UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
RJR Nabisco Holdings Corp.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74960K876
(CUSIP Number)
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
February 3, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box / /.
Check the following box if a fee is being paid with the statement.
(A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
Item 1. Security and Issuer
The Schedule 13D filed with the U.S. Securities and
Exchange Commission ("SEC") on August 22, 1996, by High River
Limited Partnership, a Delaware Limited Partnership ("High River"),
Riverdale LLC, a New York limited liability company ("Riverdale"),
Barberry Corp., a Delaware corporation ("Barberry"), American Real
Estate Holdings, L.P., a Delaware limited partnership ("AREH"),
American Real Estate Partners, L.P., a Delaware limited partnership
("AREP"), American Property Investors, Inc., a Delaware corporation
("API") and Carl C. Icahn ("Icahn"), a citizen of the United States
of America, as amended by Amendment No. 1 dated October 25, 1996,
which, among other things, added Meadow Walk Limited Partnership,
a Delaware limited partnership ("Meadow Walk") as an additional
registrant (collectively, the "Icahn Registrants"), and Amendment
No. 2 dated and amended on November 4, 1996, is further amended to
furnish the additional information set forth herein. All
capitalized terms contained herein but not otherwise defined shall
have the meaning ascribed to such terms in the previously filed
statements on Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Item 6 is amended to add the following:
On February 3, 1997, High River, Meadow Walk and Barberry
retained Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ") to act as their exclusive financial advisor for a period of
twelve (12) months with respect to the possible spin-off or split-off
of Nabisco Holdings Corp. ("Nabisco") from RJR Nabisco Holdings
Corp ("RJR") or another extraordinary dividend of cash, securities
or other assets of RJR related to the separation of the business of
Nabisco from other portions of RJR to shareholders of RJR or the
sale of a substantial amount of the business, securities or assets
of Nabisco (each, a "Transaction").
In exchange for assisting High River, Meadow Walk and
Barberry in (i) the evaluation of RJR; (ii) the development of
possible strategies intended to result in a Transaction; (iii)
advising in the implementation of strategies related to a
Transaction; and (iv) negotiating financial aspects of any
Transaction, DLJ will receive as compensation a retainer fee and a
monthly fee. In addition, DLJ will receive additional cash
compensation at the end of 18 months based on the market price of
RJR at that time or, earlier, in the event that High River, Meadow
Walk, Barberry or AREP sells, disposes or otherwise transfers,
within 18 months, any securities of RJR which it presently owns or
acquires during the term of the agreement between High River,
Meadow Walk, Barberry and DLJ (the "DLJ Agreement").
A copy of the DLJ Agreement is attached hereto as Exhibit
1 and incorporated in its entirety herein by reference.
Item 7. Material to be Filed as Exhibits
1. DLJ Agreement between High River, Meadow Walk, Barberry and
DLJ.
2. Press Release, dated February 3, 1997<PAGE>
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: February 4, 1997
RIVERDALE LLC
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
BARBERRY CORP.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
MEADOW WALK LIMITED PARTNERSHIP
By: BARBERRY CORP.
Its: General Partner
<PAGE>
<PAGE>
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE PARTNERS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
By: /s/ Carl C. Icahn
Carl C. Icahn
By: /s/ Thomas Rattigan
Thomas Rattigan
(Signature Page of Schedule 13D Amendment No. 3 with respect to RJR
Nabisco Holdings Corp.)
EXHIBIT 1
January 27, 1997
PRIVATE AND CONFIDENTIAL
High River Limited Partnership
114 West 47th Street, Suite 1925
New York, NY 10036
Meadow Walk Limited Partnership
114 West 47th Street, Suite 1925
New York, NY 10036
Barberry Corp.
114 West 47th Street, Suite 1925
New York, NY 10036
Attention: Mr. Carl Icahn
Gentlemen:
This letter agreement (the "Agreement") confirms our
understanding that High River Limited Partnership ("High River"),
Meadow Walk Limited Partnership ("Meadow Walk") and Barberry Corp.
("Barberry") (which together are hereinafter referred to as the
"Company") have engaged Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") to act as their exclusive financial advisor for
a period of 12 months commencing upon your acceptance of this
Agreement, with respect to the possible spin-off or split-off of
Nabisco Holdings Corp. ("Nabisco") from RJR Nabisco Holdings Corp.
("RJR") or other extraordinary dividend of cash, securities or
other assets of RJR relating to the separation of the business of
Nabisco from other portions of RJR to shareholders of RJR or the
sale of a substantial amount of the business, securities or assets
of Nabisco (each a "Transaction").
As discussed, we propose to undertake certain services on your
behalf including, to the extent requested by you: (i) assisting you
in evaluating RJR, its operations, its historical performance and
its future prospects; (ii) assisting you in developing possible
strategies that are intended to result in a Transaction including,
but not limited to, the solicitation of proxies relating to control
of RJR on behalf of the Company and any of its affiliates, either
individually or as part of a group; (iii) advising you in the
implementation of any strategies that you pursue relating to a
Transaction, including, but not limited to, any proxy solicitation
relating to control of RJR; and (iv) negotiating the financial
aspects of any Transaction under your guidance.
As compensation for the services to be provided by DLJ
hereunder, each of High River, Meadow Walk and Barberry agree,
jointly and severally, (i)(a) to pay DLJ a retainer fee of
$2,500,000 in the aggregate, payable promptly upon execution of
this Agreement, (b) to pay DLJ a monthly fee of $125,000, payable
on the first business day of each month commencing May 1, 1997
(unless this Agreement has been previously terminated) and (c) to
pay DLJ additional cash compensation as set forth below, and (ii)
upon request by DLJ from time to time, to reimburse DLJ promptly
for all reasonable out-of-pocket expenses (including the reasonable
fees and expenses of counsel) incurred by DLJ in connection with
its engagement hereunder, whether or not a Transaction is
consummated or a Control Event occurs. To the extent the
additional cash compensation to DLJ pursuant to clause (i)(c) in
the prior sentence is greater than $11,375,000 in aggregate, up to
$3,625,000 actually paid by the Company pursuant to clauses (i)(a)
and (i)(b) above is creditable against DLJ's compensation;
provided, however, that after such crediting DLJ's aggregate
compensation pursuant to clauses (i)(a), (i)(b) and (i)(c) above
will in no event be less than $15,000,000. A "Control Event" as
used herein shall be deemed to occur upon (x) the appointment
during the term of the Agreement as Chairman, President or Chief
Executive Officer of RJR of either Mr. Icahn or any other designee
or representative of the Company or any of its respective
affiliates, or (y) the election or appointment during the term of
the Agreement of representatives or designees of the Company or any
of its respective affiliates to represent 50% or more of the
membership of RJR's Board of Directors then in office. As DLJ will
be acting on your behalf, the Company agrees to the indemnification
and other obligations set forth in Schedule I hereto, which
Schedule is an integral part hereof.
If within 18 months after the date hereof the Company shall
sell, dispose of or otherwise transfer any rights to any securities
of RJR (which, for purposes of this paragraph shall include any
securities distributed by RJR as part of an extraordinary dividend)
which it presently owns or which it acquires during the term of
this Agreement to any person (other than an entity included within
the definition of Company), in addition to the fees referred to
above, the Company shall promptly pay to DLJ the additional cash
compensation referred to in clause (i)(c) in an amount equal to the
lesser of (x) ten percent (10%) of the Profit (as hereinafter
defined), before taxes, earned by the Company as a result of any
such sale, disposition or transfer (a "Sale") and (y) $15,000,000.
For purposes of this paragraph, following consummation of a
Transaction that results in an extraordinary dividend of
securities, a Sale of an RJR security shall only be deemed to have
occurred upon the Sale of (a) in the case of a share of RJR common
stock (i) such share of RJR common stock and (ii) a number of
securities of the type distributed by RJR with respect to such
share of RJR common stock equal to the number of such securities
distributed by RJR with respect to such share of RJR common stock
or (b) in the case of a security distributed by RJR as part of an
extraordinary dividend, (i) such security, and (ii) a number of
shares of RJR common stock equal to the number of such shares with
respect to which such dividended security was distributed (Sales
within (a) (i) and (ii) on the one hand, or (b) (i) and (ii) on the
other hand, "Related Sales") unless, in either case, such Sale,
together with any prior Related Sales, results in gross proceeds to
the Company equal to or greater than the sum of $35.00 and the
actual cost (as determined pursuant to clause (b)(ii) below)
allocable to such Sale, in which case, a Sale of an RJR security
shall be deemed to have occurred, (and any subsequent Related Sales
shall be deemed to occur upon their consummation), and the "Profit"
with respect to any subsequent Related Sales shall be equal to the
gross proceeds thereof. The term "Profit" shall be calculated
using the greater of (i) 19,929,800 shares (the Company hereby
represents and warrants that it or its affiliates own such number
of shares of RJR common stock) or (ii) 19,929,800 shares plus any
additional securities of RJR acquired by the Company or its
affiliates during the term of the Agreement, and shall mean, with
respect to any Sale of securities of RJR, the difference between
(a) the sum of (i) the consideration (including any payment which
the Company receives as a result of terminating the Company's
effort to effect the Transaction) received by the Company, with
respect to such securities (which in the case of non-cash
consideration shall be valued at its fair market value as mutually
agreed to by DLJ and the Company), plus (ii) the value of any
extraordinary dividends (other than securities) distributed with
respect to such securities as part of a Transaction (which, in the
case of non-cash consideration shall be valued at its fair market
value as mutually agreed to by DLJ and the Company), and (b) the
sum of (i) the product of (x) the number of securities of RJR Sold
by the Company (as determined above) and (y) $35.00, plus (ii) the
Company's actual cost (other than interest and other borrowing
charges in connection with the acquisition by the Company of any
securities of RJR) in seeking to effect a Control Event or
Transaction (including legal fees and proxy solicitation fees, but
excluding fees and additional cash compensation payable pursuant to
this Agreement) up to a maximum of $20,000,000 in aggregate (in
connection with any specific Sale of securities of RJR, the
Company's actual cost shall be computed and allocated on a per
security basis based upon the proportion that such securities being
Sold bear to the remaining number of RJR securities that are owned
(as determined above) by the Company and based on actual costs
incurred up to the time of Sale and not previously allocated to a
prior Sale). If any such securities of RJR have not been Sold
within 18 months after the date hereof such securities shall be
deemed to have been sold at the average of the last sale price over
the period beginning 10 trading days immediately preceding July 30,
1998, and ending 10 trading days immediately following July 30,
1998 (and shall be deemed to have been subject to a $0.02 per
security sales commission) and the Company shall promptly pay to
DLJ the additional cash compensation as set forth above. Any
amounts payable pursuant to this paragraph shall be paid promptly
upon Sale (or deemed Sale) of securities of RJR owned by the
Company and, together with such payment, the Company shall provide
DLJ with the calculation on which such payment was based. In the
event of any Sale (or deemed Sale) of securities of RJR owned by
the Company for which the Company does not owe additional cash
compensation to DLJ because such Sale did not result in a Profit
or, together with prior Sale did not result in an aggregate Profit,
the Company shall provide DLJ with the calculations on which such
conclusion is based promptly upon any such Sale. In the event that
any Sale (or deemed Sale) of securities of RJR, would result in a
"Profit" for such transaction of less than zero, the Company shall
provide DLJ with the calculations on which such conclusion is based
promptly upon any such Sale and DLJ shall, promptly upon receipt of
such calculation, refund to the Company an amount equal to ten
percent (10%) of the absolute value of such "Profit", subject to
the following: in no event shall DLJ be obligated to refund any
amount to the Company in excess of the net aggregate amount
previously paid to DLJ pursuant to this paragraph. The Company
agrees that any securities of RJR owned or acquired during the term
of this Agreement by any affiliate of the Company or Mr. Icahn will
be deemed to be owned by the Company for purposes of this
Agreement.
The Company shall make available to DLJ all financial and
other information concerning RJR's business and operations that is
in the Company's possession, control or is within the reasonable
ability of the Company to possess which DLJ reasonably requests as
well as any other information relating to any Transaction or
possible proxy solicitation prepared by the Company or any of its
other advisors. In performing its services hereunder, DLJ shall be
entitled to rely without investigation upon all information that is
available from public sources as well as all other information
supplied to it by or on behalf of the Company or its advisors or
RJR or its advisors and shall not in any respect be responsible for
the accuracy or completeness of, or have any obligation to verify,
the same or to conduct any appraisal of any of RJR's assets. To the
extent consistent with legal requirements, all information given to
DLJ by the Company, unless publicly available or otherwise
available to DLJ without restriction or breach of any
confidentiality arrangement or agreement, will be held by DLJ in
confidence and will not be disclosed to anyone other than DLJ's
agents and advisors without the Company's prior approval or used
for any purpose other than those referred to in this Agreement.
Any advice, written or oral, provided by DLJ pursuant to this
Agreement will be treated by the Company as confidential, will be
solely for the information and assistance of the Company in
connection with its consideration of the Transaction and will not
be reproduced, summarized, described or referred to, or furnished
to any other party or used for any other purpose, except in each
case with our prior written consent.
Please note that DLJ is a full service securities firm engaged
in securities trading and brokerage activities, as well as
providing investment banking and financial advisory services. In
the ordinary course of our trading and brokerage activities, DLJ or
its affiliates may at any time hold long or short positions, and
may trade or otherwise effect transactions, for our own account or
on the accounts of customers, in debt or equity securities of RJR
or other entities that may be involved in a Transaction. We
recognize our responsibility for compliance with Federal laws in
connection with any such activities.
The Company acknowledges and agrees that DLJ has been retained
solely to provide the advice or services set forth in this
Agreement. DLJ shall act as an independent contractor, and any
duties of DLJ arising out of its engagement hereunder shall be owed
solely to the Company.
This Agreement may be terminated by either the Company or DLJ
upon receipt of written notice to that effect by the other party.
In the event DLJ is the terminating party, it will notify the
Company of its intention to terminate this Agreement five business
days prior to the effectiveness of such termination. Except as
provided below, upon any termination or expiration of this
Agreement, DLJ will be entitled to prompt payment of (a) all fees
accrued prior to such termination or expiration, (b) any additional
cash compensation pursuant to clause (i)(c) in the third paragraph
of this Agreement and (c) reimbursement of all out-of-pocket
expenses as described above. In the event that DLJ terminates this
Agreement prior to the completion of the 1997 annual RJR
shareholder meeting (the "Annual Meeting"), DLJ shall refund all
fees paid pursuant to clauses (i)(a) and (b) in the third paragraph
of this Agreement and any additional cash compensation pursuant to
clause (i)(c) in the third paragraph of this Agreement shall not be
payable and to the extent paid, shall be refunded. In the event
that DLJ terminates this Agreement (1) subsequent to the completion
of the Annual Meeting and neither the Company nor any of its
affiliates solicited proxies for the Annual Meeting relating to
control of RJR, (2) prior to completion of any subsequent meeting
of RJR shareholders with respect to which the Company or any of its
affiliates solicits or intends to solicit proxies relating to
control of RJR, and (3) prior to expiration of this Agreement, DLJ
will be entitled to prompt payment of all fees accrued prior to
such termination, but any additional cash compensation pursuant to
clause (i)(c) in the third paragraph of this Agreement shall not be
payable and to the extent paid, shall be refunded. The indemnity
and other provisions contained in Schedule I will also remain
operative and in full force and effect regardless of any
termination or expiration of this Agreement.
This Agreement shall be binding upon and inure to the benefit
of the Company, DLJ, each Indemnified Person (as defined in
Schedule I hereto) and their respective successors and assigns.
This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
The Company irrevocably and unconditionally submits to the
exclusive jurisdiction of any State or Federal court sitting in New
York City over any suit, action or proceeding arising out of or
relating to this Agreement (including Schedule I hereto). The
Company hereby agrees that service of any process, summons, notice
or document by U.S. registered mail addressed to the Company shall
be effective service of process for any action, suit or proceeding
brought in any such court. The Company irrevocably and
unconditionally waives any objection to the laying of venue of any
such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. The Company agrees
that a final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon the
Company and may be enforced in any other courts to whose
jurisdiction the Company is or may be subject, by suit upon such
judgment.
<PAGE>
After reviewing this Agreement, please confirm that the foregoing
is in accordance with your understanding by signing and returning
to me the duplicate of this Agreement attached hereto, whereupon it
shall be our binding Agreement.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:________________
Mark W. Lanigan
Managing Director
Accepted and Agreed
this ____ day of ____________, 1997
High River Limited Partnership
By:________________
Carl Icahn
Chief Executive Officer
Meadow Walk Limited Partnership
By:________________
Carl Icahn
Chief Executive Officer
Barberry Corp.
By:________________
Carl Icahn
Chief Executive Officer
SCHEDULE I
This Schedule I is a part of and is incorporated into that
certain letter agreement (together, the "Agreement") dated January
27, 1997 by and among High River Limited Partnership ("High
River"), Meadow Walk Limited Partnership ("Meadow Walk") and
Barberry Corp. ("Barberry") (together, hereinafter referred to as
the "Company") and Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ").
Each of High River, Meadow Walk, and Barberry will, jointly
and severally, indemnify and hold harmless DLJ, its affiliates and
its parent and its affiliates, and the respective directors,
officers, agents and employees of DLJ, its affiliates and its
parent and its affiliates (DLJ and each such entity or person, an
"Indemnified Person") from and against any losses, claims, damages,
judgments, assessments, costs and other liabilities (collectively
"Liabilities"), and will reimburse each Indemnified Person for all
reasonable fees and expenses (including the reasonable fees and
expenses of counsel) (collectively, "Expenses") as they are
incurred in investigating, preparing, pursuing or defending any
claim, action, proceeding or investigation (including any
preparation relating to any claim, action, proceeding or
investigation to which such Indemnified Person is not a party, but
in which such Indemnified Person is required by law or regulation
to participate) (collectively, "Actions"), (i) caused by, or
arising out of or in connection with, any untrue statement or
alleged untrue statement of a material fact contained in any proxy
statement provided to RJR's shareholders by the Company (including
any amendments thereof and supplements thereto, collectively, the
"Disclosure Documents") or by any omission or alleged omission to
state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading (other than untrue statements or alleged untrue
statements in, or omissions or alleged omissions from, information
relating to an Indemnified Person furnished in writing by or on
behalf of such Indemnified Person expressly for use in the
Disclosure Documents) or (ii) otherwise arising out of or in
connection with advice or services rendered or to be rendered by
any Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Indemnified Person's actions or
inactions in connection with any such advice, services or
transactions; provided that, in the case of clause (ii) only, the
Company will not be responsible for any Liabilities or Expenses of
any Indemnified Person to the extent that they are determined by a
judgment of a court of competent jurisdiction which is no longer
subject to appeal or further review to have resulted from such
Indemnified Person's gross negligence or willful misconduct in
connection with any of the advice, actions, inactions or services
referred to above. If multiple claims are brought against an
Indemnified Person in an arbitration, with respect to at least one
of which indemnification is permitted under applicable law and
provided for under this Agreement, the Company agrees that any
arbitration award shall be conclusively deemed to be based on
claims as to which indemnification is permitted and provided for,
except to the extent the arbitration award expressly states that
the award, or any portion thereof, is based solely on a claim as to
which indemnification is not available. Each of High River, Meadow
Walk, and Barberry also agrees, jointly and severally, to reimburse
each Indemnified Person for all Expenses as they are incurred in
connection with enforcing such Indemnified Person's rights under
this Agreement (including, without limitation, its rights under
this Schedule I).
Upon receipt by an Indemnified Person of actual notice of an
Action against such Indemnified Person with respect to which
indemnity may be sought under this Agreement, such Indemnified
Person shall promptly notify the Company in writing; provided that
failure so to notify the Company shall not relieve the Company from
any liability which the Company may have on account of this
indemnity or otherwise, except to the extent the Company shall have
been materially prejudiced by such failure. The Company shall have
the right to assume the defense of any such Action including the
employment of counsel reasonably satisfactory to DLJ. Any
Indemnified Person shall have the right to employ separate counsel
in any such action and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Person, unless: (i) the Company has failed promptly to
assume the defense and employ counsel or (ii) the named parties to
any such Action (including any impleaded parties) include such
Indemnified Person and the Company, and such Indemnified Person
shall have been advised by counsel that there may be one or more
legal defenses available to it which conflict with those available
to the Company; provided that the Company shall not in such event
be responsible hereunder for the fees and expenses of more than one
firm of separate counsel in connection with any Action in the same
jurisdiction, in addition to any local counsel. The Company shall
not be liable for any settlement of any Action effected without its
prior written consent. In addition, the Company will not, without
prior written consent of DLJ, settle, compromise or consent to the
entry of any judgment in or otherwise seek to terminate any pending
or threatened Action in respect of which indemnification or
contribution may be sought hereunder unless such settlement,
compromise, consent or termination includes an unconditional
release of each Indemnified Person from all Liabilities arising out
of such Action.
In the event the foregoing indemnity is unavailable to an
Indemnified Person as a result of a determination by a court of
competent jurisdiction which is not longer subject to appeal or
further review that it is against public policy, the Company shall
contribute to the Liabilities and Expenses paid or payable by such
Indemnified Person in such proportion as is appropriate to reflect
the relative benefits to the Company and its shareholders, on the
one hand, and to DLJ, on the other hand, of the matters
contemplated by this Agreement and the relative fault of the
Company, on the one hand, and DLJ, on the other hand, in connection
with the matters as to which such Liabilities or Expenses relate,
as well as any other relevant equitable considerations; provided
that in no event shall the Company contribute less than the amount
necessary to ensure that all Indemnified Persons, in the aggregate,
are not liable for any Liabilities and Expenses in excess of the
amount of fees actually received by DLJ pursuant to this Agreement.
For purposes of this paragraph, the relative benefits to the
Company and its shareholders, on the one hand, and to DLJ, on the
other hand, of the matters contemplated by this Agreement shall be
deemed to be in the same proportion as (a) the total value received
or contemplated to be received by the Company or the Company's
shareholders, as the case may be, in the transaction or
transactions that are within the scope of this Agreement, whether
or not any such transaction is consummated, bears to (b) the fees
paid or to be paid to DLJ under this Agreement.
The Company also agrees that no Indemnified Person shall have
any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or
services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated hereby or
any Indemnified Person's actions or inactions in connection with
any such advice, services or transactions except for Liabilities
(and related Expenses) of the Company to the extent that they are
determined by a judgment of a court of competent jurisdiction which
is no longer subject to appeal or further review to have resulted
from such Indemnified Person's gross negligence or willful
misconduct in connection with any such advice, actions, inactions
or services.
If any term, provision, covenant or restriction contained in
this Schedule I is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions,
covenants and restrictions contained in this Agreement shall remain
in full force and effect and shall in no way be affected, impaired
or invalidated.
The reimbursement, indemnity and contribution obligations of
the Company set forth herein shall apply to any modification of
this Agreement and shall remain in full force and effect regardless
of any termination of, or the completion of any Indemnified
Person's services under or in connection with, this Agreement.
EXHIBIT 2
Contact: Steven Bruce
The Abernathy MacGregor Group Inc.
212-371-5999
THOMAS RATTIGAN NAMES TEAM OF ADVISORS TO SUPPORT BID TO UNSEAT
RJR NABISCO BOARD OF DIRECTORS
NEW YORK, N.Y., FEBRUARY 3, 1997 -- Thomas Rattigan today named a
team of advisors, supporting the launch of his efforts to elect a
new board of directors at RJR Nabisco this spring.
The advisors are Donaldson Lufkin & Jenrette; Kaye, Scholer,
Fierman, Hays & Handler, LLP and Gordon Altman Butowsky Weitzen
Shalov & Wein will provide outside legal counsel; Georgeson &
Co., which will solicit proxies; and The Abernathy MacGregor
Group Inc., which will provide financial public relations and
investor relations counsel.
"As we prepare to file our proxy, it was important that we have a
first-class team of advisors to counsel us on the numerous issues
that will arise in our plan to unseat the RJR Board of
Directors," said Thomas Rattigan, who heads the slate of
independent directors being nominated to RJR's board.
"We are on schedule with every element of our solicitation plan.
We believe that the shareholders of RJR will find our approach to
accomplishing the long promised spin-off of Nabisco the most
likely to succeed in a timely manner. It will also unlock the
true value of RJR's underperforming stock," Mr. Rattigan
concluded.
Carl Icahn, RJR's largest individual shareholder said "I am very
pleased that Tom has put together this extremely competent
advisory team as well as an outstanding group of individual
directors to be nominated to RJR's board."
"Barnburner" turns into false alarm
Commenting on RJR's year-end earnings report and in contrast to
Philip Morris, Mr. Rattigan said, "Despite Mr. Goldstone's
prediction of a "barnburner," the market saw through his smoke
screen and declared it a false alarm. RJR's operating income has
been in a downward spiral dropping 4% in 1996 and over 23% since
1991. Philip Morris continues to dominate the cigarette unit
growth between the two companies and has realized almost 90% of
that growth since 1991 as RJR's competitive share continues to
erode versus Philip Morris.
"After his many years of association with RJR and in his second
year as CEO, Mr. Goldstone remains unable to reverse the
continuing erosion in RJR's operating income and a declining
share of market versus his primary competitor, " Mr. Rattigan
concluded.
Certain Additional Information
The participants in the solicitation of proxies are
Carl C. Icahn ("Icahn"), High River Limited Partnership ("High
River"), Riverdale LLC ("Riverdale"), Barberry Corp.,
("Barberry"), Meadow Walk Limited Partnership ("Meadow Walk"),
American Real Estate Holdings, L.P. ("AREH"), American Real
Estate Partners, L.P. ("AREP"), American Property Investors
("API"), Icahn & Co., Inc. ("Icahn & Co."), Thomas Rattigan
("Rattigan"), Dewitt Bowman ("Bowman"), Ivan Burns ("Burns"),
Seymour Fliegel ("Fliegel"), Paul Gibson ("Gibson"), Keith
Gollust ("Gollust"), Robert Lawler ("Lawler"), Carlos Resendez
("Resendez"), Robert Slater ("Later"), Jack Wasserman
("Wasserman"), Harold First ("First") and Miles Bender
("Bender").
High River is the direct beneficial owner of 13,
964,300 shares ("Shares") of RJR Nabisco Holdings Corp. ("RJR")
common stock. Riverdale is the indirect beneficial owner of 13,
964,300 Shares. Barberry is the direct beneficial owner of
140,000 Shares and the indirect beneficial owner of 2,703,800
Shares. Meadow Walk is the direct beneficial owner of 2,703,800
Shares. AREH is the direct beneficial owner of 3,121,700 Shares.
Both AREP and API are indirect beneficial owners of 3,121,700
Shares. Icahn & Co. is the record owner of 500 Shares. Burns
beneficially owns 1000 Shares. Fliegel beneficially owns 80
Shares. Wasserman beneficially owns 600 Shares. Rattigan
beneficially owns 1000 Shares.
Riverdale, the general partner of High River, is over
99 percent owned by Icahn. Barberry, the sole general partner of
Meadow Walk, is wholly owned by Icahn. American Property
Investors, the general partner of both AREH and AREP, is wholly
owned by Icahn. As such, Icahn may be deemed to be the indirect
beneficial owner of 19,929,800 Shares.
In connection with Rattigan's provision of consulting
services to High River regarding the proxy solicitation, he will
receive $333,333.33 per month for a period of six (6) months
commencing November 1, 1996, and additional compensation, should
he remain a consultant to High River after the expiration of six
months. In addition, High River has agreed to pay Bowman, Burns,
Fliegel, Gibson, Gollust, Lawler, Resendez, Slater and Wasserman
(the "Nominees") the sum of $25,000 for acting as Nominees. Such
Nominees will receive an additional $25,000 payment if not
elected to the Board of Directors of RJR. In addition, High
River has agreed to pay Bender and First (the "Alternate
Nominees") the sum of $10,000 for acting in the capacity of
Alternate Nominees, an additional $15,000 in the event that they
become Nominees as well as $25,000 if, as Nominees, they are not
elected to the Board of Directors of RJR.
