the option of Holdings, of any of its preferred
stock, including its ESOP Convertible Preferred Stock, in accordance with the
terms of such stock. In addition, so long as the Preferred Securities remain
outstanding, Holdings has agreed (i) to remain the sole direct or indirect
owner of all of the outstanding Common Securities issued by the applicable RJR
Nabisco Holdings Capital Trust and shall not cause or permit the Common
Securities to be transferred except to the extent permitted by the related
Declaration; provided that any permitted successor of Holdings under the
Indenture may succeed to Holdings' ownership of the Common Securities issued
by the applicable RJR Nabisco Holdings Capital Trust and (ii) to use
reasonable efforts to cause such RJR Nabisco Holdings Capital Trust to
continue to be treated as a grantor trust for United States federal income tax
purposes except in connection with a distribution of Junior Subordinated Debt
Securities.
Amendments and Assignment
Except with respect to any changes that do not adversely affect
the rights of holders of Preferred Securities (in which case no consent will
be required), the Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than a majority in aggregate
liquidation amount of the outstanding Preferred Securities issued by the
applicable RJR Nabisco Holdings Capital Trust. The manner of obtaining any
such approval of holders of the Preferred Securities will be set forth in an
accompanying Prospectus Supplement. All guarantees and agreements contained in
the Preferred Securities Guarantee of the applicable RJR Nabisco Holdings
Capital Trust shall bind the successors, assigns, receivers, trustees and
representatives of Holdings and shall inure to the benefit of the holders of
the Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving Holdings that is permitted under the
Indenture, Holdings may not assign its obligations under the Preferred
Securities Guarantee.
Termination of the Preferred Securities Guarantees
Each Preferred Securities Guarantee will terminate and be of no
further force and effect as to the Preferred Securities issued by the
applicable RJR Nabisco Holdings Capital Trust upon full payment of the
redemption price of all Preferred Securities of such RJR Nabisco Holdings
Capital Trust, or upon distribution of the Junior Subordinated Debt Securities
to the holders of Preferred Securities of such RJR Nabisco Holdings Capital
Trust in exchange for all of the Preferred Securities issued by such RJR
Nabisco Holdings Capital Trust, or upon full payment of the amounts payable
upon liquidation of such RJR Nabisco Holdings Capital Trust. Notwithstanding
the foregoing, the Preferred Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities issued by the applicable RJR Nabisco Holdings Capital
Trust must restore payment of any sums paid with respect to the Preferred
Securities or the Preferred Securities Guarantee.
Status of the Preferred Securities Guarantees
Holdings' obligations under the Preferred Securities Guarantee
to make the Guarantee Payments will constitute an unsecured obligation of
Holdings and will rank (i) pari passu in right of payment with Holdings'
obligations under the other Preferred Securities Guarantees and other
guarantees of preferred securities of any Financing Entity (as defined
herein), (ii) subordinate and junior in right of payment to all Senior
Indebtedness of Holdings, except obligations and securities made pari passu or
subordinate by their terms, and the Junior Subordinated Debt Securities, and
(iii) senior to all capital stock now or hereafter issued by Holdings and to
any guarantee now or hereafter entered into by Holdings in respect of any of
its capital stock. Holdings' obligations under each Preferred Securities
Guarantee will rank pari passu with its guarantee of the $949,000,000
aggregate liquidation amount of preferred securities issued by RJR Nabisco
Holdings Capital Trust I. Because Holdings is a holding company, Holdings'
obligations under the Preferred Securities Guarantee are also effectively
subordinated to all existing and future liabilities, including trade payables,
of Holdings' subsidiaries, except to the extent that Holdings is a creditor of
the subsidiaries recognized as such. Each Declaration provides that each
holder of Preferred Securities issued by the applicable RJR Nabisco Holdings
Capital Trust by acceptance thereof agrees to the subordination provisions and
other terms of the related Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee
of payment and not of collection (that is, 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). Each Preferred Securities Guarantee will be deposited with
the Institutional Trustee, as Indenture trustee, to be held for the benefit of
the holders of the Preferred Securities issued by the applicable RJR Nabisco
Holdings Capital Trust. The Institutional Trustee shall enforce the Preferred
Securities Guarantee on behalf of the holders of the Preferred Securities
issued by the applicable RJR Nabisco Holding Capital Trust. The holders of not
less than a majority in aggregate liquidation amount of the Preferred
Securities issued by the applicable RJR Nabisco Holdings Capital Trust have
the right to direct the time, method and place of conducting any proceeding
for any remedy available in respect of the related Preferred Securities
Guarantee, including the giving of directions to the Institutional Trustee. If
the Institutional Trustee fails to enforce such Preferred Securities Guarantee
as above provided, any holder of Preferred Securities issued by the applicable
RJR Nabisco Holdings Capital Trust may, after a period of 90 days has elapsed
from such holder's written request to the Institutional Trustee to enforce
such Preferred Securities Guarantee, institute a legal proceeding directly
against Holdings to enforce its rights under the Preferred Securities
Guarantee, without first instituting a legal proceeding against the applicable
RJR Nabisco Holdings Capital Trust or any other person or entity.
Miscellaneous
Holdings will be required to provide annually to The Bank of
New York a statement as to the performance by Holdings of certain of its
obligations under the Preferred Securities Guarantees and as to any default in
such performance. Holdings is required to file annually with The Bank of New
York an officer's certificate as to Holdings' compliance with all conditions
under the Preferred Securities Guarantees.
The Bank of New York, prior to the occurrence of a default,
undertakes to perform only such duties as are specifically set forth in the
Preferred Securities Guarantee and, after default with respect to a Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject
to such provision, The Bank of New York is under no obligation to exercise any
of the powers vested in it by a Preferred Securities Guarantee at the request
of any holder of Preferred Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
Governing Law
The Preferred Securities Guarantees will be governed by and
construed in accordance with the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Set forth below is a description of the Junior Subordinated
Debt Securities which will be deposited in the RJR Nabisco Holdings Capital
Trust as trust assets. The terms of the Junior Subordinated Debt Securities
include those stated in the Indenture dated September 21, 1995 between
Holdings and the Indenture Trustee, as supplemented by the First Supplemental
Indenture dated September 21, 1995 between Holdings and the Indenture Trustee
(as so supplemented, the "Indenture"), forms of which have been filed as
exhibits to the Registration Statement of which this Prospectus forms a part,
and those made part of the Indenture by the Trust Indenture Act. The following
description summarizes the material terms of the Indenture and is qualified in
its entirety by reference to the Indenture and the Trust Indenture Act.
Whenever particular provisions or defined terms in the Indenture are referred
to herein, such provisions or defined terms are incorporated by reference
herein. Section and Article references used herein are references to
provisions of the Indenture.
General
The Junior Subordinated Debt Securities may be issued
thereunder from time to time in one or more series in unlimited amounts
pursuant to an indenture supplemental to the Indenture. Reference is made to
the Prospectus Supplement which will accompany this Prospectus for the
following terms of the series of Junior Subordinated Debt Securities being
offered thereby, to the extent applicable: (i) the specific title of such
Junior Subordinated Debt Securities, aggregate principal amount and purchase
price; (ii) any limit on the aggregate principal amount of such Junior
Subordinated Debt Securities; (iii) the date or dates on which the principal
of such Junior Subordinated Debt Securities is payable and the right, if any,
to extend such date or dates; (iv) the rate or rates at which such Junior
Subordinated Debt Securities will bear interest, if any, or the method of
determination of such rate or rates; (v) the date or dates from which such
interest shall accrue, the interest payment dates on which such interest will
be payable or the manner of determination of such interest payment dates and
the record dates for the determination of holders to whom interest is payable
on any such interest payment dates; (vi) the right, if any, to extend the
interest payment periods and the duration of such extension; (vii) the place
or places where principal of (and premium, if any) and interest, if any, on
such Junior Subordinated Debt Securities will be payable; (viii) the portion
of the principal amount of such Junior Subordinated Debt Securities, if other
than the principal amount thereof, payable upon acceleration of maturity
thereof; (ix) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, such Junior Subordinated Debt
Securities may be redeemed, in whole or in part, at the option of Holdings;
(x) the right and/or obligation, if any of Holdings to redeem or purchase such
Junior Subordinated Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof and the period or periods
for which, the price or prices at which, and the terms and conditions upon
which, such Junior Subordinated Debt Securities shall be redeemed or
purchased, in whole or part, pursuant to such right and/or obligation; (xi)
the form of such Junior Subordinated Debt Securities; (xii) if other than
denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debt Securities shall be issuable; (xiii) any
and all other terms with respect to such series, including any modification of
or additions to the events of default or covenants provided for with respect
to the Junior Subordinated Debt Securities, and any terms which may be
required by or advisable under applicable laws or regulations not inconsistent
with the Indenture; and (xiv) whether such Junior Subordinated Debt Securities
are issuable as a global security, and in such case, the identity of the
depositary. Unless otherwise specified in the applicable Prospectus
Supplement, the Junior Subordinated Debt Securities will not be listed on any
national securities exchange.
Unless otherwise indicated in the Prospectus Supplement
relating thereto, the Junior Subordinated Debt Securities will be issued in
United States dollars in fully registered form without coupons in
denominations of $25 or integral multiples thereof. No service charge will be
made for any transfer or exchange of such Junior Subordinated Debt Securities,
but Holdings or the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Special United States federal income tax considerations
applicable to any such discounted Junior Subordinated Debt Securities or to
certain Junior Subordinated Debt Securities issued at par which are treated as
having been issued at a discount for United States federal income tax purposes
are described in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of
principal of, premium, if any, or interest on any series of Junior
Subordinated Debt Securities, special United States Federal income tax,
accounting and other considerations applicable thereto will be described in
the applicable Prospectus Supplement.
If the Preferred Securities of an RJR Nabisco Holdings Capital
Trust are listed on the New York Stock Exchange or another securities exchange
and the Junior Subordinated Debt Securities are distributed to the holders of
such Preferred Securities of an RJR Nabisco Holdings Capital Trust upon the
dissolution of such RJR Nabisco Holdings Capital Trust, Holdings will use its
reasonable efforts to list the Junior Subordinated Debt Securities on the New
York Stock Exchange or on such other exchange on which the Preferred
Securities of the applicable RJR Nabisco Holdings Capital Trust are then
listed.
The Indenture does not contain provisions which would afford
the holders of the Junior Subordinated Debt Securities protection in the event
of a decline in Holdings' credit quality resulting from a change of control
transaction, a highly leveraged transaction or other similar transactions
involving Holdings.
Certain Covenants of Holdings Applicable to the Junior Subordinated Debt
Securities
Unless otherwise provided in the applicable Prospectus
Supplement, if Junior Subordinated Debt Securities are issued to an RJR
Nabisco Holdings Capital Trust in connection with the issuance of Trust
Securities by such RJR Nabisco Holdings Capital Trust, Holdings will covenant
in the Indenture that, so long as the Preferred Securities issued by the
applicable RJR Nabisco Holdings Capital Trust remain outstanding, Holdings
will not declare or pay any dividends on, or redeem, purchase, acquire or make
a distribution or liquidation payment with respect to, any of its common stock
or preferred stock or make any guarantee payment with respect thereto if at
such time (i) Holdings shall be in default with respect to its Guarantee
Payments or other payment obligations under any Preferred Securities
Guarantee, (ii) there shall have occurred any Indenture Event of Default with
respect to any Junior Subordinated Debt Securities or (iii) Holdings shall
have given notice of its selection of an Extension Period as provided in the
Indenture and such period, or any extension thereof, is continuing; provided
that Holdings will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion, other than at the option of Holdings,
of any of its preferred stock, including its ESOP Convertible Preferred Stock,
in accordance with the terms of such stock and to make payments under the
Preferred Securities Guarantees. In addition, in the event that Junior
Subordinated Debt Securities are issued to an RJR Nabisco Holdings Capital
Trust in connection with the issuance of Trust Securities by such RJR Nabisco
Holdings Capital Trust, so long as the Preferred Securities issued by the
applicable RJR Nabisco Holdings Capital Trust remain outstanding, Holdings has
agreed (i) to remain the sole direct or indirect owner of all of the
outstanding Common Securities issued by the applicable RJR Nabisco Holdings
Capital Trust and shall not cause or permit the Common Securities to be
transferred except to the extent permitted by the Declaration; provided that
any permitted successor of Holdings under the Indenture may succeed to
Holdings' ownership of the Common Securities issued by the applicable RJR
Nabisco Holdings Capital Trust, (ii) to comply fully with all of its
obligations and agreements contained in the related Declaration and (iii) to
use reasonable efforts to cause such RJR Nabisco Holdings Capital Trust to
continue to be treated as a grantor trust for United States federal income tax
purposes except in connection with a distribution of Junior Subordinated Debt
Securities.
Subordination
Unless otherwise indicated in the applicable Prospectus
Supplement, Junior Subordinated Debt Securities will be subordinate and junior
in right of payment to all Senior Indebtedness of Holdings. In the event (a)
of any insolvency or bankruptcy proceedings, or any receivership, liquidation,
reorganization or other similar proceedings in respect of Holdings or its
property or any proceeding for voluntary liquidation, dissolution or other
winding up of Holdings, or (b) that Junior Subordinated Debt Securities of any
series are declared due and payable before their expressed maturity because of
the occurrence of an Event of Default under the Indenture (under circumstances
other than as set forth in clause (a) above), then the holders of all Senior
Indebtedness shall first be entitled to receive payment of the full amount due
thereon in money, before the holders of any of the Junior Subordinated Debt
Securities are entitled to receive a payment on account of the principal of,
premium, if any, or interest on the indebtedness evidenced by such Junior
Subordinated Debt Securities. In the event and during the continuation of any
default in payment of any Senior Indebtedness or if any event of default shall
exist under any Senior Indebtedness, as "event of default" is defined therein
or in the agreement under which the same is outstanding, no payment of the
principal of, premium, if any, or interest on the Junior Subordinated Debt
Securities shall be made.
The term "Senior Indebtedness" means (a) the principal of and
premium, if any, and interest on all indebtedness of Holdings, whether
outstanding on the date of the Indenture or thereafter created, (i) for money
borrowed by Holdings, (ii) for money borrowed by, or obligations of, others
and either assumed or guaranteed, directly or indirectly, by Holdings, (iii)
in respect of letters of credit and acceptances issued or made by banks, or
(iv) constituting purchase money indebtedness, or indebtedness secured by
property included in the property, plant and equipment accounts of Holdings at
the time of the acquisition of such property by Holdings, for the payment of
which Holdings is directly liable and (b) all deferrals, renewals, extensions
and refundings of, and amendments, modifications and supplements to, any such
indebtedness; provided, however, that Senior Indebtedness shall not include
(i) any indebtedness of the Company which, by its terms or the terms of the
instrument creating or evidencing it is subordinate in right of payment to or
pari passu with the Junior Subordinated Debt Securities, as the case may be,
and provided, further, that the Junior Subordinated Debt Securities shall rank
pari passu with all other debt securities, issued to (y) any other RJR Nabisco
Holdings Capital Trust and (z) any other trusts, partnerships or any other
entity affiliated with Holdings which is a financing vehicle of Holdings
("Financing Entity") in connection with an issuance of preferred securities
by such Financing Entity, or (ii) any indebtedness of Holdings to a
Subsidiary. As used in the first sentence of this paragraph the term
"purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or
other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, unless by its terms such indebtedness is
subordinate to other indebtedness of Holdings.
The Indenture does not limit the aggregate amount of
indebtedness, including Senior Indebtedness, that may be issued. As of June
30, 1998, Holdings (on an unconsolidated basis) had no Senior Indebtedness
other than guarantees issued pursuant to its credit facilities, and the only
obligations under these credit facilities were for accrued and unpaid facility
and other similar fees. In addition, as of June 30, 1998, Holdings had
$949,000,000 of pari passu indebtedness consisting of 10% Trust Originated
Preferred Securities and guarantees thereof issued by RJR Nabisco Holdings
Capital Trust I. Because Holdings is a holding company, the Junior
Subordinated Debt Securities are also effectively subordinated to all existing
and future liabilities, including trade payables, of Holdings' subsidiaries,
except to the extent that Holdings is a creditor of the subsidiaries
recognized as such. Claims on Holdings' subsidiaries by creditors other than
Holdings include liabilities incurred in the ordinary course of business.
There are no terms in the Preferred Securities, the Junior Subordinated Debt
Securities or the Preferred Securities Guarantee that limit Holdings' ability
to incur additional indebtedness, including indebtedness that ranks senior to
or pari passu with the Junior Subordinated Debt Securities and the Preferred
Securities Guarantee, or the ability of its subsidiaries to incur additional
indebtedness. See "Description of the Preferred Securities Guarantee--Status
of the Preferred Securities Guarantee."
Restrictions on Mergers and Sales of Assets
Nothing contained in the Indenture or in the Junior
Subordinated Debt Securities will prevent any consolidation of Holdings with,
or merger of Holdings into, any other corporation or corporations (whether or
not affiliated with Holdings), or successive consolidations or mergers to
which Holdings or its successor will be a party, or will prevent any sale,
lease or conveyance of the property of Holdings, as an entirety or
substantially as an entirety; provided that upon any such consolidation,
merger, sale, lease or conveyance to which Holdings is a party and in which
Holdings is not the surviving corporation, the due and punctual performance
and observance of all of the covenants and conditions of the Indenture to be
performed or observed by Holdings and the due and punctual payment of the
principal of and interest on all of the Junior Subordinated Debt Securities,
according to their tenor, shall be expressly assumed by supplemental Indenture
satisfactory in form to the Indenture Trustee, executed and delivered to the
Indenture Trustee, by the corporation formed by such consolidation, or into
which Holdings shall have been merged, or which shall have acquired such
property. (Section 9.1)
Events of Default
An Event of Default is defined under the Indenture as being:
(a) default in payment of any principal of the Junior Subordinated Debt
Securities of such series, either at maturity (or upon any redemption), by
declaration or otherwise; (b) default for 30 days in payment of any interest
on any Junior Subordinated Debt Securities of such series, provided that a
declaration of a valid Extension Period by Holdings shall not constitute a
default in the payment of interest for this purpose; (c) default in the
payment of any sinking fund installment on the Junior Subordinated Debt
Securities of such series when the same shall become due and payable; (d)
default for 90 days after written notice in the observance or performance of
any other covenant or agreement in the Junior Subordinated Debt Securities of
such series or the Indenture other than a covenant included in such Indenture
solely for the benefit of a series of Junior Subordinated Debt Securities
other than such series; and (e) certain events of bankruptcy, insolvency or
reorganization. (Section 5.1)
The Indenture provides that (a) if an Event of Default due to
the default in payment of principal of, premium, if any, or any interest on,
any series of Junior Subordinated Debt Securities or due to the default in the
performance or breach of any other covenant or warranty of Holdings applicable
to the Junior Subordinated Debt Securities of such series but not applicable
to all outstanding Junior Subordinated Debt Securities shall have occurred and
be continuing, either the Trustee or the holders of not less than 25% in
principal amount of the Junior Subordinated Debt Securities of all affected
series (treated as one class) (and, in the case of any series of Junior
Subordinated Debt Securities held as trust assets of an RJR Nabisco Holdings
Capital Trust and with respect to which such Junior Subordinated Debt
Securities have not been distributed to the holders of Junior Subordinated
Debt Securities of such RJR Nabisco Holdings Capital Trust (such event, a
"Security Exchange") has not theretofore occurred, such consent of holders of
the Preferred Securities and the Common Securities of such RJR Nabisco
Holdings Capital Trust as may be required under the Declaration of Trust of
such RJR Nabisco Holdings Capital Trust), then outstanding may then declare the
principal of all Junior Subordinated Debt Securities of each such affected
series and interest accrued thereon to be due and payable immediately; and (b)
if an Event of Default due to a default in the performance of any of the other
covenants or agreements in the Indenture applicable to all outstanding Junior
Subordinated Debt Securities or due to certain events of bankruptcy,
insolvency and reorganization of Holdings shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in
principal amount of all Junior Subordinated Debt Securities then outstanding
(treated as one class) (and, in the case of any series of Junior Subordinated
Debt Securities held as trust assets of an RJR Nabisco Holdings Capital Trust
and with respect to which a Security Exchange has not theretofore occurred,
such consent of holders of the Preferred Securities and the Common Securities
of such RJR Nabisco Holdings Capital Trust as may be required under the
Declaration of Trust of such RJR Nabisco Holdings Capital Trust), may declare
the principal of all such Junior Subordinated Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal of, premium, if any, or any
interest on such Junior Subordinated Debt Securities) by the holders of a
majority in principal amount of the Junior Subordinated Debt Securities of all
such affected series then outstanding (and, in the case of any series of
Junior Subordinated Debt Securities held as trust assets of an RJR Nabisco
Holdings Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust). (Section 5.1)
The Indenture contains a provision entitling the Trustee,
subject to the duty of the Trustee during a default to act with the required
standard of care, to be indemnified by the holders of Junior Subordinated Debt
Securities (treated as one class) (and, in the case of any series of Junior
Subordinated Debt Securities held as trust assets of an RJR Nabisco Holdings
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust), before proceeding to exercise any right or power under the Indenture
at the request of such holders. (Section 5.6) Subject to such provisions in
the Indenture for the indemnification of the Trustee and certain other
limitations, the holders of a majority in principal amount of the outstanding
Junior Subordinated Debt Securities (treated as one class) (and, in the case
of any series of Junior Subordinated Debt Securities held as trust assets of
an RJR Nabisco Holdings Capital Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such RJR Nabisco Holdings
Capital Trust as may be required under the Declaration of Trust of such RJR
Nabisco Holdings Capital Trust), may 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. (Section 5.9)
The Indenture provides that no holder of Junior Subordinated
Debt Securities may institute any action against Holdings under the Indenture
(except actions for payment of overdue principal or interest, provided that a
declaration of a valid Extension Period by Holdings shall not constitute a
failure to pay interest for this purpose) unless such holder previously shall
have given to the Trustee written notice of default and continuance thereof
and unless the holders of not less than 25% in principal amount of the Junior
Subordinated Debt Securities of all affected series (treated as one class)
(and, in the case of any series of Junior Subordinated Debt Securities held as
trust assets of an RJR Nabisco Holdings Capital Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of
holders of the Preferred Securities and the Common Securities of such RJR
Nabisco Holdings Capital Trust as may be required under the Declaration of
Trust of such RJR Nabisco Holdings Capital Trust), then outstanding shall have
requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity, the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority
in principal amount of the Junior Subordinated Debt Securities of all affected
series (treated as one class) (and, in the case of any series of Junior
Subordinated Debt Securities held as trust assets of an RJR Nabisco Holdings
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust). (Section 5.6 and Section 5.7)
The Indenture contains a covenant that Holdings will file
annually, not more than four months after the end of its fiscal year, with the
Trustee a certificate that no default existed or a certificate specifying any
default that existed, each as of the end of the fiscal year so ended. (Section
3.5)
Discharge, Defeasance and Covenant Defeasance
The Indenture provides with respect to each series of Junior
Subordinated Debt Securities that, except to the extent the terms of such
series of Junior Subordinated Debt Securities provide otherwise, Holdings may
elect either (a) to defease and be discharged from any and all obligations
with respect to the Junior Subordinated Debt Securities of such series (except
for the obligations to register the transfer or exchange of the Junior
Subordinated Debt Securities of such series, to replace temporary or
mutilated, destroyed, lost or stolen Junior Subordinated Debt Securities of
such series, to maintain an office or agency in respect of the Junior
Subordinated Debt Securities of such series and to hold moneys for payment in
trust) ("legal defeasance") or (b) to be released from its obligations with
respect to the Junior Subordinated Debt Securities of such series (except for
the obligations set forth as exceptions in the preceding clause (a) and except
for the obligations to pay the principal of and interest, if any, on the
Junior Subordinated Debt Securities, to compensate and indemnify the Trustee,
to appoint a successor Trustee, to repay certain moneys held by the Paying
Agent and to return certain unclaimed moneys held by the Trustee and Paying
Agent) ("covenant defeasance"), upon the deposit with the Trustee (or other
qualifying trustee), in trust for such purpose, of money or, in the case of
Junior Subordinated Debt Securities payable in U.S. dollars, U.S. Government
Obligations (as defined in the Indenture) which through the payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of, premium, if any, and any interest
on the Junior Subordinated Debt Securities of such series, and any mandatory
sinking fund or analogous payments thereon, on the due date thereof. Such a
trust may (except to the extent the terms of the Junior Subordinated Debt
Securities of such series otherwise provide) only be established, if among
other things, Holdings has delivered to the Trustee an opinion of counsel (as
specified in the Indenture) to the effect that the Holders of the Junior
Subordinated Debt Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such legal defeasance or
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same time as would have been the case
if such legal defeasance or covenant defeasance had not occurred. Such
opinion, in the case of legal defeasance under clause (a) above, must (except
to the extent the terms of the Junior Subordinated Debt Securities of the
relevant series otherwise provide) refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable Federal income tax law
occurring after the date of the Indenture. (Section 10.1)
Modification of the Indenture
The Indenture provides that Holdings and the Trustee may enter
into supplemental Indentures without the consent of the holders of Junior
Subordinated Debt Securities to: (a) secure any Junior Subordinated Debt
Securities, (b) evidence the assumption by a successor corporation of the
obligations of Holdings, (c) add covenants for the protection of the holders
of Junior Subordinated Debt Securities, (d) cure any ambiguity or correct any
inconsistency in the Indenture, (e) establish the forms or terms of Junior
Subordinated Debt Securities of any series, (f) provide for uncertificated
Junior Subordinated Debt Securities and (g) evidence the acceptance of
appointment by a successor trustee. (Section 8.1)
The Indenture also contains provisions permitting Holdings and
the Trustee, with the consent of the holders of not less than a majority in
principal amount of all Junior Subordinated Debt Securities then outstanding
and affected (treated as one class) (and, in the case of any series of Junior
Subordinated Debt Securities held as trust assets of an RJR Nabisco Holdings
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust), to add any provisions to, or change in any manner or eliminate any of
the provisions of, the Indenture or modify in any manner the rights of the
holders of the Junior Subordinated Debt Securities of each series so affected;
provided that Holdings and the Trustee may not, without the consent of the
holder of each outstanding Security affected thereby, (a) extend the stated
maturity of the principal of any Security, or reduce the principal amount
thereof or reduce the rate or extend the time of payment of interest thereon
(except that a declaration of a valid Extension Period by Holdings shall not
constitute an extension of time of payment of interest for this purpose), or
reduce any amount payable on the redemption thereof or change the currency in
which the principal thereof (including any amount in respect of original issue
discount), premium, if any, or any interest thereon is payable or reduce the
amount of any original issue discount security payable upon acceleration or
provable in bankruptcy or alter certain provisions of the Indenture relating
to the Junior Subordinated Debt Securities issued thereunder not denominated
in U.S. dollars or impair the right to institute suit for the enforcement of
any payment on any Security when due or (b) reduce the aforesaid percentage in
principal amount of Junior Subordinated Debt Securities of any series, the
consent of the holders of which is required for any such modification.
(Section 8.2)
Concerning the Indenture Trustee
Holdings and its subsidiaries maintain ordinary banking
relationships with The Bank of New York and its affiliates and a number of
other banks. The Bank of New York also acts as trustee under the indenture
relating to debt securities of RJR Nabisco, Inc.
Book-Entry and Settlement
If any Junior Subordinated Debt Securities are distributed to
holders of Preferred Securities, such Junior Subordinated Debt Securities will
be issued in fully registered form. In such event, investors may elect to hold
their Junior Subordinated Debt Securities directly or, subject to the rules
and procedures of a Depositary Institution, hold interests in a global
certificate registered in the name of a Depositary Institution or its nominee.
The specific terms of the depositary arrangement with respect
to any portion of a series of Junior Subordinated Debt Securities represented
by a global certificate will be described in the applicable Prospectus
Supplement.
PLAN OF DISTRIBUTION
Holdings may sell Junior Subordinated Debt Securities and the
RJR Nabisco Holdings Capital Trusts may sell Preferred Securities to one or
more underwriters for public offering and sale by them or may sell Junior
Subordinated Debt Securities or Preferred Securities to investors or other
persons directly or through agents. Any such underwriter or agent involved in
the offer and sale of the Offered Securities will be named in an applicable
Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a
fixed price or prices, which may be changed, or at prices related to
prevailing market prices or at negotiated prices. Holdings, or the applicable
RJR Nabisco Holdings Capital Trust also may, from time to time, authorize
firms acting as Holdings' or such Trust's agents to offer and sell the Junior
Subordinated Debt Securities or Preferred Securities upon the terms and
conditions as shall be set forth in any Prospectus Supplement. In connection
with the sale of Offered Securities, underwriters may be deemed to have
received compensation from Holdings or the applicable RJR Nabisco Holdings
Capital Trust in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of Offered Securities for whom they
may act as agent. Underwriters may sell Offered Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions (which may
be changed from time to time) from the purchasers for whom they may act as
agent.
Any underwriting compensation paid by Holdings or the RJR
Nabisco Holdings Capital Trusts to underwriters or agents in connection with
the offering of Offered Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set
forth in an applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements with
Holdings and the applicable RJR Nabisco Holdings Capital Trust, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement for
certain expenses.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, or be customers of, Holdings and the RJR
Nabisco Holdings Capital Trusts in the ordinary course of business.
If so indicated in an applicable Prospectus Supplement,
Holdings or the applicable RJR Nabisco Holdings Capital Trust will authorize
dealers acting as Holdings' or such Trust's agents to solicit offers by
certain institutions to purchase Offered Securities from Holdings or the
applicable RJR Nabisco Holdings Capital Trust, as the case may be, at the
public offering price set forth in such Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each contract will be
for an amount specified in the applicable Prospectus Supplement. Institutions
with whom Contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in
all cases be subject to the approval of Holdings. Contracts will not be
subject to any conditions except that (i) the purchase by an institution of
the Offered Securities covered by its Contracts shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject and (ii) if the Offered Securities are
being sold to underwriters, Holdings or the applicable RJR Nabisco Holdings
Capital Trust, as the case may be, shall have sold to such underwriters such
amount specified in the applicable Prospectus Supplement. Agents and
underwriters will have no responsibility in respect of the delivery or
performance of Contracts.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus
Supplement, the validity of the Junior Subordinated Debt Securities and the
Preferred Securities Guarantees offered hereby will be passed upon for
Holdings by H. Colin McBride, Esq., Senior Vice President, Associate General
Counsel and Secretary of Holdings. Unless otherwise indicated in the
applicable Prospectus Supplement, certain matters of Delaware law relating to
the validity of the Preferred Securities will be passed upon for the RJR
Nabisco Holdings Capital Trusts and Holdings by Morris, Nichols, Arsht &
Tunnell, special Delaware counsel for the RJR Nabisco Holdings Capital Trusts
and Holdings. As of July 31, 1998, H. Colin McBride beneficially owned shares
and options to purchase shares totaling less than 0.1% of the number of
outstanding shares of Holdings' Common Stock.
EXPERTS
The consolidated financial statements and financial statement
schedules incorporated in this prospectus by reference from Holdings' Annual
Report on Form 10-K for the year ended December 31, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated by reference herein, and have been so incorporated by
reference in reliance upon such report given upon the authority of that firm
as experts in accounting and auditing.
ERISA MATTERS
Holdings and certain affiliates of Holdings may each be
considered a "party in interest" within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a "disqualified person"
within the meaning of the Code with respect to many employee benefit plans.
Prohibited transactions within the meaning of ERISA or the Code may arise, for
example, if the securities offered hereby are acquired by a pension or other
employee benefit plan with respect to which Holdings or any of its affiliates
is a service provider, unless such securities are acquired pursuant to an
exemption for transactions effected on behalf of such plan by a "qualified
professional asset manager" or pursuant to any other available exemption. Any
such pension or employee benefit plan proposing to invest in the securities
offered hereby should consult with its legal counsel.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee..................... $368,750
Printing and engraving expenses.......... 75,000 *
Legal fees and expenses.................. 100,000 *
Accounting fees and expenses............. 75,000 *
Trustee expenses......................... 250,000 *
Blue sky fees and expenses............... 10,000 *
Rating Agency Fees....................... 100,000 *
Miscellaneous............................ 42,500 *
----------
Total............................. $1,021,250
==========
- ------------
* Estimated.
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware (the "Delaware Law") empowers a Delaware corporation to indemnify any
persons who are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of such corporation), by reason of the fact that such person was an
officer or director of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests, and, for criminal proceedings, had no reasonable cause to
believe his conduct was illegal. A Delaware corporation may indemnify
officers and directors in an action by or in the right of the corporation
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation in the performance of his duty. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which such
officer or director actually and reasonably incurred.
In accordance with the Delaware Law, the Certificate of
Incorporation of the each registrant contains a provision to limit the
personal liability of the directors of the registrant for violations of their
fiduciary duty. This provision eliminates each director's liability to the
registrant or its stockholder for monetary damages except (i) for any breach
of the director's duty of loyalty to the registrant or its stockholder, (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
Delaware Law providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions, or (iv) for any
transaction from which a director derived an improper personal benefit. The
effect of this provision is to eliminate the personal liability of directors
for monetary damages for actions involving a breach of their fiduciary duty of
care, including any such actions involving gross negligence.
Article IV of the Amended and Restated By-Laws of each of the
registrants provides for indemnification of the officers and directors to the
full extent permitted by applicable law.
Each Declaration provides that no Trustee, affiliate of any
Trustee or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee or any employee or agent
of the Trust or its affiliates (each, an "Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to any employee or
agent of the Trust or its affiliates, or any officers, directors,
shareholders, employees, representatives or agents of Holdings or its
affiliations or to any holders of Trust Securities of the Trust 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 each 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 gross
negligence (or, in the case of the Institutional Trustee, negligence) or
willful misconduct with respect to such acts or omission. Each Declaration
also provides that, to the fullest extent permitted by applicable law,
Holdings shall indemnify and hold harmless each Trustee, any affiliate of a
Trustee or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Trustees, or any employee or agent
of the Trust or its affiliates (each, an "Indemnified Person") from and
against any loss, damage or claim incurred by such Indemnified Person 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 authority conferred on such
Indemnified Person by the Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of
the Institutional Trustee, negligence) or willful misconduct with respect to
such acts or omissions. Each Declaration further provides that to the fullest
extent permitted by applicable law, expenses (including legal fees) incurred
by an Indemnified Person in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by Holdings prior to the
final disposition of such claim, demand, action, suit or proceeding upon
receipt by Holdings of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified pursuant to each Declaration.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
1.1 Form of Underwriting Agreement (Debt) (incorporated herein by
reference to Exhibit 1.1 to Registration Statement on Form S-3
(No. 33-60803), filed November 12, 1997)
1.2** Form of Underwriting Agreement (Preferred Securities)
3.1 Restated Charter of RJR Nabisco, Inc., dated April 12, 1995
(incorporated herein by reference to Exhibit 3.1 to RJR Nabisco,
Inc.'s Quarterly Report on Form 10-Q, filed April 12, 1995)
3.2 Restated Charter of RJR Nabisco, Holdings Corp., dated April 12,
1995 (incorporated herein by reference to Exhibit 3.1 to RJR
Nabisco Holding Corp.'s Quarterly Report on Form 10-Q, filed
April 12, 1995)
3.3 Certificate of Amendment to Amended and Restated Certificate of
Incorporation of RJR Nabisco Holdings Corp., dated April 12,
1995 (incorporated herein by reference to Exhibit 3.1 to RJR
Nabisco Holdings Corp.'s Quarterly Report on Form 10-Q, filed
May 19, 1995)
3.4 Certificate of Amendment to Amended and Restated Certificate of
Incorporation of RJR Nabisco Holding Corp., dated May 13, 1994
(incorporated herein by reference to Exhibit 3.3(d) to RJR
Nabisco, Inc.'s Annual Report on Form 10-K, filed February 23,
1995)
3.5 Bylaws of RJR Nabisco Holdings Corp. as revised on December 15,
1997 (incorporated herein by reference to Exhibit 3.2 to RJR
Nabisco Holdings Corp.'s 1997 Annual Report on Form 10-K, filed
December 15, 1997)
3.6 Bylaws of RJR Nabisco, Inc. as revised on December 15, 1997
(incorporated herein by reference to Exhibit 3.2 to RJR Nabisco,
Inc.'s Annual Report on Form 10-K, filed December 15, 1997
4.1 Amended and Restated Indenture, dated as of July 24, 1995,
between RJR Nabisco, Inc. and The Bank of New York (incorporated
herein by reference to Exhibit 4.1 to RJR Nabisco, Inc.'s 1997
Annual Report on Form 10-K, filed December 15, 1997)
4.2 Indenture, dated as of September 21, 1995, as supplemented by a
First Supplemental Indenture dated as of September 21, 1995,
between RJR Nabisco, Inc. and The Bank of New York (incorporated
herein by reference to Exhibit 4.2 to the RJR Nabisco, Inc.'s
1997 Annual Report on Form 10-K, filed December 15, 1997)
4.3** Form of Supplemental Indenture to be used in connection with the
issuance of Junior Subordinated Debt Securities and Preferred
Securities (including the form of the Junior Subordinated Debt
Securities)
4.4* Certificate of Trust of RJR Nabisco Holdings Capital Trust II
4.5* Declaration of Trust of RJR Nabisco Holdings Capital Trust II
4.6* Certificate of Trust of RJR Nabisco Holdings Capital Trust III
4.7* Declaration of Trust of RJR Nabisco Holdings Capital Trust III
4.8* Certificate of Trust of RJR Nabisco Holdings Capital Trust IV
4.9* Declaration of Trust of RJR Nabisco Holdings Capital Trust IV
4.10* Certificate of Trust of RJR Nabisco Holdings Capital Trust V
4.11* Declaration of Trust of RJR Nabisco Holdings Capital Trust V
4.12* Certificate of Trust of RJR Nabisco Holdings Capital Trust VI
4.13* Declaration of Trust of RJR Nabisco Holdings Capital Trust VI
4.14* Form of Amended and Restated Declaration of Trust
4.15** Form of Guarantee Agreement between RJR Nabisco Holdings Corp.
and The Bank of New York, as Trustee, with respect to each of
RJR Nabisco Holdings Capital Trust II, III, IV, V and VI's
Preferred Securities
5.1* Opinion of H. Colin McBride
5.3** Opinion of Morris, Nichols, Arsht & Tunnell
12.1 Statement re: Computations of Ratio of Earnings to Fixed
Charges/Deficiency in the Coverage of Combined Fixed Charges by
Earnings before Fixed Charges of RJR Nabisco, Inc. (incorporated
herein by reference to Exhibit 12.1 to RJR Nabisco, Inc.'s
Annual Report on Form 10-K, filed March 27, 1998 and to Exhibit
12.3 to RJR Nabisco, Inc.'s Quarterly Report on Form 10-Q, filed
August 14, 1998)
12.2 Statement re: Computations of Ratio of Earnings to Fixed
Charges/Deficiency in the Coverage of Fixed Charges by Earnings
Before Fixed Charges for RJR Nabisco Holdings Corp.
(incorporated by reference to Exhibit 12.2 to RJR Nabisco
Holdings Corp.'s Quarterly Report on Form 10-Q, filed August 14,
1998)
12.3 Statement re: Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends/Deficiency on the
Coverage of Combined Fixed Charges and Preferred Stock Dividends
by Earnings Before Fixed Charges of RJR Nabisco Holdings Corp.
(incorporated by reference to Exhibit 12.1 to RJR Nabisco
Holdings Corp.'s Quarterly Report on Form 10-Q, filed August 14,
1998)
23.1** Consent of Deloitte & Touche LLP
23.2 Consent of H. Colin McBride (included in Exhibit 5.1)
23.4 Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit
5.3)
24.1* Powers of Attorney for RJR Nabisco, Inc.
24.2* Powers of Attorney for RJR Nabisco Holdings Corp.
25.1* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Indenture
25.2* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Indenture, relating to the Junior Subordinated Debt Securities
25.3* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of RJR Nabisco
Holdings Capital Trust II
25.4* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of RJR Nabisco
Holdings Capital Trust III
25.5* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of RJR Nabisco
Holdings Capital Trust IV
25.6* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of RJR Nabisco
Holdings Capital Trust V
25.7* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of RJR Nabisco
Holdings Capital Trust VI
25.8* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of RJR Nabisco Holdings Corp.
with respect to the Preferred Securities of RJR Nabisco Holdings
Capital Trust II
25.9* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of RJR Nabisco Holdings Corp.
with respect to the Preferred Securities of RJR Nabisco Holdings
Capital Trust III
25.10* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of RJR Nabisco Holdings Corp.
with respect to the Preferred Securities of RJR Nabisco Holdings
Capital Trust IV
25.11* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of RJR Nabisco Holdings Corp.
with respect to the Preferred Securities of RJR Nabisco Holdings
Capital Trust V
25.12* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of RJR Nabisco Holdings Corp.
with respect to the Preferred Securities of RJR Nabisco Holdings
Capital Trust VI
- --------------------
* Previously filed.
** Filed herewith.
</TABLE>
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(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 prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registration pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant'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 the
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
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has 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 such registrant in the successful defense of any action, suit or
proceeding) is asserted 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) The undersigned hereby undertake 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 that time shall be deemed to be the initial bona fide
offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR
Nabisco, Inc. has duly caused this Amendment No. 1 to this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on this 31st day
of August, 1998.
RJR NABISCO, INC.
By: /s/ H. Colin McBride
---------------------------------------
Senior Vice President,
Associate General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Steven F. Goldstone Chairman and Chief Executive August 31, 1998
- ----------------------------- Officer (Principal Executive
Steven F. Goldstone Officer)
/s/ David B. Rickard Senior Vice President and Chief August 31, 1998
- ----------------------------- Financial Officer (Principal
David B. Rickard Financial Officer)
/s/ Richard G. Russell Senior Vice President and August 31, 1998
- ----------------------------- Controller (Principal
Richard G. Russell Accounting Officer)
* Director August 31, 1998
- -----------------------------
John T. Chain, Jr.
* Director August 31, 1998
- -----------------------------
Julius L. Chambers
* Director August 31, 1998
- -----------------------------
John L. Clendenin
* Director August 31, 1998
- -----------------------------
Ray J. Groves
* Director August 31, 1998
- -----------------------------
Fred H. Langhammer
* Director August 31, 1998
- -----------------------------
H. Eugene Lockhart
* Director August 31, 1998
- -----------------------------
Theodore E. Martin
* Director August 31, 1998
- -----------------------------
Rozanne L. Ridgway
*By /s/ H. Colin McBride
--------------------------
H. Colin McBride
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR
Nabisco Holdings Corp. has duly caused this Amendment No. 1 to this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on this 31st day of August, 1998.
RJR NABISCO HOLDINGS CORP.
By: /s/ H. Colin McBride
---------------------------------------
H. Colin McBride
Senior Vice President,
Associate General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Steven F. Goldstone Chairman and Chief Executive August 31, 1998
- ------------------------------- Officer (Principal Executive
Steven F. Goldstone Officer)
/s/ David B. Rickard Senior Vice President and August 31, 1998
- ------------------------------- Chief Financial Officer
David B. Rickard (Principal Financial Officer)
/s/Richard G. Russell Senior Vice President and August 31, 1998
- ------------------------------- Controller (Principal
Richard G. Russell Accounting Officer)
* Director August 31, 1998
- -------------------------------
John T. Chain, Jr.
* Director August 31, 1998
- -------------------------------
Julius L. Chambers
* Director August 31, 1998
- -------------------------------
John L. Clendenin
* Director August 31, 1998
- -------------------------------
Ray J. Groves
* Director August 31, 1998
- -------------------------------
Fred H. Langhammer
* Director August 31, 1998
- -------------------------------
H. Eugene Lockhart
* Director August 31, 1998
- -------------------------------
Theodore E. Martin
* Director August 31, 1998
- -------------------------------
Rozanne L. Ridgway
*By /s/ H. Colin McBride
------------------------------
H. Colin McBride
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR Nabisco
Holdings Capital 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 Amendment No. 1 to this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on this 31st day of August, 1998.
RJR NABISCO HOLDINGS CAPITAL TRUST II
By: /s/ H. Colin McBride
----------------------------------------
Name: H. Colin McBride
Title: Regular Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR Nabisco
Holdings Capital 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 Amendment No. 1 to this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on this 31st day of August, 1998.
RJR NABISCO HOLDINGS CAPITAL TRUST III
By: /s/ H. Colin McBride
----------------------------------------
Name: H. Colin McBride
Title: Regular Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR Nabisco
Holdings Capital 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 Amendment No. 1 to this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on this 31st day of August, 1998.
RJR NABISCO HOLDINGS CAPITAL TRUST IV
By: /s/ H. Colin McBride
----------------------------------------
Name: H. Colin McBride
Title: Regular Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR Nabisco
Holdings Capital 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 Amendment No. 1 to this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on this 31st day of August, 1998.
RJR NABISCO HOLDINGS CAPITAL TRUST V
By: /s/ H. Colin McBride
----------------------------------------
Name: H. Colin McBride
Title: Regular Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RJR Nabisco
Holdings Capital 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 Amendment No. 1 to this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on this 31st day of August, 1998.
RJR NABISCO HOLDINGS CAPITAL TRUST VI
By: /s/ H. Colin McBride
----------------------------------------
Name: H. Colin McBride
Title: Regular Trustee
8/26/98 Draft
RJR NABISCO HOLDINGS CORP.
RJR NABISCO HOLDINGS CAPITAL TRUSTS
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
____ __, 1998
From time to time, RJR Nabisco Holdings Capital Trust II, RJR
Nabisco Holdings Capital Trust III, RJR Nabisco Holdings Capital Trust IV, RJR
Nabisco Holdings Capital Trust V and RJR Nabisco Holdings Capital Trust VI and
each other statutory business trust (collectively, the "Trusts") formed by the
Company under the laws of the State of Delaware and RJR Nabisco Holdings
Corp., a Delaware corporation (the "Company"), as sponsor of each of the
Trusts and as guarantor, may enter into one or more underwriting agreements
(each an "Underwriting Agreement") that provide for the sale by the Trust
identified therein (such Trust being the "Designated Trust" with respect to
such Underwriting Agreement) of certain of its preferred securities (the
"Securities") to the several underwriters named therein (such underwriters
constituting the "Underwriters" with respect to such Underwriting Agreement
and such Securities). The Securities specified in such Underwriting Agreement
are referred to as the "Firm Designated Securities" with respect to such
Underwriting Agreement. If specified in such Underwriting Agreement, the
Designated Trust may grant the Underwriters the right to purchase at their
election an additional number of Securities, as provided in such Underwriting
Agreement as provided in Section 3 hereof (the "Option Designated
Securities"). The Firm Designated Securities and the Option Designated
Securities are collectively called the "Designated Securities." The proceeds
of the sale of the Designated Securities to the public and of the common
securities of the Designated Trust (the "Common Securities") to the Company
concurrently with the sale of the Designated Securities will be invested in
junior subordinated debentures of the Company (the "Subordinated Debentures")
identified in the Underwriting Agreement (with respect to such Underwriting
Agreement, the "Designated Subordinated Debentures"), to be issued pursuant to
the Indenture dated as of September 21, 1995 (the "Indenture") between the
Company and The Bank of New York, as trustee (the "Indenture Trustee"). The
Securities will be guaranteed by the Company to the extent set forth in a
guarantee agreement identified in the Underwriting Agreement (the "Designated
Guarantee" and any such Designated Guarantee, the "Guarantee") between the
Company and The Bank of New York, as trustee (the "Guarantee Trustee"). The
terms and rights of any particular issuance of Designated Securities will be
specified in the Underwriting Agreement and in or pursuant to the amended and
restated trust agreement identified in such Underwriting Agreement (with
respect to such Underwriting Agreement, the "Trust Agreement") among The Bank
of New York, as trustee (the "Property Trustee") and the other trustees named
therein (collectively with the Property Trustee, the "Trustees"). The
Securities, the Guarantee and the Subordinated Debentures are collectively
referred to herein as the "Offered Securities" and the Designated Securities,
the Designated Guarantee and the Designated Subordinated Debentures are
collectively referred to herein as the "Designated Offered Securities." The
Indenture, the Designated Subordinated Debenture, the Trust Agreement of the
Designated Trust and the Designated Guarantee are collectively referred to
herein as the "Company Agreements."
The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "Underwriting Agreement").
The Underwriting Agreement, including the provisions incorporated therein by
reference, is herein referred to as this Agreement.
The Company and the Trusts have filed with the Securities and
Exchange Commission (the "Commission") a registration statement, including a
prospectus, relating to the Offered Securities and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Designated Offered Securities
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"). The term "Registration Statement" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus"
means a preliminary prospectus supplement specifically relating to the
Designated Offered Securities, together with the Basic Prospectus. As used
herein, the terms "Basic Prospectus," "Prospectus" and "preliminary
prospectus" shall include in each case the documents, if any, incorporated by
reference therein. The terms "supplement" and "amendment" or "amend" as used
herein shall include all documents deemed to be incorporated by reference in
the Prospectus that are filed subsequent to the date of the Basic Prospectus
by the Company and the Trusts with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The term Contract Securities means the Designated Securities to be
purchased pursuant to the delayed delivery contracts substantially in the form
of Schedule I hereto, with such changes therein as the Company and the
Designated Trust may approve (the "Delayed Delivery Contracts"). The term
"Underwriters' Securities" means the Designated Securities other than Contract
Securities.
1. Representations and Warranties. Each of the Company and the
Designated Trust jointly and severally represents and warrants to each of the
Underwriters that:
(a) The Registration Statement has become effective under the
Securities Act; no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending before
or, to the Company's or the Designated Trust's knowledge, threatened by the
Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, (ii) each
part of the Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, will
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 not misleading, (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
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 under which
they were made, not misleading, except that the representations and warranties
set forth in this Section 1(b) do not apply (A) to statements or omissions in
the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through the Manager expressly for use therein or (B) to that part of the
Registration Statement that constitutes the Statements of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Indenture Trustee, the Property Trustee or the
Guarantee Trustee.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and
assets and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on
the financial condition or the results of operations of the Company and its
subsidiaries, taken as a whole.
(d) The Designated Trust has been duly created and is validly
existing in good standing as a business trust under the laws of the State of
Delaware, is and will be treated as a "grantor trust" for Federal income tax
purposes under existing law, has the business trust power and authority to
conduct its business as presently conducted and as described in the
Prospectus, and is not required to be authorized to do business in any other
jurisdiction.
(e) Each of R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco
International, Inc. and Nabisco, Inc. (collectively, the "Principal Operating
Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and
assets and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on
the financial condition or the results of operations of the Company and its
subsidiaries, taken as a whole.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and the Designated Trust.
(g) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally and of
general principles of equity, whether applied by a court of law or equity.
(h) The Designated Subordinated Debentures to be deposited in
the Designated Trust as trust assets in connection with offering of the
Designated Offered Securities have been duly and validly authorized and when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to the Designated Trust will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally and of
general principles of equity, whether applied by a court of law or equity.
(i) The Trust Agreement for the Designated Trust has been duly
qualified under the Trust Indenture Act and has been duly authorized by the
Company and, when executed and delivered by the Company and the Trustees, will
be a valid and binding obligation of the Company and the Trustees, enforceable
against the Company and the Trustees in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and to general principles of equity, whether applied by
a court of law or equity. The Designated Guarantee has been duly qualified
under the Trust Indenture Act and has been duly authorized by the Company and,
when executed and delivered by the Company and the Guarantee Trustee, will be
a valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting the
rights and remedies of creditors generally and of general principles of
equity, whether applied by a court of law or equity.
(j) The Designated Securities to be issued by the Designated
Trust have been duly authorized by the Designated Trust's Trust Agreement and,
when executed and authenticated in accordance with the provisions of such
Trust Agreement and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the case of the
Underwriters' Securities, or by institutional investors in accordance with the
terms of the Delayed Delivery Contracts, in the case of the Contract
Securities, will be validly issued and (subject to the terms of such Trust
Agreement) fully paid and nonassessable undivided beneficial interests in the
assets of the Designated Trust, not subject to any preemptive or similar
rights, and will conform to all statements relating thereto contained in the
Prospectus. Holders of Designated Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit.
(k) The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and the Designated Trust and are valid
and binding agreements of the Company and the Designated Trust, enforceable
against the Company and the Designated Trust in accordance with their
respective terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting the
rights and remedies of creditors generally and of general principles of
equity, whether applied by a court of law or equity.
(l) The Company and the Designated Trust are not in violation of
any provision of the certificate of incorporation or by-laws of the Company or
the Trust Agreement of the Designated Trust. The execution and delivery by
the Company and the Designated Trust of, the performance by the Company and the
Designated Trust of their obligations under, this Agreement, the Company
Agreements or the Delayed Delivery Contracts, the issuance and delivery by the
Designated Trust of the Designated Securities and the fulfillment of the terms
herein contemplated will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or the Trust Agreement
of the Designated Trust or any agreement or other instrument binding upon the
Company or any of its subsidiaries or the Designated Trust or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary or the Designated Trust, except for such
contraventions that would not, individually or in the aggregate, have a
material adverse effect on the financial condition or results of operations of
the Company and its subsidiaries taken as a whole, or the Designated Trust and
no consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company or
the Designated Trust of their obligations under this Agreement, the Company
Agreements or the Delayed Delivery Contracts and the issuance and delivery of
the Designated Securities, except as have been obtained under the Securities
Act, the Exchange Act and the Trust Indenture Act and except as such as may be
required by the securities or Blue Sky laws of the various states or other
jurisdictions in connection with the offer and sale of the Designated Offered
Securities.
(m) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the financial
condition or results of operations of the Company and its subsidiaries, taken
as a whole, or the Designated Trust from that set forth in the Prospectus.
(n) There are no legal or governmental proceedings pending or, to
the best of the Company's or the Designated Trust's knowledge, threatened to
which the Company or any of its subsidiaries or the Designated Trust is a
party or to which any of the properties of the Company or any of its
subsidiaries or the Designated Trust is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required.
(o) Neither the Company nor the Designated Trust is, or after
giving effect to the consummation of transactions contemplated by this
Agreement, will be, and neither the Company nor the Designated Trust is
directly or indirectly controlled by, or acting on behalf of any person which
is, an investment company within the meaning of the Investment Company Act of
1940, as amended.
(p) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198, Laws of Florida).
2. Delayed Delivery Contracts. If the Prospectus provides for
sales of Designated Securities pursuant to Delayed Delivery Contracts, the
Company and the Designated Trust hereby authorizes the Underwriters to solicit
offers to purchase Contract Securities on the terms and subject to the
conditions set forth in the Prospectus pursuant to Delayed Delivery Contracts.
Delayed Delivery Contracts may be entered into only with institutional
investors approved by the Company of the types set forth in the Prospectus.
On each Closing Date, the Company will pay to the Manager, by wire transfer of
immediately available funds to a bank account designated by the Manager, as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or
the performance of any Delayed Delivery Contracts.
If the Company and the Designated Trust executes and delivers
Delayed Delivery Contracts with institutional investors, the aggregate amount
of Designated Securities to be purchased by the several Underwriters shall be
reduced by the aggregate amount of Contract Securities; such reduction shall
be applied to the commitment of each Underwriter pro rata in proportion to the
amount of Designated Securities set forth opposite such Underwriter's name in
the Underwriting Agreement, except to the extent that the Manager determines
that such reduction shall be applied in other proportions and so advises the
Company; provided, however, that the total amount of Designated Securities to
be purchased by all Underwriters shall be the aggregate amount set forth
above, less the aggregate amount of Contract Securities.
3. Public Offering. The Company and the Designated Trust is
advised by the Manager that the Underwriters propose to make a public offering
of their respective portions of the Underwriters' Securities as soon after
this Agreement has been entered into as in the Manager's judgment is
advisable. The terms of the public offering of the Underwriters' Securities
are set forth in the Prospectus.
The Designated Trust may specify in the Underwriting Agreement
applicable to any Designated Securities that the Designated Trust thereby
grants to the Underwriters the right (an "Over-allotment Option") to purchase
at their election up to the number of Optional Designated Securities set forth
in such Underwriting Agreement, on the terms set forth in the paragraph above,
for the sole purpose of covering over-allotments in the sale of the
Underwriters' Securities. Any such election to purchase Optional Designated
Securities may be exercised by written notice from the Manager to the
Designated Trust and the Company, given within a period specified in the
Underwriting Agreement, setting forth the aggregate number of Optional
Designated Securities to be purchased and the date on which such Optional
Designated Securities are to be delivered, as determined by the Manager but in
no event earlier than the First Closing Date (as defined in Section 4 hereof)
or, unless the Manager, the Designated Trust and the Company otherwise agree
in writing, earlier than or later than the respective number of business days
after the date of such notice set forth in such Underwriting Agreement.
The number of Optional Designated Securities to be added to the
number of Underwriters' Securities to be purchased by each Underwriter as set
forth in Schedule I to the Underwriting Agreement applicable to such
Designated Securities shall be, in each case, the number of Optional Designated
Securities which the Designated Trust and the Company have been advised by the
Manager have been attributed to such Underwriter; provided that, if the
Designated Trust and the Company have not been so advised, the number of
Optional Designated Securities to be so added shall be, in each case, that
proportion of Optional Designated Securities which the number of Underwriters'
Securities to be purchased by such Underwriter under such Underwriting
Agreement bears to the aggregate number of Underwriters' Securities (rounded
as the Manager may determine to the nearest 100 securities). The total number
of Designated Securities to be purchased by all the Underwriters pursuant to
such Underwriting Agreement shall be the aggregate number of Underwriters'
Securities set forth in Schedule I to such Underwriting Agreement plus the
aggregate number of Optional Designated Securities which the Underwriters
elect to purchase.
As compensation to the Underwriters of the Underwriters'
Securities for their commitments hereunder and under the Underwriting
Agreement, and in view of the fact that the proceeds of the sale of the
Designated Securities will be used by the Designated Trust to purchase the
Designated Subordinated Debentures of the Company, the Company agrees to pay,
by wire transfer of immediately available funds to a bank account designated
by the Manager, at each Closing Date to the Manager, for the accounts of the
several Underwriters, the amount set forth in the Underwriting Agreement per
Underwriters' Security to be delivered at each Closing Date.
4. Purchase and Delivery. Except as otherwise provided in this
Section 4, payment for the Underwriters' Securities shall be made by certified
or official bank check or checks payable to the order of the Designated Trust
in New York Clearing House funds (or such other funds as are specified in the
Underwriting Agreement) at the time and place set forth in the Underwriting
Agreement, upon delivery to the Manager for the respective accounts of the
several Underwriters of the Underwriters' Securities, registered in such names
and in such denominations as the Manager shall request in writing not less
than two full business days prior to the date of delivery, with any transfer
taxes payable in connection with the transfer of the Underwriters' Securities
to the Underwriters duly paid.
Certificates for the Underwriters' Securities to be purchased by
each Underwriter pursuant to the Underwriting Agreement relating thereto, in
the form specified in such Underwriting Agreement, and in such authorized
denominations and registered in such names as the Manager may request upon at
least forty-eight hours' prior notice to the Designated Trust and the Company,
shall be delivered by or on behalf of the Designated Trust to the Manager for
the account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer of immediately
available funds to an account designated by the Designated Trust, (i) with
respect to the Firm Designated Securities, all in the manner and at the place
and time and date specified in such Underwriting Agreement or at such other
place and time and date as the Manager, the Designated Trust and the Company
may agree upon in writing. Such time and date being herein called the "First
Closing Date" and (ii) with respect to the Optional Designated Securities, if
any, in the manner and at the time and date specified by the Manager in the
written notice given by the Manager of the Underwriters' election to purchase
such Optional Designated Securities, or at such other time and date as the
Manager, the Designated Trust and the Company may agree upon in writing, such
time and date, if not the First Closing Date, herein called the "Second
Closing Date." Each such time and date for delivery is herein called a
"Closing Date."
5. Conditions to Closing. The several obligations of the
Underwriters hereunder on each Closing Date are subject to the following
conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to each Closing Date,
(i) there shall not have occurred any downgrading in the
rating accorded any securities of the Company or a Trust by any
"nationally recognized statistical rating organization," as that
term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act and no such organization shall have
revised its public announcements that it has under surveillance or
review, with possible negative implications, its rating of any
securities of the Company or a Trust; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus, that, in the judgment of the Manager, is material and
adverse and that makes it, in the judgment of the Manager,
impracticable to market the Designated Securities on the terms and
in the manner contemplated in the Prospectus.
(b) The Manager shall have received on each Closing Date a
certificate, dated such Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to the
effect that the representations and warranties of the Company contained
in this Agreement are true and correct in all material respects as of
such Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before such Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
(c) The Manager shall have received on each Closing Date a
certificate, dated such Closing Date and signed by a regular trustee of
the Designated Trust, to the effect that the representations and
warranties of the Designated Trust contained in this Agreement are true
and correct in all material respects as of such Closing Date and that
the Designated Trust has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
on or before such Closing Date.
The regular trustee signing and delivering such certificate may
rely upon the best of his knowledge as to proceedings threatened.
(d) The Manager shall have received on each Closing Date an
opinion of counsel for the Company and the Designated Trust, dated such
Closing Date, to the effect set forth in Exhibit A-1.
(e) The Manager shall have received on each Closing Date an
opinion of special Delaware counsel for the Company and the Designated
Trust, dated such Closing Date, to the effect set forth in Exhibit A-2.
(f) The Manager shall have received on each Closing Date an
opinion of counsel for the Underwriters, dated such Closing Date, to the
effect set forth in Exhibit B.
(g) The Manager shall have received on the date hereof and each
Closing Date a letter, dated such date, in form and substance
satisfactory to the Manager, from the Company's independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in or incorporated by reference into the
Prospectus.
6. Covenants of the Company and the Designated Trust. In further
consideration of the agreements of the Underwriters contained herein, each of
the Company and the Designated Trust covenants as follows:
(a) To furnish the Manager, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated
by reference therein and any supplements and amendments thereto or to
the Registration Statement as the Manager may reasonably request.
(b) Prior to the termination of the offering of the Designated
Offered Securities pursuant to this Agreement, before amending or
supplementing the Registration Statement or the Prospectus with respect
to the Designated Offered Securities, to furnish to the Manager a copy
of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects;
provided, however, that the foregoing requirement shall not apply to any
of the Company's periodic filings with the Commission required to be
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
copies of which filings the Company will cause to be delivered to the
Manager promptly after being transmitted for filing with the Commission.
(c) If, during such period after the first date of the public
offering of the Designated Offered Securities as in the opinion of
counsel for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters, and to
the dealers (whose names and addresses the Manager will furnish to the
Company) to which Designated Securities may have been sold by the
Manager on behalf of the Underwriters and to any other dealer upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as so amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Designated Offered Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Manager shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in connection
with such qualification and in connection with any review of the
offering of the Designated Offered Securities by the National
Association of Securities Dealers, Inc. (the "NASD"), provided that
neither the Company nor the Designated Trust shall be obligated to so
qualify the Designated Offered Securities if such qualification requires
it to file any general consent to service of process or to register or
qualify as a foreign corporation in any jurisdiction in which it is not
so registered or qualified.
(e) To make generally available to the Company's security holders
and to the Manager as soon as practicable an earning statement covering
a twelve month period beginning on the first day of the first full
fiscal quarter after the date of this Agreement, which earning statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(f) To use its best efforts to effect the listing of the
Designated Securities on the New York Stock Exchange ("NYSE"), subject
to official notice of issuance, as soon as practicable after the date of
this Agreement.
(g) During the period beginning on the date of the Underwriting
Agreement for such Designated Securities and continuing to and including
the date which is forty-five days after the last Closing Date for such
Designated Securities, not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any Securities, any other
beneficial interests in the assets of any Trust or any preferred
securities or any other securities of any Trust or the Company, as the
case may be, that are substantially similar to such Designated Securities
(including any guarantee of such securities) or any securities that are
convertible into or exchangeable for, or that represent the right to
receive Securities, such beneficial interests or such preferred
securities or any such substantially similar securities of any Trust or
the Company without the prior written consent of the Manager.
(h) To pay all costs and expenses incurred in connection with
the performance of its obligations in connection with this Agreement
including, without limitation, (i) the preparation, printing and filing
of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the preliminary
prospectuses, the Prospectus and any amendments or supplements to any of
the foregoing, and the cost of furnishing copies thereof to the
Underwriters, (ii) the preparation and distribution of this Agreement
and any Blue Sky surveys and the preparation and printing of certificates
for the Designated Securities, (iii) the fees and disbursements of
counsel to the Company and the Designated Trust and the Company's and
the Designated Trust's accountants, (iv) the qualification of the
Designated Offered Securities under the applicable securities laws in
accordance with Section 6(d) and any filing for review with the NASD
(including filing fees and fees and disbursements of counsel for the
Manager in connection with such filing with the NASD), (vi) the fees and
expenses of the Trustees of the Designated Trust and (vii) all other
costs and expenses incident to the offering of the Designated Offered
Securities incurred by the Designated Trust and the Company and its
subsidiaries.
7. Indemnification and Contribution. The Company and the
Designated Trust jointly and severally agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls such Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
the Manager expressly for use therein; provided that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Designated Securities, or any person
controlling such Underwriter, if it shall be established that a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
copies of the Prospectus as then amended or supplemented in compliance with
Section 6(a) hereof) was not sent or given by or on behalf of such
Underwriter, to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Designated Securities
to such person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such losses, claims, damages or
liabilities.
Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless (i) the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and (ii) the Designated Trust and its trustees to the same
extent as the foregoing indemnity from the Company and the Designated Trust to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company by such Underwriter in writing through
the Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed
as they are incurred. Such firm shall be designated in writing by the
Manager, in the case of parties indemnified pursuant to the second preceding
paragraph, and by the Company, in the case of parties indemnified pursuant to
the first preceding paragraph. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first or second
paragraph in this Section 7 is unavailable to an indemnified party in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Designated Trust on the one hand and
the Underwriters on the other hand from the offering of the Designated Offered
Securities 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 Company and the Designated Trust on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits
received by the Company and the Designated Trust on the one hand and the
Underwriters on the other hand in connection with the offering of the
Designated Offered Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Designated Offered
Securities (before deducting expenses) received by the Company and/or the
Designated Trust and the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover of
the Prospectus Supplement, bear to the aggregate public offering price of the
Designated Securities. The relative fault of the Company on the one hand and
of the Underwriters on the other hand 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
relates to information supplied by the Company or the Designated Trust or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective liquidation amounts of
Designated Securities they have purchased hereunder, and not joint.
The Company, the Designated Trust and the Underwriters agree that
it would not be just or equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company contained
herein shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its directors or officers or any person controlling the
Company or the Designated Trust or its trustees and (iii) acceptance of and
payment for any of the Designated Securities.
8. Termination. This Agreement shall be subject to termination,
by notice given by the Manager to the Company and the Designated Trust, if (a)
after the execution and delivery of the Underwriting Agreement and prior to
the First Closing Date (i) trading in securities generally on the New York
Stock Exchange shall have been suspended or materially limited, (ii) trading
in debt or equity securities of the Company or a Trust on the New York Stock
Exchange shall have been suspended or materially limited, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis, which event is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in the reasonable judgment of the Manager, impracticable to market the
Designated Securities on the terms and in the manner contemplated in the
Prospectus.
9. Defaulting Underwriters. If, on a Closing Date, any one or
more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate amount of the Underwriters' Securities to
be purchased on such date, the other Underwriters shall be obligated severally
in the proportions that the amount of Underwriters' Securities set forth
opposite their respective names above bears to the aggregate amount of
Underwriters' Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the amount of Underwriters' Securities
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such amount of Underwriters' Securities without the written consent of such
Underwriter. If, on a Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Underwriters' Securities and the aggregate amount of
Underwriters' Securities with respect to which such default occurs is more
than one-tenth of the aggregate amount of Underwriters' Securities to be
purchased on such date, and arrangements satisfactory to the Manager and the
Company for the purchase of such Underwriters' Securities are not made within
36 hours after such default, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter, the Company or the Designated
Trust. In any such case either the Manager or the Company shall have the
right to postpone such Closing Date but in no event for longer then seven
days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company or the
Designated Trust to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason (other than termination due to the
preceding paragraph or Section 8 hereof) the Company or the Designated Trust
shall be unable to perform their obligations under this Agreement, the Company
will reimburse the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the
offering of the Designated Offered Securities, provided that the Company shall
have no further liability to any Underwriter except as provided in Section 7
hereof and with respect to the payment of expenses referred to in paragraph
(d) of Section 6 hereof.
10. Miscellaneous. The Underwriting Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
11. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Exhibit A-1
Opinion of
Counsel for the Company
The opinion of counsel for the Company, to be delivered pursuant
to Section 5(d) of the Underwriting Agreement shall be to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and
assets and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a whole;
(ii) each Principal Operating Subsidiary has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and assets and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the Underwriting Agreement and the Company Agreements have
been duly authorized, executed and delivered by the Company;
(iv) the Indenture, the Trust Agreement and the Designated
Guarantee have been duly qualified under the Trust Indenture Act and the
Indenture and the Designated Guarantee are valid and binding agreements
of the Company, enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
affecting the rights and remedies of creditors generally and of general
principles of equity, whether applied by a court of law or equity;
(v) when executed and authenticated in accordance with the
provisions of the Indenture and delivered to the Designated Trust,
the Designated Subordinate Debentures will be entitled to the
benefits of the Indenture and will be valid and binding obligations
of the Company enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
affecting the rights and remedies of creditors generally and of
general principles of equity, whether applied by a court of law or
equity;
(vi) the Company and the Designated Trust are not in violation of
any provision of the certificate of incorporation or by-laws of the
Company or the Trust Agreement of the Designated Trust; and the execution
and delivery by the Company and the Designated Trust of, the performance
by the Company and the Designated Trust of their obligations under, this
Agreement, the Company Agreements or the Delayed Delivery Contracts, the
issuance and delivery by the Designated Trust of the Designated
Securities and the fulfillment of the terms herein contemplated will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or the Trust Agreement of the
Designated Trust or any agreement or other instrument binding upon the
Company or any of its subsidiaries or the Designated Trust that is
material to the Company and its subsidiaries, taken as a whole, or the
Designated Trust or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary or the Designated
Trust, except for such contraventions that would not, individually or in
the aggregate, have a material adverse effect on the financial condition
or results of operations of the Company and its subsidiaries taken as a
whole or the Designated Trust, and no consent, approval, authorization
or order of or qualification with any governmental body or agency is
required for the performance by the Company or the Designated Trust of
their obligations under the Underwriting Agreement, the Company
Agreements or the Delayed Delivery Contracts or the issuance and delivery
of the Designated Securities, except such as may be required by the
securities or Blue Sky laws of the various states or other jurisdictions
in connection with the offer and sale of the Designated Offered
Securities;
(vii) the statements in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the Junior
Subordinated Debentures," "Description of the Junior Subordinated Debt
Securities," "Description of the Guarantee," "Description of the
Preferred Securities Guarantees" and "ERISA Matters," insofar as such
statements constitute summaries of the legal matters or documents
referred to therein are accurate in all material respects;
(viii) such counsel confirms its opinions in the Prospectus under
the caption "Taxation";
(ix) neither the Company nor the Designated Trust is, or after
giving effect to the consummation of transactions contemplated by this
Agreement, will be, and neither the Company nor the Designated Trust is
directly or indirectly controlled by, or acting on behalf of any person
which is, an investment company within the meaning of the Investment
Company Act of 1940, as amended;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries or the Designated Trust is a party or to which
any of the properties or assets of the Company or any of its
subsidiaries or the Designated Trust is subject that is required to be
described in the Registration Statement or the Prospectus and is not so
described or of any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(xi) such counsel (1) is of the opinion that each document, if any,
filed pursuant to the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and schedules included
therein as to which such counsel need not express any opinion) complied
when so filed as to form in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder,
(2) has no reason to believe that (except for financial statements and
schedules as to which such counsel need not express any belief and
except for that part of the Registration Statement that constitutes the
Statements of Eligibility and Qualification (Form T-1) of the Indenture
Trustee, the Property Trustee or the Guarantee Trustee under the Trust
Indenture Act) each part of the Registration Statement, when such part
became effective contained, and as of the date such opinion is
delivered, contains any untrue statement of a material fact or, when
such part became effective, omitted or, as of the date such opinion is
delivered, omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (3) is of
the opinion that the Registration Statement and Prospectus (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion and except for that part of the
Registration Statement that constitutes the Statements of Eligibility and
Qualification (Form T-1) of the Indenture Trustee, the Property Trustee
or the Guarantee Trustee under the Trust Indenture Act) comply as to
form in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (4) has no reason
to believe that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of the
date such opinion is delivered contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may rely as to certain
matters of fact on certificates of officers of the Company and of public
officials and may state that such counsel expresses no opinion as to the
laws of any jurisdiction other than the State of New York, the federal
law of the United States and the Delaware General Corporation Law.
The opinion of counsel for the Company (other than an opinion of
an officer of the Company) shall be rendered to you at the request of
the Company and shall so state therein.
With respect to paragraph (xi) above, counsel for the Company may
state that such counsel's opinion and belief are based upon such counsel's
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
Exhibit A-2
Opinion of
Special Delaware Counsel
for the Company
The opinion of special Delaware counsel for the Company, to be
delivered pursuant to Section 5(e) of the Underwriting Agreement shall be to
the effect that:
(i) the Designated Trust has been duly organized and is validly
existing in good standing as a business trust under the laws of the
State of Delaware and has the business trust power and authority to
conduct its business as described in the Prospectus;
(ii) the Trust Agreement is a legal, valid and binding
agreement of the Company and the Trustees, enforceable against the
Company and the Trustees in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, receivership,
fraudulent conveyance, moratorium and other similar laws affecting
the rights and remedies of creditors generally as from time to time
in effect, general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
and considerations of public policy or the effect of applicable law
relating to fiduciary duties;
(iii) under the Trust Agreement for the Designated Trust and
the laws of the State of Delaware, the execution and delivery of the
Underwriting Agreement and the Delayed Delivery Contracts by the
Designated Trust, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all requisite business trust
action on the part of the Trust;
(iv) the Designated Securities have been duly authorized by the
Trust Agreement of the Designated Trust and are duly and validly
issued and, subject to the terms of such Trust Agreement, fully paid
and nonassessable beneficial interests in the Designated Trust. The
holders of Designated Securities will be, subject to the terms of the
Trust Agreement of the Designated Trust, 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; and
(v) under the Trust Agreement for the Designated Trust and the
laws of the State of Delaware, the issuance of the Designated
Securities is not subject to preemptive rights.
Exhibit B
Opinion of
Counsel for the Underwriters
The opinion of counsel for the Underwriters, to be delivered
pursuant to Section 5(f) of the Underwriting Agreement shall be to the effect
that:
(i) the Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of Delaware;
(ii) the Underwriting Agreement, the Company Agreements and the
Delayed Delivery Contracts have been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and, assuming due authorization, execution and delivery
by the Indenture Trustee, is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing;
(iv) the Delayed Delivery Contracts are valid and binding
agreements of the Company, enforceable against the Company in
accordance with their respective terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing;
(v) assuming due authentication thereof by the Indenture
Trustee and upon payment and delivery in accordance with the terms of
the Trust Agreement for the Designated Trust, the Designated
Subordinated Debentures will constitute valid and legally binding
obligations of the Company, in each case enforceable against the
Company in accordance with their respective terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing;
(vi) The Designated Guarantee has been duly qualified under
the Trust Indenture Act and, upon valid issuance and delivery of the
Designated Securities in accordance with the Underwriting Agreement,
will constitute a valid and legally binding instrument of the Company
enforceable against the Company in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing;
(vii) The Trust Agreement has been duly qualified under the
Trust Indenture Act and, assuming due authorization, execution and
delivery thereof by the Trustees, the Trust Agreement constitutes a
valid and legally binding instrument of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with
its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing;
(viii) The Designated Securities have been duly authorized
under the Trust Agreement and, upon payment and delivery in
accordance with the Underwriting Agreement, will be validly issued
and, subject to the terms of the Trust Agreement, fully paid and
nonassessable beneficial interests in the Designated Trust;
(ix) the statements in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the Junior
Subordinated Debentures," "Description of the Junior Subordinated
Debt Securities," "Description of the Guarantee," and "Description of
the Preferred Securities Guarantees," insofar as they purport to
constitute summaries of certain terms of documents therein,
constitute accurate summaries of the terms of such documents in all
material respects; and
(x) such counsel (1) has no reason to believe that (except for
financial statements and schedules as to which such counsel need not
express any belief and except for that part of the Registration
Statement that constitutes the Form T-1 heretofore referred to) each
part of the Registration Statement, when such part became effective
contained, and as of the date such opinion is delivered, contains any
untrue statement of a material fact or, when such part became
effective, omitted or, as of the date such opinion is delivered,
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (2) is of
the opinion that the Registration Statement and Prospectus (except
for financial statements and schedules included therein as to which
such counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (3) has no reason to
believe that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of
the date such opinion is delivered contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
With respect to clause (x) above, such counsel may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and the Prospectus and any amendments or
supplements thereto (other than the documents incorporated by reference) and
upon review and discussion of the contents thereof (including documents
incorporated by reference) but are without independent check or verification,
except as specified. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State
of New York, and the Federal law of the United States and the corporate law of
the State of Delaware, upon the opinions of counsel satisfactory to the
Manager. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and the Designated Trust and
certificates of public officials.
Schedule I
DELAYED DELIVERY CONTRACT
________, 199_
Dear Sirs:
The undersigned hereby agrees to purchase from RJR Nabisco
Holdings Capital Trust __, a statutory business trust (the "Trust") formed by
RJR Nabisco Holdings Corp., a Delaware corporation (the "Company"), under the
laws of the State of Delaware, and the Trust agrees to sell to the undersigned
the Trust's preferred securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's and the Trust's Prospectus dated
__________________, 19__ and Prospectus Supplement dated ________________,
19__, receipt of copies of which are hereby acknowledged, at a purchase price
stated in Schedule A and on the further terms and conditions set forth in this
Agreement. The undersigned does not contemplate selling Securities prior to
making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amount and numbers on the delivery dates set forth in Schedule A.
Each such date on which Securities are to be purchased hereunder is
hereinafter referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Trust or its order by
certified or official bank check in New York Clearing House funds at the
office of ______________________________, New York, N.Y., at 10:00 A.M. (New
York time) on the Delivery Date, upon delivery to the undersigned of the
Securities to be purchased by the undersigned on the Delivery Date, in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company and the Trust
not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for the Securities on the Delivery Date shall be subject to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Trust shall have
sold, and delivery shall have taken place to the underwriters (the
"Underwriters") named in the Prospectus Supplement referred to above of, such
part of the Securities as is to be sold to them. Promptly after completion of
sale and delivery to the Underwriters, the Company and the Trust will mail or
deliver to the undersigned as its address set forth below notice to such
effect, accompanied by a copy of the opinions of counsel for the Company and
the Trust delivered to the Underwriters in connection therewith.
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this Agreement.
This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
If this Agreement is acceptable to the Company and the Trust, it
is requested that the Company and the Trust sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding agreement, as of the date
first above written, between the Company and the Trust on the one hand and the
undersigned on the other hand when such counterpart is so mailed or delivered.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Yours very truly,
---------------------------
(Purchaser)
By
------------------------
---------------------------
(Title)
---------------------------
---------------------------
(Address)
Accepted:
RJR Nabisco Holdings Corp.
By
--------------------------------
RJR Nabisco Holdings Capital Trust __
By: RJR Nabisco Holdings
Corp., as sponsor
By
--------------------------------
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
is as follows: (Please print.)
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
---------------- --------------- -----------------
SCHEDULE A
----------
Securities:
- ----------
Liquidation Amounts or Numbers to be Purchased:
- ----------------------------------------------
Purchase Price:
- --------------
Delivery Dates:
- --------------
UNDERWRITING AGREEMENT
_________, 199_
RJR NABISCO HOLDINGS CORP.
RJR NABISCO HOLDINGS CAPITAL TRUST __
1301 Avenue of the Americas
New York, New York 10019
Dear Ladies and Gentlemen:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or
underwriters being herein called the "Underwriters"), and we understand that
RJR NABISCO HOLDINGS CAPITAL TRUST __, a statutory business trust (the
"Designated Trust") formed by RJR Nabisco Holdings Corp., a Delaware
corporation (the "Company"), under the laws of the State of Delaware, proposes
to issue and sell [number of Preferred Securities] of the Trust's __% Trust
Originated Preferred Securities, liquidation amount $___ per Preferred
Security (the "Designated Securities"). The Designated Securities will be
issued pursuant to the provisions of the Amended and Restated Trust Agreement
dated as of ______, 199_ (the "Trust Agreement") between the Company, as
sponsor, The Bank of New York, as trustee, and the other trustees named
therein. The principal asset of the Designated Trust will consist of
[$_______] aggregate principal amount of the Company's _% Junior Subordinated
Debentures (the "Designated Subordinated Debentures"). The Designated
Securities will be guaranteed by the Company to the extent set forth in the
Guarantee Agreement dated as of ________ __, 199_ between the Company and The
Bank of New York, as trustee.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Designated Trust hereby agrees to sell and the
Underwriters agree to purchase, severally and not jointly, the respective
number of Designated Securities set forth below opposite their names at a
purchase price of $____ per Designated Security [, plus accrued distributions,
if any, from the date of the Designated Securities] to the date of payment and
delivery.(1)
- ------------
(1) To be added only if the transaction does not close flat.
Number of
Name Designated Securities
---- ---------------------
[Insert syndicate list]
Total . . . . . .
============
[The number of Designated Securities to be purchased by the
several Underwriters shall be reduced by the number of Designated Securities
sold pursuant to delayed delivery contracts.](2)
The Underwriters will pay for the Designated Securities [(less any
Designated Securities sold pursuant to delayed delivery contracts)] upon
delivery thereof at [office] at _______ a.m. (New York time) on __________,
199_, or at such other time, not later than 5:00 p.m. (New York time) on
__________, 199_, as shall be designated by the Manager. The time and date of
such payment and delivery are hereinafter referred to as the Closing Date.(3)
The Designated Securities shall have the terms set forth in the
Prospectus dated ___________, 199_, and the Prospectus Supplement dated
_________, 199_, including the following:
- ------------
(2) To be added only if delayed delivery contracts are contemplated.
(3) This paragraph would have to be modified if the Designated Trust
grants the Underwriters an Over-allotment Option.
Terms of Designated Securities
Maturity Date:
Distribution Rate:
Redemption Provisions:
Distribution Payment Dates: _____, ___, __ and
_______ commencing
_____________ ____
[(Distributions accrue from
_______________, 199_)(4)
- ------------
(4) To be added only if the transaction does not close flat.
Form and Denomination:
[Other Terms:]
[The commission to be paid to the Underwriters in respect of the
Designated Securities purchased pursuant to delayed delivery contracts
arranged by the Underwriters shall be ___% of the liquidation amount of the
Designated Securities so purchased.](5)
- ------------
(5) To be added only if delayed delivery contacts are contemplated.
All provisions contained in the document entitled RJR NABISCO
HOLDINGS CORP., RJR NABISCO HOLDINGS CAPITAL TRUSTS Underwriting Agreement
Standard Provisions dated ______ __, 1998, a copy of which is attached
hereto, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that if any term
defined in such document is otherwise defined herein, the definition set
forth herein shall control.
Please confirm your agreement by having an authorized officer sign
a copy of this Agreement in the space set forth below.
Very truly yours,
LEAD MANAGER
[Name of Other Lead Managers]
Acting severally on behalf of themselves
and the several Underwriters named herein
By: LEAD MANAGER
By:
--------------------------
Name:
Title:
Accepted:
RJR NABISCO HOLDINGS CORP.
By
------------------------
RJR NABISCO HOLDINGS CAPITAL TRUST __
By: RJR Nabisco Holdings
Corp., as sponsor
By
------------------------
Exhibit 4.15
==============================================================================
RJR NABISCO HOLDINGS CORP.
GUARANTEE AGREEMENT
------------
Dated as of __________, 199_
------------
==============================================================================
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of __________, 199_, is
executed and delivered by RJR Nabisco Holdings Corp., a Delaware corporation
(the "Guarantor"), and The Bank of New York as the initial Guarantee Trustee
(as defined herein) for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of RJR Nabisco
Holdings Capital Trust ___, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ______________, 199_ among the trustees
of the Issuer named therein, RJR Nabisco Holdings Corp., as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer is issuing up to _______________ aggregate liquidation
amount of its _____% Trust Originated Preferred Securities (the "Preferred
Securities") representing undivided beneficial interests in the assets of the
Issuer and having the terms set forth in Exhibit B to the Declaration, of which
$_____________ liquidation amount of Preferred Securities are being issued as
of the date hereof. Up to the remaining $____________ liquidation amount of
Preferred Securities may be issued by the Issuer if and to the extent that the
over-allotment option in the Underwriting Agreement (as defined in the
Declaration) is exercised by the Underwriters named therein.
WHEREAS, the Preferred Securities will be issued by the Issuer
upon deposit of the Guarantor's Debentures (as defined herein) with the Issuer
as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
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 the initial
purchasers thereof of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Guarantee Agreement for the benefit of the Holders from time to time of
the Preferred Securities.
ARTICLE 1
Definitions
Section 1.1. Definitions. (a) Capitalized terms used in this
Guarantee Agreement but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"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.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated Debentures
issued by the Guarantor under the Indenture and entitled the "_____% Junior
Subordinated Debentures due ____".
"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
"Financing Entity" means any trust, partnership or other entity
affiliated with Holdings which is a financing vehicle of Holdings.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if
and to the extent that in each case the Guarantor has made a payment to the
Trust of interest, premium, if any, or principal on the Debentures and (ii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to Holders
or the redemption of all the Preferred Securities upon the maturity or
redemption of the Debentures as provided in the Declaration), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Issuer has funds available therefor, or (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate
of the Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of September 21, 1995
between the Guarantor and The Bank of New York, as trustee, as supplemented by
the First Supplemental Indenture thereto dated as of September 21, 1995 and
the Second Supplemental Indenture thereto dated as of ___________ 199___,
pursuant to which the Debentures are to be issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"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.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Redemption Price" means the amount payable on redemption of the
Preferred Securities in accordance with the terms of the Preferred Securities.
"Responsible Officer" means, with respect to the Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers 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 Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Section
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control; and
(c) the application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing undivided beneficial interests in the assets of the
Issuer.
Section 2.2. Lists of Holders of Preferred Securities.
(a) The Guarantor shall provide the Guarantee Trustee with such
information as is required under Section 312(a) of the Trust Indenture Act at
the times and in the manner provided in Section 312(a); and
(b) the Guarantee Trustee shall comply with its obligations under
Section Section 310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.3. Reports By The Guarantee Trustee. Within 60 days
after May 15 of each year, the Guarantee Trustee shall provide to the Holders
of the Preferred Securities such reports as are required by Section 313 of
the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.4. Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Commission and the
Holders of the Preferred Securities, as applicable, such documents, reports
and information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4)
and (c) of the Trust Indenture Act, any such certificates to be provided in
the form, in the manner and at the times required by Section 314(a)(4) and
(c) of the Trust Indenture Act (provided that any certificate to be provided
pursuant to Section 314(a)(4) of the Trust Indenture Act shall be provided
within 120 days of the end of each fiscal year of the Issuer).
Section 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Guarantee Agreement which 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 pursuant to Section 314(c) shall comply with Section 314(e) of the
Trust Indenture Act.
Section 2.6. Events of Default; Waiver. (a) Subject to Section
2.06(b), Holders of Preferred Securities may by vote of at least a Majority in
liquidation amount of the Preferred Securities, (A) direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon by the Guarantee
Trustee or (B) on behalf of the Holders of all Preferred Securities waive any
past Event of Default and its consequences. Upon such waiver, any such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement,
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to receive
payment of the Guarantee Payments in accordance with this Guarantee Agreement,
or to institute suit for the enforcement of any such payment, shall not be
impaired without the consent of each such Holder.
Section 2.7. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Preferred
Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
Section 2.8. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE 3
Powers, Duties and Rights of Guarantee Trustee
Section 3.1. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee Agreement shall be held by the Guarantee Trustee in trust for
the benefit of the Holders of the Preferred Securities. The Guarantee Trustee
shall not transfer its right, title and interest in the Guarantee Agreement to
any Person except a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee or to a
Holder of Preferred Securities exercising his or her rights pursuant to Section
5.04. The right, title and interest of the Guarantee Trustee to the Guarantee
Agreement shall vest automatically in each Person who may hereafter be
appointed as Guarantee Trustee in accordance with Article 4. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders
of the Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the Trust
hereunder in respect of the Guarantee Payments will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of, or
for the benefit of that Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known to
the Guarantee Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that the Guarantee Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers, of the Guarantee Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Preferred
Securities. The Guarantee Trustee shall not be deemed to have knowledge of
any default except any default as to which the Guarantee Trustee shall have
received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice.
(e) The Guarantee Trustee shall not resign as a Trustee unless a
Successor Guarantee Trustee has been appointed and accepted that appointment
in accordance with Article 4.
Section 3.2. Certain Rights and Duties of the Guarantee
Trustee. (a) The Guarantee Trustee, before the occurrence of an 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 Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06(a)), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, 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.
(b) No provision of this Guarantee Agreement shall be construed to
relieve the 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 an 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 Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the 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 Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts;
(iii) the 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 Preferred
Securities as provided herein relating to the time, method and
place of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the 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 it shall have reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to
it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon a
certificate, which shall comply with the provisions of Section
314(e) of the Trust Indenture Act, signed by any authorized
officers of the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel
(which may be counsel to either Guarantor or any of its
Affiliates and may include any of its employees) selected by it
in good faith and with due care and the written 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
reliance thereon and in accordance with such advice and opinion
and (B) shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from
any court of competent jurisdiction;
(iii) the Guarantee 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 Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed by it in good faith and
with due care;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holders of
Preferred Securities, unless such Holders shall have offered to
the Guarantee Trustee reasonable security and indemnity against
the costs, expenses (including its attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with
such request or direction; provided that nothing contained in
this clause (iv) shall relieve the Guarantee Trustee of the
obligation, upon the occurrence of an Event of Default (which has
not been cured or waived) to exercise such of the rights and
powers vested in it by this Guarantee Agreement, and to use the
same degree of care and skill in this exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs; and
(v) any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred
Securities and the signature of the Guarantee 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 Guarantee Trustee to so act, or as to its
compliance with any of the terms and provisions of this Guarantee
Agreement, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action.
Section 3.3. Not Responsible for Recitals or Issuance. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee Agreement.
ARTICLE 4
Guarantee Trustee
Section 4.1. Qualifications. (a) There shall at all times
be a Guarantee Trustee which shall:
(i) not be an Affiliate of either 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 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 $50,000,000, 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.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i)-(ii) above, the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02. If the
Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
and the 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 Guarantee
Trustee.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by either Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office
until his successor shall have been appointed or until its removal or
resignation.
(d) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that no such resignation of the
Guarantee Trustee shall be effective until a Successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01(a)
has been appointed and has accepted such appointment by instrument executed
by such Successor Guarantee Trustee and delivered to Guarantor and the
resigning Guarantee Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Guarantee
Trustee.
ARTICLE 5
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) regardless of
any defense, right of set-off or counterclaim which 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. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement 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 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 Guarantee
Agreement 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 Preferred Securities 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 Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures), Redemption Price, Liquidation Distribution (as
defined in the Declaration) or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(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 Preferred
Securities, 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 Preferred
Securities;
(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 5.03 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. Enforcement of Guarantee. The Guarantor and the
Guarantee Trustee expressly acknowledge that (i) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this Guarantee Agreement including the giving of
directions to the Guarantee Trustee, or exercising any trust or other power
conferred upon the Guarantee Trustee under this Guarantee Agreement, and (iv)
if the Guarantee Trustee fails to enforce this Guarantee Agreement, any Holder
of Preferred Securities may institute a legal proceeding directly against
either or both of the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee, or any other Person.
Section 5.5. Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not merely of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments
in full (without duplication of amounts theretofore paid by the Issuer).
Section 5.6. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agree 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 their obligations hereunder are independent of the
obligations of the Issuer with respect to the Preferred Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6
Limitation of Transactions; Subordination
Section 6.1. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
any dividend on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common or preferred stock, or
make any guarantee payments with respect thereto, if at such time (a) the
Guarantor shall be in default with respect to its payment obligations
hereunder, (b) there shall have occurred an event of default under the
Declaration or (c) the Guarantor shall have given notice of its election of an
Extended Interest Payment Period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; provided that Holdings will
be permitted to pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion, other than at the option of Holdings, of any preferred
stock, including its ESOP Convertible Preferred Stock, in accordance with the
terms of such stock. In addition, so long as any Preferred Securities remain
outstanding, the Guarantor (i) will remain the sole direct or indirect owner
of all of the outstanding Common Securities and shall not cause or permit the
Common Securities to be transferred except to the extent such transfer is
permitted under Section 9.01(c) of the Declaration; provided that any
permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's direct or indirect ownership of the Common Securities and (ii)
will use reasonable efforts to cause the Issuer to continue to be treated as a
grantor trust for United States federal income tax purposes except in
connection with a distribution of Debentures as provided in the Declaration.
Section 6.2. Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i) pari
passu in right of payment with Holdings' obligations under this Guarantee
Agreement and guarantees of preferred securities of any Financing Entity, (ii)
subordinate and junior in right of payment to all Senior Indebtedness of the
Guarantor, except obligations made pari passu or subordinate by their terms,
and the Debentures, (ii) senior to all capital stock now or hereafter issued by
the Guarantor and to any guarantee now or hereafter entered into by the
Guarantor in respect of any of its capital stock.
ARTICLE 7
Termination
Section 7.1. Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon full payment of the
Redemption Price of all Preferred Securities, upon the distribution of
Debentures to Holders of Preferred Securities and Common Securities in
exchange for all of the Preferred Securities and Common Securities, or upon
full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement 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 with
respect to the Preferred Securities or this Guarantee Agreement.
ARTICLE 8
Limitation of Liability; Indemnification
Section 8.1. 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 and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee Agreement 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 either 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 of Preferred
Securities might properly be paid.
Section 8.2. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.02(a).
ARTICLE 9
Miscellaneous
Section 9.1. Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under the Indenture, the Guarantor
shall not assign its obligations hereunder.
Section 9.2. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities. The provisions of Section
12.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
Section 9.3. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Facsimile No: (212) 969-9198
Attention: H. Colin McBride
(b) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice to the
Holders:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administrator
(c) if given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All notices hereunder 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 9.4. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
Section 9.5. Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
Section 9.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 9.7. Counterparts. This Guarantee Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
RJR NABISCO HOLDINGS CORP.
By:
-----------------------------------
Name: John J. Delucca
Title: Senior Vice President and
Treasurer
THE BANK OF NEW YORK,
As Guarantee Trustee
By:
-----------------------------------
Name:
Title:
- ------------------------------------------------------------------------------
RJR NABISCO HOLDINGS CORP.
AND
THE BANK OF NEW YORK
as Trustee
------------------------------
[ ] SUPPLEMENTAL INDENTURE
Dated as of __________, 199__
TO
INDENTURE
Dated as of __________, 199__
------------------------------
o% Junior Subordinated Debentures
Due 20___
- ------------------------------------------------------------------------------
[ ] SUPPLEMENTAL INDENTURE, dated as of the ___ day of
___________, 199__ (the "[ ] Supplemental Indenture"), between RJR NABISCO
HOLDINGS CORP., a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter sometimes referred to as "Holdings"),
and The Bank of New York, a New York banking corporation, as trustee
(hereinafter sometimes referred to as the "Trustee") under the Indenture
dated as of September 21, 1995 between Holdings and the Trustee, as
supplemented by the First Supplemental Indenture dated as of September 21,
1995 between Holdings and the Trustee (said Indenture as so supplemented
being hereinafter referred to as the "Indenture"). All terms used and not
defined herein are used as defined in the Indenture.
WHEREAS, Holdings has executed and delivered the Indenture to
the Trustee to provide for the future issuance of its notes, debentures and
other evidences of indebtedness (the "Securities"), said Securities to be
issued from time to time in series as might be determined by Holdings under
the Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, Holdings
desires to provide for the establishment of a series of its junior
subordinated debentures ("Debentures") to be known as its __% Junior
Subordinated Debentures Due 20___ (said series being hereinafter referred
to as the "Junior Subordinated Debentures"), the form and substance of such
Junior Subordinated Debentures and the terms, provisions and conditions
thereof to be as provided in the Indenture and this o Supplemental
Indenture; and
WHEREAS, Holdings has caused to be formed RJR Nabisco Holdings
Capital Trust ___ (the "Trust") as a statutory business trust under the
Business Trust Act of the State of Delaware (12 Del. Code Section 3801 et
seq.) pursuant to a declaration of trust dated August 5, 1998 (the
"Original Declaration") and the filing of a certificate of trust with the
Secretary of State of the State of Delaware on August 6, 1998; and
WHEREAS, the Original Declaration has been amended and restated
in its entirety pursuant to an Amended and Restated Declaration of Trust dated
as of ____________, 199__ (such Amended and Restated Declaration of Trust,
as amended from time to time, the "Declaration of Trust") with The Bank of
New York, as Institutional Trustee; and
WHEREAS, the Trust desires to issue its __% Trust Originated
Preferred Securities (the "Preferred Securities") and sell such Preferred
Securities to initial purchasers; and
WHEREAS, pursuant to the Preferred Securities Guarantee (the
"Preferred Securities Guarantees"), Holdings has irrevocably and
unconditionally guaranteed, to the extent set forth therein, to pay in full,
to the holders of the Preferred Securities, the Guarantee Payments (as defined
therein), to the extent not paid by the Trust; and
WHEREAS, in connection with such purchases of Preferred
Securities and the related purchase by the Company of Common Securities (as
defined in the Declaration of Trust) of the Trust, the Trust will purchase
as trust assets Junior Subordinated Debentures; and
WHEREAS, pursuant to the Declaration of Trust, the legal title
to the Junior Subordinated Debentures shall be owned and held of record in the
name of The Bank of New York or its successor under the Declaration of Trust,
as Institutional Trustee (the "Institutional Trustee"); and
WHEREAS, upon the occurrence of a Special Event (as defined in
the Declaration of Trust) the Regular Trustees (as defined in the Declaration
of Trust) of the Trust shall, unless the Junior Subordinated Debentures are
redeemed as described herein, dissolve the Trust and cause to be distributed to
the holders of the Preferred Securities and Common Securities, on a Pro Rata
basis (determined as provided in the terms of the Preferred Securities and
Common Securities attached as Exhibits B and C to the Declaration of Trust),
Junior Subordinated Debentures and in connection with a Liquidation
Distribution (as defined in the Declaration of Trust) the Regular Trustees may
cause to be distributed to holders of Preferred Securities and Common
Securities, on such a Pro Rata basis, Junior Subordinated Debentures (each a
"Dissolution Event"); and
WHEREAS, Holdings desires and has requested the Trustee to join
with it in the execution and delivery of this [ ] Supplemental Indenture, and
all requirements necessary to make this [ ] Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Junior
Subordinated Debentures, when executed by Holdings and authenticated and
delivered by the Trustee, the valid obligations of Holdings, have been
performed and fulfilled, and the execution and delivery hereof have been in
all respects duly authorized;
NOW THEREFORE, in consideration of the purchase and acceptance
of the Junior Subordinated Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form and substance
of the Junior Subordinated Debentures and the terms, provisions and conditions
thereof, Holdings covenants and agrees with the Trustee as follows:
ARTICLE 1
General Terms and Conditions of the Junior Subordinated Debentures
Section 1.1. There shall be and is hereby authorized a
series of Debentures designated the "___% Junior Subordinated Debentures Due
20___", limited in aggregate principal amount of $___ which is equal to the
sum of (i) $___ plus (ii) $___ which is a dollar amount equal to the principal
amount of Junior Subordinated Debentures purchased by the Trust with the
proceeds received by the Trust from the purchase by Holdings of the Common
Securities of the Trust, which amount shall be as set forth in any written
order of Holdings for the authentication and delivery of Junior
Subordinated Debentures. Upon exercise of the overallotment option set
forth in the Underwriting Agreement (as defined in the Declaration of
Trust), additional Junior Subordinated Debentures in the aggregate
principal amount of up to $o may be executed by Holdings and delivered to
the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Junior Subordinated Debentures to or upon the
written order of Holdings, which order shall be accompanied by evidence
satisfactory to the Trustee that the overallotment option has been
exercised. The Junior Subordinated Debentures shall mature and the
principal shall be due and payable together with all accrued and unpaid
interest thereon, including Compounded Interest (as hereinafter defined) on
__________, 20___.
Section 1.2. (a) The Junior Subordinated Debentures shall
be issued in fully registered certificated form without interest coupons.
Principal and interest on the Junior Subordinated Debentures issued in
certificated form will be payable, the transfer of such Junior Subordinated
Debentures will be registrable and such Junior Subordinated Debentures will
be exchangeable for Junior Subordinated Debentures bearing identical terms
and provisions at the office or agency of Holdings in the Borough of
Manhattan, The City and State of New York; provided, however, that payment
of interest may be made at the option of Holdings by check mailed to the
registered holder at such address as shall appear in the Debenture register
and that the payment of principal with respect to the Junior Subordinated
Debentures will only be made upon surrender of the Junior Subordinated
Debentures to the Trustee.
(b) In connection with a Dissolution Event;
(i) Junior Subordinated Debentures in certificated form may
be presented to the Trustee by the Institutional Trustee in
exchange for a Global Debenture representing the Junior
Subordinated Debentures in an aggregate principal amount equal to
all outstanding Junior Subordinated Debentures, to be registered
in the name of the Depositary, or its nominee, and delivered by
the Trustee to the Depositary for crediting to the accounts of
its participants pursuant to the instructions of the Regular
Trustees (as defined in the Declaration of Trust). Upon any such
presentation, Holdings shall execute a Global Debenture
representing the Junior Subordinated Debentures in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture and
this o Supplemental Indenture. Payments on the Junior
Subordinated Debentures issued as a Global Debenture will be made
to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, Junior Subordinated Debentures in certificated
form may be presented to the Trustee by the Institutional Trustee
and any Preferred Security Certificate (as defined in the
Declaration of Trust) which represents Preferred Securities other
than Preferred Securities held by the Clearing Agency (as defined
in the Declaration of Trust) or its nominee ("Non Book-Entry
Preferred Securities") will be deemed to represent beneficial
interests in Junior Subordinated Debentures presented to the
Trustee by the Institutional Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the
Non Book-Entry Preferred Securities until such Preferred Security
Certificate is presented to the Debenture Registrar for transfer
or reissuance at which time such Preferred Security Certificate
will be cancelled and a Junior Subordinated Debenture, registered
in the name of the holder of the Preferred Security Certificate
or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Preferred
Security Certificate canceled will be executed by Holdings and
delivered to the Trustee for authentication and delivery in
accordance with the Indenture and this o Supplemental Indenture.
On issue of such Junior Subordinated Debentures, Junior
Subordinated Debentures with an equivalent aggregate amount that
were presented by the Institutional Trustee to the Trustee will
be deemed to have been canceled.
Section 1.3. Each Junior Subordinated Debenture will bear
interest at the rate of ___% per annum from and including __________,
199___ until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum, compounded quarterly, payable (subject to the
provisions of Article Three) quarterly in arrears on __________,
__________, __________ and __________ of each year (each, an "Interest
Payment Date", commencing on __________, 199___), to the person in whose
name such Junior Subordinated Debenture or any predecessor Junior
Subordinated Debenture is registered, at the close of business on the
regular record date for such interest installment, which, except as set
forth below, shall be the close of business on the business day immediately
preceding that Interest Payment Date. Notwithstanding the foregoing
sentence, if the Preferred Securities are no longer in book-entry only form
or if pursuant to the provisions of Section 2.4(4) of the Indenture, the
Junior Subordinated Debentures are not represented by a Global Debenture,
the regular record dates for such interest installment shall be the close
of business on the last day of the quarter next preceding that Interest
Payment Date. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered holders
on such regular record date, and may be paid to the person in whose name
the Junior Subordinated Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed
by the Trustee for the payment of such defaulted interest, notice whereof
shall be given to the registered holders of the Junior Subordinated
Debentures not less than 10 days prior to such special record date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Junior Subordinated
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and for any period
shorter than a full quarterly interest period for which interest is computed,
the amount of interest payable will be computed on the basis of the actual
number of days elapsed in such a 30-day month. In the event that any date on
which interest is payable on the Junior Subordinated Debentures is not a
business day, then payment of interest payable on such date will be made on
the next succeeding day which 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 (and the regular record date for such
interest installment shall be the business day immediately preceding the
business day which is 15 days preceding such Interest Payment Date), in
each case with the same force and effect as if made on such date.
ARTICLE 2
Optional Redemption of the Junior Subordinated Debentures
Section 2.1. Except as provided in Section 2.02, Junior
Subordinated Debentures may not be redeemed by Holdings prior to
__________, 20___. Subject to the terms of Article Three of the Indenture,
Holdings shall have the right to redeem the Junior Subordinated Debentures,
in whole or in part, from time to time, on or after __________, 20___, at a
redemption price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon, including Compounded Interest, if
any, to the date of such redemption (the "Optional Redemption Price"). Any
redemption pursuant to this paragraph will be made upon not less than 30
nor more than 60 days' notice, at the Optional Redemption Price.
Section 2.2. If, at any time, a Tax Event (as defined
below) shall occur or be continuing and (i) the Regular Trustees and
Holdings shall have received an opinion (a "Redemption Tax Opinion") of a
nationally recognized independent tax counsel experienced in such matters
that, as a result of a Tax Event, there is more than an insubstantial risk
that Holdings would be precluded from deducting the interest on the Junior
Subordinated Debentures for United States federal income tax purposes even
if the Junior Subordinated Debentures were distributed to the holders of
Preferred Securities and Common Securities in liquidation of such holder's
interest in the Trust as set forth in the Declaration of Trust or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered to the Trust,
Holdings shall have the right at any time, upon not less than 30 nor more
than 60 days' notice, to redeem the Junior Subordinated Debentures in whole
or in part for cash at the Optional Redemption Price within 90 days
following the occurrence of such Tax Event; provided, however, that, if at
the time there is available to Holdings or the Regular Trustees on behalf
of the Trust the opportunity to eliminate, within such 90 day period, the
Tax Event by taking some ministerial action ("Ministerial Action"), such as
filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on the Trust, Holdings or
the holders of the Preferred Securities, Holdings or the Regular Trustees
on behalf of the Trust will pursue such measure in lieu of redemption and
provided further that Holdings shall have no right to redeem the Junior
Subordinated Debentures while the Regular Trustees on behalf of the Trust
are pursuing any such Ministerial Action.
"Tax Event" means that Holdings and the Regular Trustees shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect
that on or after __________, 199___, as a result of (a) any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein (b) any amendment to, or change in,
an interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position
or (d) any action taken by any governmental agency or regulatory authority,
which amendment or change is enacted, promulgated, issued or announced or
which interpretation or pronouncement is issued or announced or which
action is taken, in each case on or after __________, 199___, there is more
than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date thereof, subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated
Debentures, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by Holdings to the Trust on
the Junior Subordinated Debentures is not, or within 90 days of the date
thereof will not be, deductible by Holdings for United States federal
income tax purposes.
"No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on any then applicable published revenue ruling of the Internal
Revenue Service, to the effect that the holders of the Preferred Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of a dissolution of the Trust and distribution of the
Junior Subordinated Debentures as provided in the Declaration of Trust.
Section 2.3. If the Junior Subordinated Debentures are only
partially redeemed pursuant to this Article Two, the Junior Subordinated
Debentures will be redeemed pro rata or by lot or by any other method
utilized by the Trustee. Notwithstanding the foregoing, if a partial
redemption of the Junior Subordinated Debentures would result in the
delisting of the Preferred Securities by any national securities exchange
or other organization on which the Preferred Securities are then listed,
Holdings shall not be permitted to effect such partial redemption and will
only redeem the Junior Subordinated Debentures in whole.
ARTICLE 3
Extension of Interest Payment Period
Section 3.1. So long as Holdings is not in default in the
payment of interest on the Junior Subordinated Debentures, Holdings shall
have the right, at any time during the term of the Junior Subordinated
Debentures, from time to time to extend the interest payment period of such
Junior Subordinated Debentures for up to 20 consecutive quarterly interest
periods (the "Extended Interest Payment Period"), at the end of which
period Holdings shall pay all interest accrued and unpaid thereon (together
with interest thereon at the rate of ___% per annum, compounded quarterly to
the extent permitted by applicable law ("Compounded Interest")). During
such Extended Interest Payment Period Holdings shall not declare or pay any
dividend on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred
stock, or make any guarantee payments with respect thereto; provided that
Holdings may pay accrued dividends (and cash in lieu of fractional shares)
upon mandatory conversion of any of its preferred stock, including its ESOP
Preferred Stock, in accordance with the terms of such stock. Prior to the
termination of any such Extended Interest Payment Period, Holdings may pay
all or any portion of the interest accrued on the Junior Subordinated
Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further
extend such Period; provided that such Period together with all such
further extensions thereof shall not exceed 20 consecutive quarterly
interest periods. Upon the termination of any Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest then due,
together with Compounded Interest, Holdings may select a new Extended
Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment
Period, except at the end thereof. At the end of the Extended Interest
Payment Period Holdings shall pay all interest accrued and unpaid on the
Junior Subordinated Debentures including any Compounded Interest which
shall be payable to the holders of the Junior Subordinated Debentures in
whose names the Junior Subordinated Debentures are registered in the
Debenture register on the record date for the first interest payment date
occurring on or after the end of the Extended Interest Payment Period.
Section 3.2. (a) So long as the Trust is the legal owner and
holder of record of the Junior Subordinated Debentures, at the time Holdings
selects an Extended Interest Payment Period, Holdings shall give both the
Institutional Trustee and the Trustee written notice of its selection of such
Extended Interest Payment Period one business day prior to the earlier of (i)
the next succeeding date on which distributions on the Preferred Securities
are payable or (ii) the date the Trust is required to give notice of the
record date or the date such distributions are payable to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Preferred Securities, but in any event not less than one business day prior to
such record date. Holdings shall cause the Trust to give notice of Holdings's
selection of such Extended Interest Payment Period to the holders of the
Preferred Securities.
(b) If as a result of a Dissolution Event, Junior Subordinated
Debentures have been distributed to holders of Preferred Securities and Common
Securities, at the time Holdings selects an Extended Interest Payment Period,
Holdings shall give the holders of the Junior Subordinated Debentures and the
Trustee written notice of its selection of such Extended Interest Payment
Period 10 business days prior to the earlier of (i) the next succeeding
Interest Payment Date or (ii) the date Holdings is required to give notice of
the record or payment date of such interest payment to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Junior Subordinated Debentures.
Section 3.3. The quarter in which any notice is given
pursuant to Section 3.02 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
this Article Three.
ARTICLE 4
Covenants Applicable to Junior Subordinated Debentures
Section 4.1. So long as any Preferred Securities remain
outstanding, Holdings will not declare or pay any dividend on, or redeem,
purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock, or make any
guarantee payments with respect thereto, if at such time (i) Holdings
shall be in default with respect to its Guarantee Payments (as defined in
the Guarantee Agreement) or other payment obligations under the Guarantee
Agreement, (ii) there shall have occurred any Event of Default under the
Indenture with respect to the Junior Subordinated Debentures or (iii)
Holdings shall have given notice of its selection of an Extended Interest
Payment Period and such Period, or any extension thereof, is continuing;
provided that Holdings will be permitted to make payments under the
Preferred Securities Guarantee and to pay accrued dividends (and cash in
lieu of fractional shares) upon the conversion of any of its preferred
stock, including its ESOP Preferred Stock, in accordance with the terms of
such stock.
Section 4.2. In connection with the distribution of the
Junior Subordinated Debentures to the holders of the Preferred Securities
upon a Dissolution Event, Holdings will use its best efforts to list such
Junior Subordinated Debentures on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed and traded.
Section 4.3. Holdings covenants and agrees for the benefit
of the holders of the Preferred Securities to comply fully with all of its
obligations and agreements under the Declaration of Trust, including,
without limitation, its obligations under Article 4 thereof.
Section 4.4. Prior to the distribution of Junior
Subordinated Debentures to the holders of Preferred Securities upon a
Dissolution Event, Holdings covenants and agrees for the benefit of the
holders of the Preferred Securities (i) not to cause or permit the Common
Securities to be transferred except as permitted by the Declaration of
Trust and (ii) not to take any action which would cause the Trust to cease
to be treated as a grantor trust for United States federal income tax
purposes, except in connection with a distribution of the Junior
Subordinated Debentures as provided in the Declaration of Trust.
ARTICLE 5
Form of Junior Subordinated Debentures
Section 5.1. The Junior Subordinated Debentures and the
Trustee's Certificate of Authentication to be endorsed thereon are to be
substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE, INSERT: This
Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture 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 Debenture is presented by an authorized
representative to The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture 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.]
No. $
CUSIP NO. _________
RJR NABISCO HOLDINGS CORP.
___% JUNIOR SUBORDINATED DEBENTURE,
DUE 20___
RJR Nabisco Holdings Corp., a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to as
"Holdings", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to
pay to ___________, or registered assigns, the principal sum of _________
Dollars on __________, 20___, and to pay interest on said principal sum
from and including o, 199o or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on __________, __________, __________ and __________ of
each year commencing __________, 199__ at the rate of ___% per annum plus
Compounded Interest, if any, until the principal hereof shall have become
due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-
day months and for any period shorter than a full quarterly interest period
for which interest is computed, the amount of interest payable will be
computed on the basis of the actual number of days elapsed in such a 30-day
month. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which 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. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the close
of business on the Business Day 15 days preceding such Interest Payment
Date. Any such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the registered holders on such
regular record date, and may be paid to the person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the
close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to
the registered holders of this series of Debentures not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and the interest on this Debenture
shall be payable at the office or agency of Holdings maintained for that
purpose in the Borough of Manhattan, The City and State of New York, in any
coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of Holdings by
check mailed to the registered holder at such address as shall appear in
the Debenture register and that the payment of principal will only be made
upon the surrender of this Debenture to the Trustee. Notwithstanding the
foregoing, so long as the owner and record holder of this Debenture is the
Trust (as defined in the Indenture referred to on the reverse hereof), the
payment of the principal of (and premium, if any) and interest (including
Compounded Interest, if any) on this Debenture will be made at such place
and to such account of the Trust as may be designated by the Institutional
Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same (a) agrees to and shall be bound by
such provisions (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided an (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each
such Holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse side hereof, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, Holdings has caused this Instrument to be
executed.
Dated ___________ __, ____
RJR NABISCO HOLDINGS CORP.
By
------------------------------
Name: John J. Delucca
Title: Senior Vice President and
Treasurer
Attest:
By
-------------------------
Name: H. Colin McBride
Title: Senior Vice President, Associate
General Counsel and Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
The Bank of New York,
as Trustee
-------------------------
or as Authentication Agent
-------------------------
Authorized Signatory
By
-----------------------
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of debentures
of Holdings (herein sometimes referred to as the "Debentures"), all issued or
to be issued in one or more series under and pursuant to an Indenture dated as
of September 19, 1995 duly executed and delivered between Holdings and The
Bank of New York, a New York banking corporation, as Trustee (herein
referred to as the "Trustee"), as supplemented by the First Supplemental
Indenture dated as of September 21, 1995 between Holdings and the Trustee,
and as further supplemented by the [ ] Supplemental Indenture dated
as of _______, 199___ between Holdings and the Trustee (said Indenture as
so supplemented being hereinafter referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, Holdings and the holders of the
Debentures, and, to the extent specifically set forth in the Indenture, the
holders of Senior Indebtedness and Preferred Securities. By the terms of
the Indenture, the Debentures are issuable in series which may vary as to
amount, date of maturity, rate of interest and in other respects as in the
Indenture provided. This series of Debentures is designated the ___%
Junior Subordinated Debentures due 20___ and is limited in aggregate
principal amount as specified in said [ ] Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may
not be redeemed by Holdings prior to __________, 20___. Holdings shall
have the right to redeem this Debenture at the option of Holdings, without
premium or penalty, in whole or in part at any time on or after __________,
20___ (an "Optional Redemption"), at a redemption price equal to 100% of
the principal amount plus any accrued but unpaid interest, including any
Compounded Interest, if any, to the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this paragraph will be made
upon not less than 30 nor more than 60 days' notice, at the Optional
Redemption Price.
If, at any time, a Tax Event (as defined below) shall occur or
be continuing after receipt of a Dissolution Tax Opinion (as defined below) and
(i) the Regular Trustees and Holdings shall have received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more
than an insubstantial risk that Holdings would be precluded from deducting the
interest on the Junior Subordinated Debentures for United States federal
income tax purposes even if the Junior Subordinated Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holder's interest in the Trust as set forth in the
Declaration of Trust or (ii) the Regular Trustees shall have been informed by
such tax counsel that a No Recognition Opinion (as defined below) cannot be
delivered to the Trust, Holdings shall have the right at any time, upon not
less than 30 nor more than 60 days' notice, to redeem the Junior Subordinated
Debentures in whole or in part for cash at the Optional Redemption Price
within 90 days following the occurrence of such Tax Event; provided, however,
that, if at the time there is available to Holdings or the Regular Trustees on
behalf of the Trust the opportunity to eliminate, within such 90 day period,
the Tax Event by taking some ministerial action ("Ministerial Action"), such
as filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on the Trust, Holdings or the
holders of the Preferred Securities, Holdings or the Regular Trustees on
behalf of the Trust will pursue such measure in lieu of redemption and
provided further that Holdings shall have no right to redeem the Junior
Subordinated Debentures while the Regular Trustees on behalf of the Trust are
pursuing any such Ministerial Action.
"Tax Event" means that Holdings and the Regular Trustees
shall have obtained an opinion of nationally recognized independent tax
counsel experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after __________, 199___, as a result of (a) any
amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination) (c) any
interpretation or pronouncement that provides for a position with respect
to such laws or regulations that differs from the theretofore generally
accepted position or (d) any action taken by any governmental agency or
regulatory authority, which amendment or change is enacted, promulgated,
issued or announced or which interpretation or pronouncement is issued or
announced or which action is taken, in each case on or after __________,
199___, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States
federal income tax with respect to income accrued or received on the Junior
Subordinated Debentures, (ii) the Trust is, or will be within 90 days of
the date thereof, subject to more than a de minimis amount of taxes, duties
or other governmental charges or (iii) interest payable by Holdings to the
Trust on the Junior Subordinated Debentures is not, or within 90 days of
the date thereof will not be, deductible by Holdings for United States
federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on any then applicable published revenue ruling of the Internal
Revenue Service, to the effect that the holders of the Preferred Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of a dissolution of the Trust and distribution of the
Junior Subordinated Debentures as provided in the Declaration of Trust.
If the Debentures are only partially redeemed by Holdings
pursuant to an Optional Redemption or as a result of a Tax Event as described
above, the Debentures will be redeemed pro rata or by lot or in some other
equitable manner determined by the Trustee. Notwithstanding the foregoing, if
a partial redemption of the Junior Subordinated Debentures would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, Holdings
shall not be permitted to effect such partial redemption and will only redeem
the Junior Subordinated Debentures in whole.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Debenture upon compliance by Holdings with
certain conditions set forth therein.
The Indenture contains provisions permitting Holdings and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of all series affected at the time
outstanding, as defined in the Indenture (and, in the case of any series of
Debentures held as trust assets of a RJR Nabisco Holdings Capital Trust and
with respect to which a Security Exchange has not theretofore occurred, such
consent of holders of the Preferred Securities and the Common Securities of
such RJR Nabisco Holdings Capital Trust as may be required under the
Declaration of Trust of such RJR Nabisco Holdings Capital Trust), to execute
supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or of modifying in any manner the rights of
the Holders of the Debentures; provided, however, that no such supplemental
indenture shall (i) extend the final maturity of any Debentures of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon (except that a valid extension of an interest
payment period by the Issuer shall not constitute an extension of interest for
this purpose), or reduce any amount payable upon the redemption thereof or
reduce the amount of the principal of an original issue discount Debenture that
would be due and payable upon an acceleration of the maturity thereof pursuant
to the Indenture or the amount thereof provable in bankruptcy pursuant to the
Indenture, or alter the provisions of the Indenture concerning liability of
officers of the Issuer and the parties to the Indenture or impair or affect
the right of any Debenture holder to institute suit for the payment thereof in
each case without the consent of the holder of each Debenture so affected
(and, in the case of any series of Securities held as trust assets of an RJR
Nabisco Holdings Capital Trust and with respect to which a Security Exchange
has not theretofore occurred, such consent of holders of the Preferred
Securities and the Common Securities of such RJR Nabisco Holdings Capital
Trust as may be required under the Declaration of Trust of such RJR Nabisco
Holdings Capital Trust), or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Debenture
(and, in the case of any series of Debentures held as trust assets of a RJR
Nabisco Holdings Capital Trust and with respect to which a Security Exchange
has not theretofore occurred, such consent of the holders of the Preferred
Securities and the Common Securities of such RJR Nabisco Holdings Capital
Trust as may be required under the Declaration of Trust of such RJR Nabisco
Holdings Capital Trust) affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Debentures of all series at the time outstanding affected thereby
(subject, in the case of any series of Debentures held as trust assets of a RJR
Nabisco Holdings Capital Trust and with respect to which a Securities Exchange
has not theretofore occurred, to such consent of holders of Preferred
Securities and Common Securities of such RJR Nabisco Holdings Capital Trust
as may be required under the Declaration of Trust of such RJR Nabisco Holdings
Capital Trust), on behalf of the Holders of the Debentures of such series, to
waive any past default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of the principal
of or premium, if any, or interest on any of the Debentures of such series.
Any such consent or waiver by the registered Holder of this Debenture (unless
revoked as provided in the Indenture) shall be conclusive and binding upon
such Holder and upon all future Holders and owners of this Debenture and of
any Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of
Holdings, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place at the
rate and in the money herein prescribed.
So long as Holdings is not in default in the payment of
interest on the Debentures, Holdings shall have the right, at any time during
the term of the Debentures, from time to time to extend the interest payment
period of such Debentures for up to 20 consecutive quarterly interest periods
(the "Extended Interest Payment Period"), at the end of which period Holdings
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate of ___% per annum compounded quarterly to the extent permitted by
applicable law ("Compounded Interest")). During such Extended Interest
Payment Period Holdings shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock, or make any guarantee payments
with respect thereto, provided that Holdings may pay accrued dividends (and
cash in lieu of fractional shares) upon mandatory conversion of any of its
preferred stock, including its ESOP Preferred Stock, in accordance with the
terms of such Stock. Prior to the termination of any such Extended Interest
Payment Period, Holdings may pay all or any portion of the interest accrued on
the Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further extend
such Extended Interest Payment Period, provided that such Period together with
all such further extensions thereof shall not exceed 20 consecutive quarterly
interest periods. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest then due,
together with Compounded Interest, Holdings may select a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest on this
Debenture shall be due and payable during an Extended Interest Payment Period,
except at the end thereof. At the end of the Extended Interest Payment Period
Holdings shall pay all interest accrued and unpaid on the Junior Subordinated
Debentures including any Compounded Interest which shall be payable to the
holders of the Junior Subordinated Debentures in whose names the Junior
Subordinated Debentures are registered in the Debenture register on the record
date for the first interest payment date occurring on or after the end of the
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture register of Holdings, upon surrender of this Debenture
for registration of transfer at the office or agency of Holdings in the
Borough of Manhattan, The City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to Holdings or the
Trustee duly executed by the registered holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but Holdings may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, Holdings, the Trustee, any paying agent and any Debenture Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither Holdings nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of Holdings or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
If certificated Debentures -- The Debentures of this series are
issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Debentures of this Series are
exchangeable for a like aggregate principal amount of Debentures of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE 6
Original Issue of Junior Subordinated Debentures
Section 6.1. Junior Subordinated Debentures in the
aggregate principal amount equal to the sum of $__________ plus a dollar
amount equal to the principal amount of Junior Subordinated Debentures
purchased by the Trust with the proceeds received by the Trust from the
purchase by Holdings of the Common Securities of the Trust, may, upon
execution of this [ ] Supplemental Indenture, be executed by Holdings and
delivered to the Trustee for authentication, and the trustee shall
thereupon authenticate and deliver said Debentures to or upon the written
order of Holdings, signed by its Chairman, any Vice Chairman, its
President, or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by Holdings.
ARTICLE 7
Miscellaneous
Section 7.1. Except as otherwise expressly provided in this
[ ] Supplemental Indenture or in the form of Junior Subordinated
Debenture or otherwise clearly required by the context hereof or thereof,
all terms used herein or in said form of Junior Subordinated Debenture that
are defined in the Indenture shall have the several meanings respectively
assigned to them thereby.
Section 7.2. The Indenture, as supplemented by this [ ]
Supplemental Indenture, is in all respects ratified and confirmed, and this
[ ] Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
Section 7.3. The recitals herein contained are made by
Holdings and not by the Trustee, and the Trustee assumes no responsibility
for the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this [ ] Supplemental Indenture.
Section 7.4. This [ ] Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this [ ]
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated
in the acknowledgments and as of the day and year first above written.
RJR NABISCO HOLDINGS CORP.
By
----------------------------
Name:
Title:
Attest:
- ------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By
----------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) __________, 199___
On the ______ day of _______, in the year one thousand nine
hundred ninety-___, before me personally came ________________ to me known,
who, being by me duly sworn, did depose and say that he resides at
____________________ ___________________________________; that he is
____________ ______________________ of RJR NABISCO HOLDINGS CORP., one of
the corporations described in and which executed the above instrument; that
he knows the corporate seal of said corporation; that the seal affixed to
the said instrument is such corporation 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.
----------------------------
NOTARY PUBLIC
My Commission Expires
August 31, 1998
The RJR Nabisco Trusts
(as defined below)
c/o RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Re: The RJR Nabisco Trusts (as defined below)
Ladies and Gentlemen:
We have acted as special Delaware counsel to RJR Nabisco
Holdings Capital Trust II, RJR Nabisco Holdings Capital Trust III, RJR Nabisco
Holdings Capital Trust IV, RJR Nabisco Holdings Capital Trust V and RJR Nabisco
Holdings Capital Trust VI, each a Delaware statutory business trust
(collectively referred to herein as the "RJR Nabisco Trusts" and each
individually as an "RJR Nabisco Trust"), in connection with certain matters
relating to the creation of the RJR Nabisco Trusts and the proposed issuance of
Preferred Securities therein to beneficial owners pursuant to and as described
in Registration Statement Nos. 333-60811, 333-60811-01, 333-60811-02,
333-60811-03, 333-60811-04, 333-60811-05, and 333-60811-06 (and the Prospectus
forming a part thereof) on Form S-3 filed with the Securities and Exchange
Commission (the "Commission") on August 6, 1998, as amended by Pre-Effective
Amendment No. 1 thereto (as so amended, the "Registration Statement").
Capitalized terms used herein and not otherwise herein defined are used as
defined in the form of Amended and Restated Declaration of Trust attached as an
exhibit to the Registration Statement.
In rendering this opinion, we have examined copies of the
following documents in the forms provided to us: the Certificate of Trust of
each RJR Nabisco Trust, each as filed in the Office of the Secretary of State
of Delaware (the "State Office") on August 6, 1998 (each a "Certificate"); the
Declaration of Trust of each RJR Nabisco Trust, each dated as of August 5, 1998
(each an "Original Governing Instrument"); the Indenture dated as of September
21, 1995 between RJR Nabisco Holdings Corp. and The Bank of New York, as
Trustee, as supplemented by a First Supplemental Indenture thereto dated as of
September 21, 1995, and the form of Supplemental Indenture to be entered into
in connection therewith; the form of Guarantee Agreement to be made by RJR
Nabisco Holdings Corp. with respect to each RJR Nabisco Trust; and the
Registration Statement. In such examinations, we have assumed the genuineness
of all signatures, the conformity to original documents of all documents
submitted to us as drafts or copies or forms of documents to be executed and
the legal capacity of natural persons to complete the execution of documents.
We have further assumed for purposes of this opinion: (i) the due formation,
organization or creation, valid existence and good standing of the RJR Nabisco
Trusts and each entity that is a party to any of the documents reviewed by us
under the laws of the jurisdiction of its respective formation, organization or
creation; (ii) the due authorization, execution and delivery by, or on behalf
of, each of the parties thereto of the above-referenced documents with respect
to each RJR Nabisco Trust; (iii) that RJR Nabisco Holdings Corp., The Bank of
New York, The Bank of New York (Delaware) and the appropriate Regular Trustees
will duly authorize, execute and deliver an amended and restated declaration of
trust for each RJR Nabisco Trust in the form of the Amended and Restated
Declaration of Trust attached as an exhibit to the Registration Statement (each
a "Governing Instrument") and all other documents contemplated thereby or by
the Registration Statement to be executed in connection with the creation of
each RJR Nabisco Trust and the issuance by each such RJR Nabisco Trust of
Preferred Securities, in each case, prior to the first issuance of
Preferred Securities; (iv) that the Preferred Securities of each RJR
Nabisco Trust will be offered and sold pursuant to the Registration
Statement and a prospectus supplement that will be consistent with, and
accurately describe, the terms of the applicable Governing Instrument and
Guarantee Agreement relating to each such RJR Nabisco Trust and all other
relevant documents; (v) that no event has or will occur subsequent to the
filing of any Certificate that would cause a dissolution or liquidation of
any RJR Nabisco Trust under the applicable Original Governing Instrument or
the applicable Governing Instrument; (vi) that the activities of each RJR
Nabisco Trust have been and will be conducted in accordance with its
Original Governing Instrument or Governing Instrument, as applicable, and
the Delaware Business Trust Act, 12 Del. C. Section Section 3801 et seq.
(the "Delaware Act"); (vii) that each Holder of Preferred Securities of
each RJR Nabisco Trust will make payment of the required consideration
therefor in consideration thereof in accordance with the terms and
conditions of the Registration Statement and the Prospectus forming a part
thereof, the applicable Governing Instrument and the applicable prospectus
supplement, and that the Preferred Securities of each RJR Nabisco Trust are
otherwise issued and sold to the Preferred Securities Holders of such RJR
Nabisco Trust in accordance with the terms, conditions, requirements and
procedures set forth in the Registration Statement and the Prospectus
forming a part thereof, the applicable Governing Instrument and the
applicable prospectus supplement; and (viii) that the documents examined by
us, or contemplated hereby, express the entire understanding of the parties
thereto with respect to the subject matter thereof and have not been, and,
prior to the issuance of Preferred Securities by each RJR Nabisco Trust,
will not be amended, supplemented or otherwise modified, except as herein
referenced. No opinion is expressed with respect to the requirements of,
or compliance with, federal or state securities or blue sky laws. Further,
we express no opinion with respect to the Registration Statement or any
other offering materials relating to the Preferred Securities offered by
any RJR Nabisco Trust and we assume no responsibility for their contents.
As to any fact material to our opinion, other than those assumed, we have
relied without independent investigation on the above-referenced documents
and on the accuracy, as of the date hereof, of the matters therein
contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that, upon issuance, the
Preferred Securities of each RJR Nabisco Trust will constitute validly issued
and, subject to the terms of the applicable Governing Instrument, fully paid
and non-assessable beneficial interests in the assets of such RJR Nabisco
Trust. We note that pursuant to the Governing Instrument, each RJR Nabisco
Trust may withhold amounts otherwise distributable to a Holder of Securities in
such RJR Nabisco Trust and pay over such amounts to the applicable
jurisdictions in accordance with federal, state and local law and any amounts
withheld will be deemed to have been distributed to such Holder and that,
pursuant to the Governing Instrument, the Preferred Security Holders of each
RJR Nabisco Trust may be obligated to make payments or provide indemnity or
security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus forming a part thereof. In giving this consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7, of the Securities Act of 1933, as amended or the
rules and regulations of the Commission thereunder. This opinion speaks only
as of the date hereof and is based on our understandings and assumptions as to
present facts, and our review of the above referenced documents and the
application of Delaware law as the same exist on the date hereof, and we
undertake no obligation to update or supplement this opinion after the date
hereof for the benefit of any person or entity with respect to any facts or
circumstances that may hereafter come to our attention or any changes in facts
or law that may hereafter occur or take effect. This opinion is intended
solely for the benefit of the addresses hereof in connection with the matters
contemplated hereby and may not be relied upon by any other person or entity or
for any other purpose without our prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
EXHIBIT 23.1
Independent Auditors' Consent
We consent to the incorporation by reference in this Amendment
No. 1 to Registration Statement Nos. 333-60811, 333-60811-01, 333-60811-02,
333-60811-03, 333-60811-04, 333-60811-05 and 333-60811-06 of RJR Nabisco
Holdings Corp. ("Holdings"), RJR Nabisco, Inc. ("RJRN"), RJR Nabisco Holdings
Capital Trust II, RJR Nabisco Holdings Capital Trust III, RJR Nabisco
Holdings Capital Trust IV, RJR Nabisco Holdings Capital Trust V and RJR
Nabisco Holdings Capital Trust VI on Form S-3 (the "Registration
Statement") of our report dated January 26, 1998 (March 3, 1998 as to Note
10), appearing in the Annual Report on Form 10-K of Holdings and RJRN, for
the year ended December 31, 1997. We also consent to the reference to us
under the headings "Experts" in the Prospectuses, which are part of this
Registration Statement.
/s/ Deloitte & Touche LLP
New York, New York
August 31, 1998
