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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 24, 1997
Smith Barney Holdings Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-12484 06-1274088
-------------- ---------------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
388 Greenwich Street, New York, NY 10013
(Address of principal executive offices) (Zip Code)
(212) 816-6000
(Registrant's telephone number, including area code)
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SMITH BARNEY HOLDINGS INC.
CURRENT REPORT ON FORM 8-K
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------- ----
<S> <C> <C>
1.01 Distribution Agreement, dated July 24, 1997, between
the Company and Smith Barney Inc., relating to the
offer and sale of the Company's Medium-Term Notes,
Thrid Series, Due Nine Months or More from Date of
Issue.
4.01 Form of Fixed Rate Note for the Company's Medium-
Term Notes, Third Series, Due Nine Months or More
from Date of Issue.
4.02 Form of Floating Rate Note for the Company's
Medium-Term Notes, Third Series, Due Nine Months
or More from Date of Issue.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: July 24, 1997 SMITH BARNEY HOLDINGS INC.
By: /s/ Mark I. Kleinman
-------------------------------
Mark I. Kleinman
Executive Vice President and
Treasurer
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Exhibit 1.01
Smith Barney Holdings Inc.
Medium-Term Notes, Third Series
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
July 24, 1997
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Smith Barney Holdings Inc., a Delaware corporation (the "Company"),
confirms its agreement with the Agent (as defined below) with respect to the
issue and sale by the Company of its Medium-Term Notes, Third Series (the
"Notes"). The Notes are to be issued under an Indenture dated as of May 15,
1993, as supplemented by the First Supplemental Indenture dated as of September
1, 1993 and the Second Supplemental Indenture dated as of December 12, 1996 (as
so supplemented or as it may from time to time be further supplemented or
amended by one or more indentures supplemental thereto, the "Indenture"),
between the Company and Citibank, N.A., as trustee (the "Trustee"). The Notes
will have the maturities, interest rates (whether fixed or floating), redemption
provisions and other terms set forth in a pricing supplement to the Prospectus
referred to below. The Notes may be denominated in U.S. dollars, foreign
currencies or foreign composite currency units (the "Specified Currency") as may
be specified in the applicable pricing supplement.
Subject to the terms and conditions stated herein and subject
to the reservation by the Company of the right to sell Notes to the Agent acting
as principal at a discount for its own account or for resale to one or more
investors or other dealers and the Company's right to sell Notes directly to
investors on its own behalf or through other agents (provided that any other
agent will execute an agreement with the Company which contains substantially
the same terms and conditions contained herein and that the Company will notify
the Agent of its agreement with any other agents, dealers or underwriters), the
Company hereby appoints the Agent as an agent of the Company for the purpose of
soliciting offers to purchase the Notes. In addition, the Agent
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may also purchase Notes as principal and the Company will enter into a Terms
Agreement (referred to below) relating to such sale in accordance with the
provisions of Section L.(b) hereof. For the purposes of this Agreement, the term
"Agent" shall refer to Smith Barney Inc.
1. Solicitations by the Agent of Offers to Purchase; Purchases
as Principal.
(a) Solicitations as Agent. Following the Commencement Date
(referred to below), the Company shall notify the Agent from time to time as to
the commencement of a period during which the Notes may be offered and sold by
the Agent (each period, commencing with such a notification and ending at such
time as the authorization for offers and sales through the Agent shall have been
suspended by the Company or the Agent as provided hereunder, being herein
referred to as an "Offering Period"). On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Agent agrees to use its reasonable best efforts to solicit offers to
purchase the Notes during each Offering Period upon the terms and conditions set
forth in the Prospectus as then amended and supplemented. The Company reserves
the right, in its sole discretion, to suspend solicitation of purchases of the
Notes commencing at any time for any period of time or permanently. Upon receipt
of instructions from the Company, the Agent will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised the
Agent that such solicitation may be resumed.
Unless otherwise agreed to, the Company agrees to pay the
Agent at the time of delivery of and payment for the Notes, as consideration for
soliciting the sale of each Note, a commission equal to the percentage set forth
on Schedule 1 hereto of the price to the public of each Note sold by the Company
as the result of a solicitation by the Agent. Without the prior approval of the
Company, the Agent (acting on an agency basis) may not reallow any portion of
the commission payable pursuant hereto to dealers or purchasers in connection
with the offer and sale of any Notes.
The Agent is authorized to solicit orders for the Notes only
in principal amounts of $1,000 or any amount in excess thereof which is a
multiple of $1,000 or, in the case of Notes denominated in a Specified Currency
other than U.S. dollars, in the denominations set forth in the applicable
pricing supplement, at a purchase price equal to 100% of the principal amount of
the Notes, unless otherwise mutually agreed upon by the purchaser and the
Company and specified in the applicable pricing supplement. The Agent shall
communicate to the Company, orally or in writing,
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each reasonable offer or indication of interest to purchase Notes received by
the Agent as Agent. The Company shall have the sole right to accept offers to
purchase the Notes and may reject any such offer in whole or in part. The Agent
shall have the right to reject, in its discretion reasonably exercised, any
offer received by it to purchase the Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreements contained herein. In
soliciting offers to purchase the Notes in its capacity as agent of the Company,
the Agent is acting solely as agent for the Company, and not as principal, and
does not assume any obligation toward or relationship of agency or trust with
any purchaser of the Notes (other than any such obligation or relationship which
the Agent assumes independently of this Agreement). The Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by the Agent and
accepted by the Company, but the Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason. Under
no circumstances will the Agent be obligated to purchase any Notes for its own
account except pursuant to subparagraph (b) below.
(b) Purchases as Principal. Each sale of Notes to the Agent as
principal shall be made in accordance with the terms of this Agreement and the
Agent and the Company will enter into a Terms Agreement that will provide for
the sale of such Notes to and the purchase thereof by the Agent. Each "Terms
Agreement" may take the form of an exchange of any form of written
telecommunication or oral communication followed by written confirmation or
telecommunication between the Agent and the Company and shall be with respect to
such information (as applicable) as is specified in Exhibit A hereto.
The Agent's commitment to purchase Notes as principal shall be
deemed to have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and conditions
herein set forth. Each agreement by the Agent to purchase Notes as principal
(whether or not set forth in a Terms Agreement) shall specify the principal
amount of Notes to be purchased by the Agent pursuant thereto, the maturity date
of such Notes, the price to be paid to the Company for such Notes, the interest
rate and interest rate formula, if any, applicable to such Notes and any other
terms of such Notes. Each such agreement shall also specify any requirements for
officers' certificates, opinions of counsel and letters from the independent
public accountants of the Company
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pursuant to Section 4 hereof. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Notes by the Agent.
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. Each date of delivery of and payment for
Notes to be purchased by the Agent as principal or as agent or by any other
purchaser is referred to herein as a "Settlement Date."
Upon the Company's request, the Agent will notify the Company
either orally or in writing (as specified by the Company) of the aggregate
principal amount of Notes held by the Agent as principal purchased pursuant to a
Terms Agreement pursuant to this Agreement.
(c) Procedures. The Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by them
in the Medium-Term Notes Administrative Procedures attached hereto as Exhibit B
(the "Procedures"). The Procedures may be amended only by written agreement of
the Company and the Agent.
(d) Delivery. The documents required to be delivered by
Section 4 of this Agreement shall be delivered at the office of Skadden, Arps,
Slate, Meagher & Flom LLP, counsel for the Agent, 919 Third Avenue, New York,
N.Y. 10022, on July 24, 1997 (the "Commencement Date").
2. Representations and Warranties. The Company represents and warrants
to and agrees with the Agent as of the Commencement Date:
(a) Registration Statements (File Nos. 333-17831 and
333-30175) in respect of $750,000,000 aggregate amount of debt securities of the
Company, including the Notes, have been filed with the Securities and Exchange
Commission (the "Commission"); such registration statements and any
post-effective amendment thereto, each in the forms heretofore delivered or to
be delivered to the Agent, excluding exhibits to such registration statements
but including all documents incorporated by reference therein, have been
declared effective by the Commission in such forms; no other document with
respect to such registration statements (other than a document incorporated by
reference therein) has heretofore been filed or transmitted for filing with the
Commission; and no stop order suspending the effectiveness of either
registration
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statement has been issued and no proceeding for that purpose has been instituted
or threatened by the Commission (any preliminary prospectus included in the
Second Registration Statement (as defined herein) or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), being hereinafter called a
"Preliminary Prospectus"); the various parts of each registration statement,
including all exhibits thereto and the documents incorporated by reference in
the prospectus contained in the registration statement at the time such part of
such registration statement became effective but excluding the Statements of
Eligibility under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), pertaining to the Indenture (the "Forms T-1"), each as amended
at the time such part became effective, being hereinafter collectively called
(i) in the case of Registration Statement No. 333-17831, the "First Registration
Statement" and (ii) in the case of Registration Statement No. 333-30175, the
"Second Registration Statement;" the First Registration Statement and the Second
Registration Statement being hereinafter from time to time called the
"Registration Statements;" the prospectus included in the Second Registration
Statement(including the prospectus supplement) relating to the Notes, in the
form in which it has most recently been filed, or transmitted for filing, with
the Commission on or prior to the date of this Agreement being hereinafter
called the "Prospectus;" any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the Act,
as of the date of such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus, including any supplement to the Prospectus that sets forth only
the terms of the particular issue of the Notes (a "Pricing Supplement"), shall
be deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference in such Preliminary Prospectus or the Prospectus, as the case may be;
any reference to any amendment to either Registration Statement shall be deemed
to include any report of the Company filed pursuant to the Exchange Act after
the effective date of such Registration Statement that is incorporated by
reference in such Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to and include the Prospectus
as amended or supplemented in relation to the Notes sold pursuant to this
Agreement, in the form in which it is filed
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with the Commission pursuant to Rule 424(b) under the Act, including any
documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference in the Prospectus, or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder;
(c) Each Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto, and the Indenture, conform or will
conform in all material respects with the applicable requirements of the Act and
the Trust Indenture Act, and the rules and regulations of the Commission
thereunder.
(d) The First Registration Statement as of its effective date
did not, and the Second Registration Statement, as amended as of any
time, did not and will not, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading and the Prospectus, as
amended and supplemented as of any such time, did not and will not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to the information contained in or omitted
from the Second Registration Statement or the Prospectus or any amendment
thereof or supplement thereto in reliance upon, and in conformity with,
information furnished in writing to the Company by or on behalf of the Agent
specifically for use in the Second Registration Statement and the Prospectus or
any amendment thereof or supplement thereto.
(e) The Notes have been duly authorized and, when executed and
authenticated in accordance with the Indenture and delivered to and duly paid
for by the purchasers thereof, will constitute valid and binding obligations of
the Company, enforceable in accordance with their respective terms and entitled
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to the benefits of the Indenture (subject, as to enforcement, to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and to general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law); the Indenture has been duly authorized by the Company and
qualified under the Trust Indenture Act; and the Indenture conforms to the
descriptions thereof in the Prospectus as amended or supplemented to relate to
such issuance of Notes.
(f) Since the date of the most recent financial statements
included in the Prospectus, as amended or supplemented, there has not been any
material adverse change in the consolidated financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, which is not
disclosed in the Prospectus, as amended or supplemented.
3. Agreements of the Company. The Company agrees with the
Agent that:
(a) At any time during an Offering Period or during the time a
prospectus relating to the Notes is required to be delivered under the Act: (i)
prior to amending or supplementing either Registration Statement or the
Prospectus, the Company will furnish the Agent and the Agent's counsel with a
copy of each proposed amendment or supplement (other than an amendment or
supplement to be made pursuant to incorporation by reference of a document filed
under the Exchange Act, or a Pricing Supplement or an amendment or supplement
relating solely to an offering of debt securities other than the Notes); and
(ii) prior to filing any documents under the Exchange Act to be incorporated by
reference into the Prospectus (other than documents relating solely to an
offering of debt securities other than the Notes), the Company will notify the
Agent and the Agent's counsel orally of the general subject matter of such
filing and will furnish copies of such filings to the Agent and the Agent's
counsel simultaneously with, or as promptly as practicable after, the filing of
such documents with the Commission. Subject to the foregoing sentence, the
Company will promptly cause the Prospectus together with each amendment thereof
or supplement thereto to be mailed or otherwise transmitted to the Commission
for filing pursuant to Rule 424(b)
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by an appropriate method or will promptly cause the Prospectus together with
each amendment thereof or supplement thereto to be filed with the Commission
pursuant to said Rule. If the Prospectus is amended or supplemented (other than
a Pricing Supplement or an amendment or supplement relating solely to an
offering of debt securities other than the Notes), the Agent shall be furnished
with such information relating to such filing as it may reasonably request, and
the Agent shall not be obligated to solicit offers to purchase Notes so long as
it is not reasonably satisfied that such amendment or supplement complies in all
material respects with the provisions of the Act and the Exchange Act. At any
time during an Offering Period or during the time a prospectus relating to the
Notes is required to be delivered under the Act, the Company will promptly
advise the Agent of (i) the filing of any amendment or supplement to the
Prospectus (other than a Pricing Supplement or an amendment or supplement
relating solely to an offering of debt securities other than the Notes), (ii)
the filing or effectiveness of any amendment to either Registration Statement,
(iii) the receipt by the Company of comments from the Commission relating to or
requests by the Commission for any amendment of either Registration Statement or
any amendment of or supplement to the Prospectus or for any additional
information, (iv) the issuance by the Commission of any stop order suspending
the effectiveness of either Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its reasonable best
efforts to prevent the issuance of any such stop order or notice of suspension
of qualification and, if issued, to obtain as soon as possible the withdrawal
thereof. Upon the Agent's request, the Company will within a reasonable time
inform the Agent of the aggregate principal amount of Notes registered under the
Registration Statements that remain unissued.
(b) Within the time during which a prospectus relating to the
Notes is required to be delivered under the Act, the Company will comply with
all requirements imposed upon it by the Act, as now and hereafter amended, and
by the rules and regulations of the Commission thereunder, as from time to time
in force, so far as necessary to permit the continuance of sales of or dealings
in the Notes as contemplated by the provisions hereof and the Prospectus. If
during such period any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to
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state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if, in the opinion of the
Company, during such period it is necessary to amend or supplement the Second
Registration Statement or the Prospectus to comply with the Act, the Company
will promptly notify the Agent to suspend the solicitation of offers to purchase
the Notes in its capacity as Agent and to cease sales of any Notes it may then
own as principal and, to the extent required under the provision in the last
sentence of this subsection (b), the Company will promptly amend or supplement
such Registration Statement or the Prospectus (at the expense of the Company) so
as to correct such statement or omission or effect such compliance. If such
amendment or supplement, and any documents, certificates, opinions and letters
furnished to the Agent pursuant to subsections (j), (k) and (l) of this Section
3 in connection with the preparation and filing of such amendment or supplement
are reasonably satisfactory in all respects to the Agent, upon the filing of
such amendment or supplement with the Commission or effectiveness of an
amendment to such Registration Statement, the Agent will resume solicitation of
offers to purchase Notes hereunder. Notwithstanding the foregoing, the Company
shall not be required to comply with the provisions of subsection (b) of this
Section 3 during any period from the time the Agent shall have been notified to
suspend the solicitation of offers to purchase the Notes in its capacity as
Agent (whether under this subparagraph (b) or otherwise under this Agreement) to
the time the Company shall determine that solicitation of offers to purchase the
Notes should be resumed; provided that if the Agent holds any Notes as principal
purchased pursuant to a Terms Agreement or otherwise pursuant to this Agreement,
the Company shall comply with the provisions of subsection (b) of this Section 3
during the period when a Prospectus is required to be delivered pursuant to the
Act.
(c) The Company will (i) comply, in a timely manner, with all
applicable requirements under the Exchange Act relating to the filing with the
Commission of the Company's reports pursuant to Section 13(a), 13(c) or 15(d) of
the Exchange Act and, if then applicable, of the Company's proxy statements
pursuant to Section 14 of the Exchange Act.
(d) The Company will use its best efforts to qualify the Notes
for sale under the securities laws of such jurisdictions as the Agent reasonably
designates, to maintain such qualifications in effect so long as required for
the distribution of the Notes and, if requested by the Agent, to arrange for the
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determination of the legality of the Notes for purchase by institutional
investors, except that the Company shall not be required in connection therewith
to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) The Company will furnish to the Agent copies of the
Registration Statements and the Prospectus (including all documents incorporated
by reference therein), and all amendments of and supplements to the Registration
Statements or the Prospectus which are filed with the Commission during the
period in which a prospectus relating to the Notes is required to be delivered
under the Act (including all documents filed by an amendment or supplement with
the Commission during such period which are deemed to be incorporated by
reference therein), in each case in such quantities as the Agent may from time
to time reasonably request.
(f) So long as any of the Notes are outstanding, the Company
agrees to furnish to the Agent, upon its reasonable request, as soon as
available, all reports and financial statements filed by or on behalf of the
Company with the Commission or any national securities exchange.
(g) The Company will make generally available to its security
holders and to the Agent as soon as practicable, but in any event not later than
15 months after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning after
the date upon which any amendment of or supplement to the Prospectus (other than
a Pricing Supplement or an amendment or supplement relating solely to an
offering of debt securities other than the Notes) is filed pursuant to Rule 424
under the Act, which shall satisfy the provisions of Section 11(a) of the Act.
(h) The Company shall, whether or not any sale of Notes is
consummated or this Agreement is terminated, pay all expenses incident to the
performance of its obligations under this Agreement and under any Terms
Agreement, including, without limitation, the fees and disbursements of its
accountants and counsel, the cost of printing (or other production) and delivery
of the Registration Statements and the Prospectus, all amendments thereof and
supplements thereto, the Indenture, and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the fees and
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disbursements (including reasonable fees of counsel) incurred in connection with
the qualification of the Notes for sale and determination of eligibility for
investment of the Notes under the securities or Blue Sky laws of such
jurisdictions as the Agent may designate, the fees and disbursements of the
Trustee, the fees of any agency that rates the Notes, the fees and expenses in
connection with any listing of the Notes on the New York Stock Exchange, Inc.
(the "New York Stock Exchange") or such other securities exchange agreed to in
writing by the Company, the fees and expenses incurred with respect to any
filing with the National Association of Securities Dealers, Inc. and the
reasonable fees and disbursements of Skadden, Arps, Slate, Meagher & Flom LLP,
as counsel for the Agent, or other counsel reasonably satisfactory to both the
Agent and the Company, and such other expenses, including, without limitation,
advertising expenses as may be agreed upon by the Agent and the Company;
provided, however, that with respect to any purchase of Notes by the Agent as
principal pursuant to a Terms Agreement, the fees and disbursements of Skadden,
Arps, Slate, Meagher & Flom LLP or other counsel to the Agent shall not be paid
by the Company.
(i) During the term of this Agreement, the Company shall
furnish to the Agent such relevant documents and certificates of officers of the
Company relating to the business, operations and affairs of the Company, the
Registration Statements, the Prospectus, any amendments thereof or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures, any Terms
Agreement and the performance by the Company of its obligations hereunder or
thereunder as the Agent may from time to time reasonably request and shall
promptly notify the Agent orally, followed by written notice of any downgrading,
or of its receipt of any notice of any intended downgrading, in the rating
accorded any of the Company's securities by Moody's Investor Service or Standard
& Poor's Corporation or, if one of them no longer rates the securities of the
Company, another "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Act.
(j) Each time either Registration Statement or the Prospectus
is amended or supplemented (other than a Pricing Supplement or an amendment or
supplement relating solely to an offering of debt securities other than the
Notes) and each time an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q, or a Report on Form 8-K (but only if the Agent so requests within a
reasonable time after its filing) filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, the
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Company will deliver or cause to be delivered forthwith to the Agent a
certificate of the Company signed by the Chairman of the Board, any Vice
Chairman, the President or any Vice President and by the principal financial or
accounting officer of the Company (or another officer or officers acceptable to
the Agent), dated the date of the effectiveness of such amendment or the date of
filing with the Commission of such supplement or document, as the case may be,
in form reasonably satisfactory to the Agent, to the effect that the statements
contained in the certificate referred to in Section 4(b)(iii) that was last
furnished to the Agent (either pursuant to Section 4(b)(iii) or pursuant to this
Section 3(j)) are true and correct at the time of the effectiveness of such
amendment or the time of filing of such supplement or document, as the case may
be, as though made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statements, as amended at the time of
effectiveness of such amendment, and to the Prospectus, as amended and
supplemented at the date of such certificate) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
4(b)(iii) but modified, if necessary, to relate to the Registration Statements,
as amended at the time of the effectiveness of such amendment, and to the
Prospectus, as amended and supplemented at the date of such certificate.
(k) Each time either Registration Statement or the Prospectus
is amended or supplemented (other than a Pricing Supplement or an amendment or
supplement relating solely to an offering of debt securities other than the
Notes), and each time an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q or a Report on Form 8-K (but only if the Agent so requests within a
reasonable time after its filing) filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, the Company shall furnish to or
cause to be furnished forthwith to the Agent the written opinion of the General
Counsel of the Company or other counsel reasonably satisfactory to the Agent
dated the date of the effectiveness of such amendment or the date of filing with
the Commission of such supplement or document, as the case may be, in form
reasonably satisfactory to the Agent, to the effect set forth in Exhibit C
hereto. In lieu of such opinion, counsel last furnishing such an opinion to the
Agent may furnish to the Agent a letter to the effect that the Agent may rely on
such last opinion to the same extent as though it were dated the date of such
letter and authorizing reliance on such last opinion (except that statements in
such last opinion will be deemed to relate to the Registration Statements, as
amended at the time of the
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effectiveness of such amendment, and to the Prospectus, as amended and
supplemented at the date of such letter).
(l) Each time that either Registration Statement or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information (other than a Pricing Supplement or any amendment or
supplement relating solely to an offering of debt securities other than the
Notes) and each time an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q or a Report on Form 8-K (but only if the Agent so requests within a
reasonable time after its filing) filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus to set forth financial information
included in or derived from the Company's consolidated financial statements or
accounting records as of the end of the most recent fiscal quarter or fiscal
year, the Company shall cause Coopers & Lybrand L.L.P., its independent
certified public accountants, forthwith to furnish the Agent a letter, dated the
date of the effectiveness of such amendment or the date of filing of such
supplement or document, as the case may be, in form satisfactory to the Agent,
of the same tenor as the letter referred to in Section 4(b)(iv) hereof but
modified to relate to the Registration Statements and Prospectus, as amended and
supplemented to the date of such letter, with such changes as may be necessary
to reflect changes in the financial statements and other information derived
from the accounting records of the Company; provided, that if either
Registration Statement or the Prospectus is amended or supplemented solely to
include or incorporate by reference financial information with respect to a
fiscal quarter, Coopers & Lybrand L.L.P. may limit the scope of such letter to
the unaudited financial statements included in such amendment or supplement.
(m) Each acceptance by the Company of an offer for the
purchase of Notes and each sale of Notes to the Agent as principal shall be
deemed to be an affirmation that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and correct in
all material respects at the time of such acceptance or sale, as the case may
be, as though made at and as of such time, and an undertaking that such
representations and warranties will be true and correct in all material respects
at the time of delivery to the purchaser or his agent, or the Agent, or the
Agent as principal, of the Notes relating to such acceptance, as the case may
be, as though made at and as of such time (and it is understood that such
representations and warranties shall relate to the Registration
13
<PAGE> 14
Statements and the Prospectus as amended and supplemented to each such time).
(n) Anything to the contrary in subsections (i), (j), (k) and (l) of
this Section 3 notwithstanding, if, at the time of any required notice,
amendment or supplement to either Registration Statement or the Prospectus, the
Company shall have instructed the Agent to suspend solicitation of offers to
purchase the Notes in its capacity as Agent of the Company and the Agent does
not then hold any Notes acquired by it as principal pursuant to a Terms
Agreement, the Company shall not be obligated to furnish or cause to be
furnished to the Agent any notice, certificate, opinion or letter otherwise
required until such time as it shall determine that solicitation of offers to
purchase the Notes should be resumed; and provided further that, prior to
resuming such solicitation the Agent shall be entitled to receive any such
notices, certificates, opinions or letters not previously furnished, accurate as
of the date of such notice, certificate, opinion or letter.
4. Conditions to the Obligations of the Agent. The Agent's obligations
to solicit offers to purchase Notes as agent of the Company, the Agent's
obligations to purchase Notes as principal pursuant to any Terms Agreement or
otherwise and the obligation of any other purchaser to purchase Notes from the
Company will be subject to the accuracy in all material respects of the
representations and warranties on the part of the Company herein contained, to
the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed (in the case of the Agent's obligations
to solicit offers to purchase Notes, at the time of such solicitation, and, in
the case of the Agent's or any other purchaser's obligation to purchase Notes,
at the time the Company accepts the offer to purchase such Notes and at the time
of purchase) and (in each case) to the following additional conditions precedent
when and as specified:
(a) On the corresponding Settlement Date:
(i) There shall not have occurred any change in or
affecting particularly the business or properties of the Company and
its subsidiaries from that set forth in the Second Registration
Statement, as amended or supplemented, that, in the Agent's judgment,
makes it impracticable to
14
<PAGE> 15
market the Notes on the terms and in the manner contemplated in the
Prospectus except, in the case of any purchase of Notes by the Agent as
principal, as disclosed to the Agent in writing by the Company before
it accepted the offer to purchase such Notes.
(ii) There shall not have occurred any (A) suspension
or material limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market, (B)
declaration of a general moratorium on commercial banking activities in
New York by either federal or New York state authorities or (C) any
outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency that, in
the Agent's judgment, is material and adverse and, in the case of any
of the events described in clauses (ii)(A) through (C), such event
makes it, in the Agent's judgment, impracticable to market the Notes on
the terms and in the manner contemplated by the Prospectus, as amended
or supplemented, except, in the case of any purchase of Notes by the
Agent as principal, for any such event occurring before the Company
accepted the offer to purchase such Notes.
(iii) There shall not have been any downgrading, nor
any notice given of any intended downgrading, in the rating accorded
any of the Company's securities by Moody's Investor Service or Standard
& Poor's Corporation or, if one of them no longer rates the securities
of the Company, another "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Act, except, in the case of any purchase of Notes by the
Agent as principal, as disclosed to the Agent in writing by the Company
before it accepted the offer to purchase such Notes.
(b) On the Commencement Date and, if called for by any
agreement by the Agent to purchase Notes as principal, on the
corresponding Settlement Date:
(i) The Company shall have furnished to the Agent the
opinion of the General Counsel of the Company (or other counsel for the
Company reasonably acceptable to the
15
<PAGE> 16
Agent) on the Commencement Date, and, on the Settlement Date will
furnish the opinion of the General Counsel of the Company (or other
counsel for the Company reasonably acceptable to the Agent) and, if
called for by a Terms Agreement, the opinion of other counsel, dated
the Commencement Date or the Settlement Date, as the case may be, to
the effect set forth in Exhibit C hereto.
(ii) The Agent shall have received from Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Agent (or other
counsel reasonably acceptable to the Agent and the Company), an opinion
dated the Commencement Date or the Settlement Date, as the case may be,
to the effect set forth in Exhibit D hereto.
(iii) The Company shall have furnished to the
Agent a certificate of the Company, signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice
President and by the principal financial or accounting officer
of the Company (or another officer or officers acceptable to the
Agent), dated the Commencement Date or the Settlement Date, as the case
may be, to the effect that each signatory of such certificate has
carefully examined the Registration Statements, as amended as of the
date of such certificate, the Prospectus, as amended and supplemented
as of the date of such certificate, and this Agreement and that:
(A) the representations and
warranties of the Company in this Agreement are true and
correct in all material respects on and as of the date of
such certificate with the same effect as if made on the date
of such certificate and the Company has complied in all
material respects with all the agreements and satisfied in
all material respects all the conditions on its part to be
performed or satisfied as a condition to the obligations of
the Agent under this Agreement;
(B) no stop order suspending the
effectiveness of either Registration Statement has been
issued and no proceedings for that purpose have been
instituted or, to their knowledge, have been threatened; and
(C) since the date of the most
recent financial statements included in the Prospectus, as
amended and supplemented, there has been no material
16
<PAGE> 17
adverse change in the consolidated financial condition or
results of operations of the Company and its subsidiaries,
taken as a whole, which is not disclosed in the Prospectus, as
amended or supplemented.
(iv) Coopers & Lybrand L.L.P., or another nationally
recognized independent accounting firm, shall have furnished to the
Agent a letter or letters, dated the Commencement Date or the
Settlement Date, as the case may be, in form and substance reasonably
satisfactory to the Agent, to the effect set forth in Exhibit E hereto.
(v) The Company shall have furnished to the Agent
such appropriate further information, certificates and
documents as the Agent may reasonably request.
5. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless the Agent against any losses, claims, damages or liabilities,
joint or several, to which the Agent may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in either Registration Statement
when it became effective, or in the Second Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related Preliminary
Prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and will reimburse the Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Agent specifically
for use in the preparation thereof and (ii) such indemnity with respect to any
preliminary prospectus, the Prospectus or any preliminary supplemental
prospectus, shall not inure to the benefit of the Agent (or any person
controlling the Agent) if the Company shall have delivered sufficient quantities
of the Prospectus, as amended and supplemented, to the Agent within a reasonable
time prior to the earlier of the delivery of the written confirmation of the
sale of such Notes or the delivery of such Notes to the person
17
<PAGE> 18
asserting such loss, claim, damage, liability or action for which
indemnification is sought, and the Prospectus as so amended and supplemented
(excluding documents incorporated by reference) was not sent or given to such
person by the Agent at or prior to the earlier of the delivery of the written
confirmation of the sale of such Notes or the delivery of such Notes to such
person in any case where such sending or giving of a prospectus is required by
the Act, and the untrue statement or omission of a material fact contained in
such preliminary prospectus, such Prospectus or such preliminary supplemental
prospectus, was corrected in the Prospectus, as so amended and supplemented,
provided to the Agent.
(b) The Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any part of either Registration Statement when it became effective,
or in the Second Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related Preliminary Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Agent specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall wish, to assume
18
<PAGE> 19
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnified party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then the indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Agent participating in the offering that
gave rise to such losses, claims, damages or liabilities on the other from the
offering of such Notes, 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 on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Agent on the other in connection with the offering of such Notes shall
be deemed to be in the same proportion as the total net proceeds from the
offering of such Notes by the Agent (before deducting expenses) received by the
Company bear to the total commissions received by the Agent in respect thereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Agent agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party as a
19
<PAGE> 20
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim (which shall be limited as
provided in subsection (c) above if the indemnifying party has assumed the
defense of any such action in accordance with the provisions thereof) which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Agent shall not be required to contribute any amount in
excess of the amount by which the total price at which the Notes were offered
and sold to the public by the Agent exceeds the amount of any damages which the
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
subsection (d) of notice of the commencement of any action against such party in
respect of which a claim for contribution may be made against an indemnifying
party under this subsection (d), such indemnified party shall notify the
indemnifying party in writing of the commencement thereof if the notice
specified in subsection (c) above has not been given with respect to such
action; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under this subsection (d).
(e) The obligations of the Company under this Section 5 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Agent within the meaning of the Act or the Exchange Act; and the obligations
of the Agent under this Section 5 shall be in addition to any liability which
the Agent may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
consent, is named in the Second Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Second Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
6. Termination of the Appointment of the Agent. This Agreement
may be terminated at any time by either party hereto
20
<PAGE> 21
upon the giving of written notice of such termination to the other party hereto.
The termination of this Agreement shall not require termination of any agreement
by the Agent to purchase Notes as principal, and the termination of any such
Agreement shall not require termination of this Agreement. If this Agreement is
terminated, neither party shall have any liability to the other party hereto,
except as provided in the first sentence of the second paragraph of Section
1(a), the last proviso of Section 3(b), and Sections 3(g), 3(h), 5, 7 and 11,
and except that, if at the time of termination an offer to purchase any of the
Notes has been accepted by the Company but the time of delivery to the purchaser
or its agent of the Note or Notes relating thereto has not occurred, the
Company's representations and warranties stated in Section 2 and its obligations
under Sections 1(c), 3(a), 3(b), 3(c), 3(e), 3(i), 3(j), 3(k), 3(l), 3(m) and 4
shall also remain in full force and effect and not be terminated until the
delivery of such Notes.
7. Representations and Indemnities to Survive. With respect to
the Agent's solicitation of offers to purchase Notes as agent of the Company or
the Agent's obligation to purchase Notes as principal pursuant to any Terms
Agreement or otherwise, the respective agreements, representations, warranties,
indemnities and other statements of the Company or its officers and of the Agent
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Agent or the
Company or any of the officers, directors or controlling persons referred to in
Section 5 hereof, and will survive delivery of and payment for the Notes for a
period extending to the earlier of (i) three years from the corresponding
Settlement Date for such Notes or (ii) the expiration of any applicable statute
of limitations governing such solicitation or purchase of Notes.
8. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Agent, will be mailed,
delivered or transmitted to it by any standard form of telecommunications at:
21
<PAGE> 22
Smith Barney Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013
Attention: Mark Meyer
MTN Product Manager
Fax:(212) 723-8853
or, if sent to the Company, will be mailed, delivered or transmitted by any
standard form of telecommunications at:
Smith Barney Holdings Inc.
388 Greenwich Street
New York, N.Y. 10013
Attention: Treasurer
Reference Medium-Term Note Program
Fax: (212) 816-8130
and
388 Greenwich Street 31st Fl.
New York, New York 10013
Attention: Ms. Marilyn Lecounte, IBD
Reference Center
Fax: (212) 816-0720
Any party to this Agreement may change the address to which notices or
communications to it shall be directed by giving notice in writing to the other
parties hereto.
9. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 5 hereof.
Nothing expressed or implied in this Agreement or any Terms Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Section 5 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Terms Agreement or any provision herein or
therein contained. This Agreement and any Terms Agreement and all conditions and
provisions hereof and thereof except to the extent provided for in Section 4
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons and officers
and directors and their heirs and legal
22
<PAGE> 23
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Notes shall be deemed to be a successor by reason merely of such
purchase. This Agreement and the rights and obligations of the Agent hereunder
may not be assigned without the prior written consent of the Company.
10. Waivers, Etc. Neither any failure nor delay on the part of
any party to exercise any right, remedy, power or privilege under this Agreement
(singly and collectively referred to as a "Right") shall operate as a waiver of
such Right, nor shall any single or partial exercise of any Right preclude any
other or further exercise of any Right, nor shall any waiver of any Right with
respect to any occurrence be construed as a waiver of any Right with respect to
any other occurrence.
11. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
23
<PAGE> 24
If the foregoing is in accordance with the Agent's understanding of
this agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and the Agent's acceptance shall represent a binding
agreement between the Company and the Agent.
Very truly yours,
SMITH BARNEY HOLDINGS INC.
By /s/ Mark I. Kleinman
--------------------------------
Name: Mark I. Kleinman
Title: Executive Vice President
and Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.
SMITH BARNEY INC.
By: /s/ Joseph J. Martinelli
-----------------------------------
Name: Joseph J. Martinelli
Title: Senior Vice President
and Assistant Treasurer
24
<PAGE> 1
Exhibit 4.01
CUSIP NO.
REGISTERED PRINCIPAL AMOUNT:
NO.
FORM OF
SMITH BARNEY HOLDINGS INC.
MEDIUM-TERM NOTE, THIRD SERIES
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
(FIXED RATE)
If this Security is a Global Security (as defined below) the following
is applicable:
THIS SECURITY IS IN GLOBAL FORM (A "GLOBAL SECURITY") WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE
"DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH CERTIFICATE IS
REGISTERED IN THE NAME OF CEDE & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
<PAGE> 2
<TABLE>
<S> <C> <C>
ISSUE PRICE: OPTION TO RECEIVE OPTIONAL RESET DATES:
PAYMENTS IN A SPECIFIED
CURRENCY OTHER THAN
U.S. DOLLARS:
[ ] YES [ ] NO
ORIGINAL ISSUE DATE: RENEWAL TERMS (if any): OPTIONAL EXTENSION OF
MATURITY:
[ ] YES [ ] NO
DATE ON WHICH INTEREST SINKING FUND: LENGTH OF EXTENSION
BEGINS TO ACCRUE PERIOD:
(IF DIFFERENT FROM
ORIGINAL ISSUE DATE):
STATED MATURITY TOTAL AMOUNT OF OID: NUMBER OF EXTENSION
DATE: PERIODS:
INTEREST RATE: YIELD TO MATURITY: FINAL MATURITY DATE:
SPECIFIED CURRENCY (if INITIAL ACCRUAL PERIOD DEPOSITARY:
other than U.S. dollars): OID:
AUTHORIZED DENOMINATIONS OPTION TO ELECT OPTIONAL REDEMPTION:
(if Specified Currency REPAYMENT: [ ] YES [ ] NO
is U.S. dollars): $1,000 and [ ] YES [ ] NO
any integral multiple of $1,000
in excess thereof
(if Specified Currency is other
than U.S. dollars):
INTEREST PAYMENT OPTIONAL REPAYMENT INITIAL REDEMPTION
DATES: DATE(S): DATE:
REGULAR RECORD OPTIONAL REPAYMENT REDEMPTION PRICE:
DATES: PRICE(S): [ ] % OF PRINCIPAL
AMOUNT
[ ] AS SET FORTH BELOW
EXCHANGE RATE AGENT: OPTIONAL INTEREST OTHER PROVISIONS:
(if other than Citibank, N.A.) RATE RESET:
[ ] YES [ ] NO
</TABLE>
2
<PAGE> 3
If applicable as specified above, the Redemption Price shall initially
be % of the principal amount of this Security payable at the Stated Maturity and
shall decline at each anniversary (each such date, a "Redemption Date") of the
Initial Redemption Date by % of such principal amount until the Redemption Price
is 100% of such principal amount; provided that if this Security is a Discount
Security, unless otherwise specified above, the Redemption Price shall be the
Amortized Face Amount, as described below. A "Discount Security" is any Security
that has been issued with more than a de minimis amount of original issue
discount (as determined under United States federal income tax rules applicable
to original issue discount instruments).
"Maturity," when used herein, means the date on which the principal of
this Security or an installment of principal becomes due and payable in full in
accordance with the terms of this Security and of the Indenture (as defined in
Section 1 below), whether at Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
SMITH BARNEY HOLDINGS INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company," 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 Amount specified above on the Stated Maturity specified
above and to pay interest thereon at the Interest Rate, if any, specified above
from the Original Issue Date specified above (or the date on which interest
otherwise begins to accrue (if different from the Original Issue Date)) or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on February 15 and August 15 of each year (unless
other Interest Payment Dates are specified above) (each an "Interest Payment
Date"), commencing on the first Interest Payment Date next succeeding the
Original Issue Date (or the date on which interest otherwise begins to accrue
(if different from the Original Issue Date)) until the principal hereof is paid
or made available for payment. Except as provided in the following paragraph,
the Company will pay interest on each Interest Payment Date specified above,
commencing with the first Interest Payment Date next succeeding the Original
Issue Date (or the date on which interest otherwise begins to accrue (if
different from the Original Issue Date)), and at Maturity; provided that any
payment of principal (and premium, if any) or interest to be made on any
Interest Payment Date or at Maturity on a day that is not a Business Day will be
made on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date or such date of Maturity, as the case may be,
and no additional interest shall accrue as the result of such delayed payment.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York City are authorized or
obligated by law or executive order to close and, if this Security is
denominated in or indexed to a Specified Currency other than U.S. dollars or
ECU, each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on
which banking institutions in the principal financial center of the country
issuing the Specified Currency are authorized or required by law or regulation
to close and a day on which banking institutions in such principal financial
center are carrying out transactions in such Specified Currency and, if this
Security is denominated in or indexed to ECU, each day which is not a day that
banking institutions in Luxembourg are authorized or required by law or
regulation to close and which is an ECU clearing day, as determined by the ECU
Banking Association in Paris.
Unless otherwise specified above, the interest so payable on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the regular record dates set forth above
(whether or not a Business Day) (a "Regular Record Date"); provided that
interest payable at Maturity shall be payable to the Person to whom principal
shall be payable; and provided, further, that in the case of a Security issued
between a Regular Record Date and the Interest Payment Date relating to such
Regular Record Date,
3
<PAGE> 4
interest for the period beginning on the Original Issue Date or the date on
which interest otherwise begins to accrue (if different from the Original Issue
Date) and ending on such Interest Payment Date shall be paid on the Interest
Payment Date following the next succeeding Regular Record Date to the registered
Holder on such next succeeding Regular Record Date.
Unless otherwise specified above, all payments in respect of this
Security will be made in U.S. dollars even if this Security is denominated in a
Specified Currency other than U.S. dollars, as specified above, unless the
Holder hereof makes the election described below. If this Security is
denominated in a Specified Currency other than U.S. dollars, unless otherwise
provided above, the Exchange Rate Agent of the Company will determine the amount
of U.S. dollar payments in respect of this Security in the manner described
below; provided that the Holder hereof may, if so indicated above, elect to
receive all payments in such Specified Currency by delivery of a written
election with signature guarantees to the Company's paying agent in The City of
New York (the "Paying Agent"). Any such election must be received by the Paying
Agent on or prior to the applicable Regular Record Date or at least 15 calendar
days prior to Maturity, as the case may be. Such election shall remain in effect
unless and until changed (where permitted by the Indenture) by written notice to
the Paying Agent, but the Paying Agent must receive written notice of any such
change on or prior to the applicable Regular Record Date or at least 15 calendar
days prior to Maturity, as the case may be. Until the Securities are paid or
payment therefor is provided for, the Company will, at all times, maintain a
Paying Agent in The City of New York capable of performing the duties described
herein to be performed by the Paying Agent and, to the extent permitted by the
Indenture, the Company may be the Paying Agent. The Company has initially
appointed the Trustee as Paying Agent. The Company will notify the Holder hereof
in accordance with the Indenture of any change in the Paying Agent or its
address. All currency exchange costs related to this Security, if any, will be
borne by the Holder of this Security by deductions from payments otherwise due
such Holder hereunder.
Unless otherwise indicated above, and except as provided below, payment
of interest on this Security (other than interest payable at Maturity) will be
made by check (unless otherwise provided above, from an account at a bank
located outside the United States if such check is payable in a currency other
than U.S. dollars) mailed to the Holder hereof at the registered address of such
Holder; provided that, if the Holder hereof is the Holder of U.S. $10,000,000 or
more in aggregate principal amount of Securities of this series of like tenor
and term (or a Holder of the equivalent thereof in a Specified Currency other
than U.S. dollars determined as provided below), such Holder shall be entitled
to receive interest payments in immediately available funds, but only if
complete and appropriate instructions have been received in writing by the
Paying Agent on or prior to the applicable Regular Record Date. Simultaneously
with any election by the Holder hereof to receive payments in respect hereof in
the Specified Currency (if other than U.S. dollars), such Holder may, if so
entitled, elect to receive such payments in immediately available funds by
providing complete and appropriate instructions to the Paying Agent, and all
such payments will be made in immediately available funds to an account
maintained by the payee with a bank located outside the United States or as
otherwise provided above. Unless otherwise specified above and except as
provided below, the principal hereof (and premium, if any) and interest, if any,
hereon payable at Maturity will be paid to the Holder in immediately available
funds (unless otherwise provided above, payable to an account maintained by the
payee with a bank located outside the United States if payable in a Specified
Currency other than U.S. dollars) upon surrender of this Security at the
corporate trust office or agency of the Paying Agent maintained for that purpose
in the Borough of Manhattan, The City of New York (or at such other location as
may be specified above), provided that this Security is presented to the Paying
Agent in time for the Paying Agent to make such payments in such funds in
accordance with its normal procedures. The
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<PAGE> 5
Company will pay any administrative costs imposed by banks in making payments in
immediately available funds, but any tax, assessment or governmental charge
imposed upon payments hereunder, including, without limitation, any withholding
tax, will be borne by the Holder hereof.
Unless otherwise specified above, if this Security is registered in the
name of the Depositary or its nominee, (i) payments of interest (other than at
Maturity), will be made in same-day funds in accordance with arrangements
between the Trustee and the Depositary and (ii) any principal, premium, if any,
and interest due at Maturity will be paid by the Trustee by wire transfer in
immediately available funds to an account specified by the Depositary.
Unless otherwise specified above, interest on this Security, if any,
will be computed on the basis of a 360-day year of twelve 30-day months.
Each payment of interest hereon shall include interest accrued through
the day before the Interest Payment Date or date of Maturity, as the case may
be.
References herein to "U.S. dollars" or "U.S.$" or "$" are to the coin
or currency of the United States as at the time of payment is legal tender for
the payment of public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH BELOW, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to below by manual signature, this Security shall not be
entitled to any benefit under the Indenture referred to below or be valid or
obligatory for any purpose.
5
<PAGE> 6
IN WITNESS WHEREOF, Smith Barney Holdings Inc. has caused this
instrument to be duly executed under its corporate seal.
Dated:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
CITIBANK, N.A., SMITH BARNEY HOLDINGS INC.
as Trustee
By:________________________________ By:________________________________
Authorized Signatory
Attest:_____________________________
Secretary
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<PAGE> 7
SMITH BARNEY HOLDINGS INC.
MEDIUM-TERM NOTE, THIRD SERIES
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
(FIXED RATE)
1. General. This Security is one of a duly authorized issue of Securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of May 15, 1993, as supplemented by the
First Supplemental Indenture, dated as of September 1, 1993 and the Second
Supplemental Indenture dated as of December 12, 1996 (herein called the
"Indenture"), between the Company and Citibank, N.A. (herein called the
"Trustee," which term includes any successor trustee under the Indenture) to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated
above, which series constitute one series of Securities, limited in aggregate
principal amount to $500,000,000.
2. Currency Exchanges and Payments. Unless otherwise provided above, if the
Specified Currency set forth above is other than U.S. dollars, the amount of any
U.S. dollar payment to be made in respect hereof will be determined by the
Exchange Rate Agent specified above or a successor thereto (the "Exchange Rate
Agent"), based on the indicative quotation in The City of New York selected by
such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the
second Business Day preceding the applicable payment date, that yields the
largest number of U.S. dollars upon conversion of the Specified Currency. Unless
otherwise provided above, such selection shall be made from among the quotations
of at least three banks agreed to by the Company and the Exchange Rate Agent
appearing on the bank composite or multi-contributor pages of the Reuters
Monitor Foreign Exchange Service, or if not available, the Telerate Monitor
Foreign Exchange Service. If such quotations are unavailable from either such
foreign exchange service, such selection shall be made as specified above. If
payment is to be made in the Specified Currency and the Specified Currency is
unavailable due to the imposition of exchange controls or to other circumstances
beyond the Company's control, or is no longer used by the government of the
country issuing such Specified Currency or for the settlement of transactions by
public institutions of or within the international banking community, the
Company will be entitled to make payments in U.S. dollars on the basis of the
noon buying rate in The City of New York for cable transfers in the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") for such Specified Currency on the second
Business Day prior to the applicable payment date, or on such other basis
specified above. In the event such Market Exchange Rate is not then available,
the Company will be entitled to make payments in U.S. dollars (i) if such
Specified Currency is not a composite currency, on the basis of the most
recently available Market Exchange Rate for such Specified Currency or (ii) if
such Specified Currency is a composite currency, including, without limitation,
ECU, in an amount determined by the Exchange Rate Agent to be the sum of the
results obtained by multiplying the number of units of each component currency
of such composite currency, as of the most recent date on which such composite
currency was used, by the Market Exchange Rate for such component currency on
the second Business Day prior to such payment date (or if such Market Exchange
Rate is not then available, by the most recently available Market Exchange Rate
for such component currency or as otherwise provided above).
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<PAGE> 8
Unless otherwise specified above, if this Security is denominated in a
Specified Currency other than U.S. dollars or ECU and the Holder hereof shall
have elected to receive payments of principal (and premium, if any) and
interest, if any, on this Security in such Specified Currency as described
above, and such Specified Currency is unavailable as of the due date for any
such payment because of the imposition of exchange controls or other
circumstances beyond the Company's control, or is no longer used by the
government of the country issuing such Specified Currency or for the settlement
of transactions by public institutions of or within the international banking
community, then all payments due on such due date with respect to this Security
shall be made in U.S. dollars. Unless otherwise specified above, the amount so
payable on any date in such Specified Currency shall be converted into U.S.
dollars at a rate determined by the Exchange Rate Agent on the basis of the most
recently available Market Exchange Rate.
Unless otherwise specified above, if this Security is denominated in ECU
and the Holder hereof shall have elected to receive payments of principal (and
premium, if any) and interest, if any, on this Security in ECU as described
above, and ECU are unavailable as of the due date for any such payments because
of the imposition of exchange controls or other circumstances beyond the
Company's control, or are no longer used in the European Monetary System, all
payments due on that due date with respect to this Security shall be made in
U.S. dollars. The amount so payable on any date in ECU shall be converted into
U.S. dollars at a rate determined by the Exchange Rate Agent as of the second
Business Day prior to the date on which such payment is due on the following
basis: The component currencies of ECU for this purpose shall be the currency
amounts that were components of ECU as of the last date on which ECU were used
in the European Monetary System. The equivalent of ECU in U.S. dollars shall be
calculated by aggregating the U.S. dollar equivalents of such component
currencies. The U.S. dollar equivalent of each of such component currencies
shall be determined by the Exchange Rate Agent on the basis of the most recently
available Market Exchange Rate or as otherwise specified above.
If the official unit of any component currency of a composite currency
is altered by way of combination or subdivision, the number of units of that
currency as a component shall be divided or multiplied in the same proportion.
If two or more component currencies are consolidated into a single currency, the
amounts of those currencies as components shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a component
shall be replaced by amounts of such two or more currencies having an aggregate
value on the date of division equal to the amount of the former component
currency immediately before such division.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and, in the absence of manifest error, shall be
conclusive for all purposes and binding on the Holder hereof, and the Exchange
Rate Agent shall have no liability therefor.
In the event of an official redenomination of the Specified Currency
(including, without limitation, such an official redenomination if the Specified
Currency is a composite currency), the obligations of the Company with respect
to payments on this Security shall, in all cases, be deemed immediately
following such redenomination to provide for payment of that amount of
redenominated currency representing the amount of such obligations immediately
before such redenomination. Unless otherwise specified herein or set forth
above, in no event shall any adjustment be made to any amount payable hereunder
as a result of (i) any change in the value of the Specified Currency relative to
any other currency due solely to fluctuations in exchange rates or (ii) any
redenomination of any component currency of any composite currency (unless such
composite currency itself is officially redenominated).
8
<PAGE> 9
3. Redemption. If so specified above, the Company may at its option redeem this
Security in whole, or from time to time in part, on or after the date designated
as the Initial Redemption Date above at either a price based on a constant
percentage of the Principal Amount of this Security as specified above or at
prices declining from the premium specified above, if any, to par together, in
each case, with accrued interest to the Redemption Date. The Company may
exercise such option by giving to the Holder hereof a notice of such redemption
at least 30 but not more than 60 days prior to the Redemption Date. In the event
of redemption of this Security in part only, a new Security or Securities of
this series for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof in accordance with the terms of the
Indenture. Unless otherwise specified above, if less than all of the Securities
with like tenor and terms to this Security are to be redeemed, the Securities to
be redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate.
4. Optional Repayment. If so specified above, this Security will be repayable
prior to Stated Maturity at the option of the Holder on the Optional Repayment
Dates specified above at the Optional Repayment Prices specified above together
with accrued interest to the Optional Repayment Date. Unless otherwise specified
above, in order for this Security to be so repaid, the Company must receive, at
least 30 but not more than 45 days prior to an Optional Repayment Date, this
Security with the form below entitled "Option to Elect Repayment" duly
completed. Exercise of this repayment option shall be irrevocable, except as
otherwise provided under Sections 5 and 6 below. The repayment option may be
exercised by the Holder of this Security for less than the aggregate principal
amount of the Security then outstanding provided that the principal amount of
the Security remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment this Security shall be cancelled and a
new Security or Securities for the remaining principal amount hereof shall be
issued in the name of the Holder of this Security.
5. Optional Interest Reset. If so specified above, the interest rate on this
Security may be reset at the option of the Company, in the manner set forth
below (unless otherwise specified above), on the date or dates specified above
(each an "Optional Reset Date"). The Company may exercise such option by
notifying the Trustee of such exercise at least 45 but not more than 60 days
prior to an Optional Reset Date. Not later than 40 days prior to such Optional
Reset Date, the Trustee will give to the Holder of this Security a notice (the
"Reset Notice") setting forth (i) the election of the Company to reset the
interest rate, (ii) such new interest rate and (iii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next Optional
Reset Date or, if there is no such next Optional Reset Date, to the Stated
Maturity of this Security (each such period a "Subsequent Interest Period"),
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during such Subsequent
Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the
Holder of this Security, such new interest rate shall take effect automatically,
and, except as modified by the Reset Notice and as described in the next
paragraph, this Security will have the same terms as prior to the transmittal of
such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
provided for in the Reset Notice and establish an interest rate that is higher
than the interest rate provided for in the Reset Notice for the Subsequent
Interest Period commencing on such Optional Reset Date by causing the Trustee to
transmit notice of such higher interest rate to the Holder of this Security.
Such notice shall be irrevocable. All Securities with respect to which the
interest rate is reset on an Optional Reset Date and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the succeeding paragraph will
bear such higher interest rate for the Subsequent Period.
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<PAGE> 10
If the Company elects to reset the interest rate of this Security, the
Holder of this Security will have the option to elect repayment by the Company
of this Security on any Optional Reset Date at a price equal to the aggregate
principal amount hereof outstanding on, plus any interest accrued to, such
Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the
Holder must follow the procedures set forth above in Section 4 for optional
repayment except that the period for delivery or notification to the Trustee
shall be at least 25 but not more than 35 days prior to such Optional Reset Date
and except that, if the Holder has tendered this Security for repayment pursuant
to the Reset Notice, the Holder may, by written notice to the Trustee, revoke
such tender for repayment until the close of business on the tenth day prior to
such Optional Reset Date.
6. Optional Extension of Maturity. If so specified above, the Stated Maturity of
this Security may be extended at the option of the Company, in the manner set
forth below (unless otherwise provided on the face hereof), for the period or
periods specified above (each an "Extension Period") up to but not beyond the
date (the "Final Maturity Date") set forth above. The Company may exercise such
option by notifying the Trustee of such exercise at least 50 but no more than 60
days prior to the Stated Maturity in effect prior to such exercise (the
"Original Stated Maturity"). If the Company exercises such option, the Trustee
will give to the Holder of this Security no later than 40 days prior to the
Original Stated Maturity a notice (the "Extension Notice") relating to such
Extension Period, setting forth (i) the election of the Company to extend the
Original Stated Maturity, (ii) the new Stated Maturity (which shall then be
considered the Stated Maturity for all purposes of this Security), (iii) the
interest rate applicable to the Extension Period and (iv) the provisions, if
any, for redemption during such Extension Period. Upon the Trustee's transmittal
of the Extension Notice, the Original Stated Maturity of this Security shall be
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, this Security will have the same terms as prior
to the transmittal of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Stated Maturity of this Security the Company may, at its option, revoke
the interest rate provided for in the Extension Notice and establish an interest
rate that is higher than the interest rate provided for in the Extension Notice
for the Extension Period by causing the Trustee to transmit notice of such
higher interest rate to the Holder of this Security. Such notice shall be
irrevocable. All Securities with respect to which the Stated Maturity is
extended and with respect to which the Holders of such Securities have not
tendered such Securities for repayment (or have validly revoked any such tender)
pursuant to the succeeding paragraph will bear such higher interest rate for the
Extension Period.
If the Company elects to extend the Stated Maturity of this Security,
the Holder hereof will have the option to elect repayment of this Security by
the Company on the Original Stated Maturity at a price equal to the aggregate
principal amount hereof outstanding plus interest accrued to such date. In order
to obtain such repayment, the Holder hereof must follow the procedures set forth
above in Section 4 for optional repayment, except that the period for delivery
of this Security or notification to the Trustee shall be at least 25 but not
more than 35 days prior to the Original Stated Maturity and except that, if the
Holder hereof has tendered this Security for repayment pursuant to an Extension
Notice, such Holder may, by written notice to the Trustee, revoke such tender
for repayment until the close of business on the tenth day prior to the Original
Stated Maturity.
7. Optional Renewal. If so specified above, this Security may be renewed by the
Holder of the Security on an Interest Payment Date (specified above) occurring
in or prior to the twelfth month following the Original Issue Date (the "Initial
Maturity Date") in accordance with the procedures described below.
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<PAGE> 11
On the Interest Payment Date occurring in the sixth month (unless a
different interval (the "Special Election Interval") is specified above) prior
to the Initial Maturity Date (as specified above) of a Renewable Note (the
"Initial Renewal Date") and on the Interest Payment Date occurring in each sixth
month (or in the last month of each Special Election Interval) after such
Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal
Date"), the term of this Security may be extended to the Interest Payment Date
occurring in the twelfth month (or, if a special Election Interval is specified
the last month in a period equal to twice the Special Election Interval) after
such Renewal Date, if the Holder of this Security elects to extend the term of
this Security or any portion hereof as provided below. If the Holder of this
Security does not elect to extend the term of any portion of the principal
amount of this Security during the specified period prior to any Renewal Date,
such portion will become due and payable on the Interest Payment Date occurring
in the sixth month (or the last month in the Special Election Interval) after
such Renewal Date (the "New Maturity Date").
A Holder of this Security may elect to renew the term of this Security,
or if specified above, any portion thereof, by delivering a notice to such
effect to the Paying Agent not less than 15 nor more than 30 days prior to such
Renewal Date (unless another period is specified above as the "Special Election
Period"). Such election will be irrevocable and will be binding upon each
subsequent Holder of this Security. An election to renew the term of this
Security may be exercised with respect to less than the entire principal amount
of this Security only if so specified above and only in such principal amount,
or any integral multiple in excess thereof, as specified above. Notwithstanding
the foregoing, the term of this Security may not be extended beyond the maturity
specified above.
If the Holder of this Security does not elect to renew the term of this
Security, this Security must be presented to the Trustee (or any duly appointed
paying agent) and, if this Security is issued in definitive form, as soon as
practicable following receipt of this Security the Trustee (or any duly
appointed paying agent) shall issue in exchange herefor in the name of the
Holder (i) a Security, in a principal amount equal to the principal amount of
this Security for which no election to renew the term thereof was exercised,
with terms identical to those specified on this Security (except that such
Security shall have a fixed, nonrenewable maturity on the New Maturity Date) and
(ii) if an election to renew is made with respect to less than the full
principal amount of this Security, a replacement Security, in a principal amount
equal to the principal amount of such exchanged Security for which the election
to renew was made, with terms identical to such exchanged Security.
8. Sinking Fund. Unless otherwise specified above, this Security will not be
subject to any sinking fund.
9. Discount Securities. If this Security is a Discount Security, unless
otherwise specified above the amount payable in the event of redemption by the
Company, repayment at the option of the Holder or acceleration of maturity, in
lieu of the principal amount due at the Stated Maturity hereof, shall be the
Amortized Face Amount of this Security as of the date of such redemption,
repayment or acceleration. For the purpose of determining whether Holders of the
requisite amount of Securities outstanding under the Indenture have made a
demand or given a notice or waiver or taken any other action, the outstanding
principal amount will be deemed to be the Amortized Face Amount. The "Amortized
Face Amount" of this Security shall be the amount equal to (a) the Issue Price
(as set forth above) plus (b) that portion of the difference between the Issue
Price and the principal amount hereof that has accrued at the Yield to Maturity
(as set forth above) (computed in accordance with generally accepted United
States bond yield computation principles) at the date as of which the Amortized
Face Amount is calculated, but in no event shall the Amortized Face Amount of
this Security exceed its stated principal amount.
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<PAGE> 12
10. Modification and Waivers. The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of Securities of each series at the time
outstanding, on behalf of the Holders of all Securities of such series, to waive
certain existing defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
11. Obligations Unconditional. No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest, if any, on this Security at the
times, place and rate, and in the coin or currency, herein prescribed.
12. Defeasance. The Indenture contains provisions for defeasance and covenant
defeasance at any time of the indebtedness on this Security upon compliance by
the Company with certain conditions set forth therein, which provisions apply to
this Security.
13. Authorized Denominations. The Securities of this series are issuable only in
global or certificated registered form, without coupons. Unless otherwise set
forth above, Securities denominated in U.S. dollars will be issued in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. Securities denominated in a specified currency other than U.S. dollars
will be issued in the denomination or denominations set forth above. As provided
in the Indenture and subject to certain limitations therein set forth and to the
limitations described below, if applicable, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
14. Registration of Transfer. As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Security is
registrable in the Register, upon surrender of this Security for registration of
transfer, at the office or agency of the Company in any place where the
principal of, premium, if any, and interest, if any, on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to those of the Company, the Trustee and the Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Securities in certificated form in exchange for
each Global Security. In addition, the Company may at any time determine not to
have Securities represented by a Global Security, and, in such event, will issue
Securities in certificated form in exchange for the Global Security representing
such Security. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in certificated form of
Securities equal in principal amount to such beneficial interest and to have
such
12
<PAGE> 13
Securities registered in its name. Unless otherwise set forth above, Securities
so issued in certificated form will be issued in denominations of U.S. $1,000
(or such other denomination as shall be specified by the Company) or any amount
in excess thereof which is an integral multiple of U.S. $1,000 and will be
issued in registered form only, without coupons.
13
<PAGE> 14
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the person in whose name this Security is registered as the owner hereof for all
purposes.
15. Events of Default. If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. In the event that the principal of the Securities of
this series is so declared to be due and payable, if this Security is a Discount
Security, unless otherwise specified above, the amount of principal of this
Security that becomes due and payable upon such declaration shall be equal to
the Amortized Face Amount as defined in Section 9 hereof. Upon payment (i) of
the aggregate applicable amounts of principal of the Securities of this series
so declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.
16. Defined Terms. All terms used in this Security which are defined in the
Prospectus Supplement dated July 24, 1997, or in the Indenture and are not
otherwise defined in this Security shall have the meanings assigned to them in
the Indenture.
17. GOVERNING LAW. THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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<PAGE> 15
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -- _________________ Custodian _______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
___________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
/ /
_____________________________________________________________________
Please print or type name and address, including zip code of assignee
________________________________________________________________________________
the within Security of SMITH BARNEY HOLDINGS INC. and all rights thereunder and
does hereby irrevocably constitute and appoint
______________________________________________________________________ Attorney
to transfer the said Security on the books of the within-named Company, with
full power of substitution in the premises.
Dated __________________________
SIGNATURE GUARANTEED: _________________________________________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the face
of the within Security in every particular, without
alteration or enlargement or any change whatsoever.
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<PAGE> 16
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby irrevocably elects to have
the Company repay the principal amount of this Security or portion hereof below
designated at (i) the Optional Repayment Price indicated above, if this Security
is to be repaid pursuant to the Optional Repayment provision hereof or (ii) 100%
of the principal amount of this Security to be repaid plus accrued interest to
the Optional Reset Date, if this Security is to be repaid pursuant to the
Optional Interest Reset provision hereof, or to the Original Stated Maturity, if
this Security is to be repaid pursuant to the Optional Extension of Maturity
provision hereof.
Dated:____________________________ _____________________________________
Signature
Sign exactly as name appears on the
front of this Security [SIGNATURE
GUARANTEED -- required only if
Securities are to be issued and
delivered to other than the registered
Holder]
______________________________________
Principal amount to be repaid, if Fill in for registration of Securities
amount to be repaid is less than the if to be issued otherwise than to the
principal amount of this Security registered Holder:
(principal amount remaining must be
an authorized denomination)
Name: ________________________________
Address: _____________________________
$_________________________________
(Please print name and address
including zip code)
SOCIAL SECURITY OR OTHER TAXPAYER ID
NUMBER
16
<PAGE> 1
EXHIBIT 4.02
CUSIP NO.
REGISTERED PRINCIPAL AMOUNT:
NO.
FORM OF
SMITH BARNEY HOLDINGS INC.
MEDIUM-TERM NOTE, THIRD SERIES,
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
(FLOATING RATE)
If this Security is a Global Security (as defined below) the following
is applicable:
THIS SECURITY IS IN GLOBAL FORM (A "GLOBAL SECURITY") WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE
"DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH CERTIFICATE IS
REGISTERED IN THE NAME OF CEDE & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
<PAGE> 2
<TABLE>
<S> <C> <C>
ISSUE PRICE: MINIMUM INTEREST RATE: OPTION TO ELECT
REPAYMENT:
[ ] YES [ ] NO
ORIGINAL ISSUE DATE: INTEREST RESET PERIOD: OPTIONAL REPAYMENT
DATE(S):
DATE ON WHICH INTEREST INTEREST RESET DATES: OPTIONAL REPAYMENT
BEGINS TO ACCRUE (IF PRICE(S):
DIFFERENT FROM ORIGINAL
ISSUE DATE):
STATED MATURITY: INTEREST PAYMENT OPTIONAL INTEREST
PERIOD: RATE RESET:
[ ] YES [ ] NO
INITIAL INTEREST RATE: INTEREST PAYMENT DATES: OPTIONAL RESET DATES:
BASE RATE: REGULAR RECORD DATES OPTIONAL EXTENSION
(if other than the OF MATURITY:
fifteenth day (whether [ ] YES [ ] NO
or not a Business Day)
preceding each Interest
Payment Date):
INDEX MATURITY: EXCHANGE RATE AGENT: LENGTH OF EXTENSION
(if other than PERIOD:
Citibank, N.A.)
SPREAD (PLUS OR MINUS):
OPTION TO RECEIVE NUMBER OF EXTENSION
PAYMENTS IN SPECIFIED PERIODS:
CURRENCY OTHER THAN
U.S. DOLLARS:
DESIGNATED DEPOSIT [ ] YES [ ] NO
CURRENCY (if other than
U.S. dollars):
SINKING FUND: FINAL MATURITY DATE:
SPREAD MULTIPLIER:
SPECIFIED CURRENCY (if
other than U.S. dollars): TOTAL AMOUNT OF OID: DEPOSITARY:
AUTHORIZED DENOMINATIONS YIELD TO MATURITY: OPTIONAL REDEMPTION:
(if Specified Currency is [ ] YES [ ] NO
U.S. dollars): $1,000 and
any integral multiple of INITIAL ACCRUAL PERIOD OID: INITIAL REDEMPTION DATE:
$1,000 in excess thereof
(if Specified Currency is
other than U.S. dollars):
CALCULATION AGENT: (if REDEMPTION PRICE:
other than Citibank, N.A.) RENEWAL TERMS: [ ] % OF PRINCIPAL AMOUNT
(if any) [ ] AS SET FORTH BELOW
MAXIMUM INTEREST RATE:
INVERSE FLOATING RATE OTHER PROVISIONS:
NOTE: [ ] YES [ ] NO
</TABLE>
2
<PAGE> 3
If applicable as specified above, the Redemption Price shall initially
be % of the principal amount of this Security payable at the Stated Maturity
thereof and shall decline at each anniversary (each such date, a "Redemption
Date") of the Initial Redemption Date by % of such principal amount until the
Redemption Price is 100% of such principal amount; provided that if this
Security is a Discount Security, unless otherwise specified above, the
Redemption Price shall be the Amortized Face Amount, as described below. A
"Discount Security" is any Security that has been issued with more than a de
minimis amount of original issue discount (as determined under United States
federal income tax rules applicable to original issue discount instruments).
"Maturity," when used herein, means the date on which the principal of
this Security or an installment of principal becomes due and payable in full in
accordance with the terms of this Security and of the Indenture (as defined in
Section 1 below), whether at Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
SMITH BARNEY HOLDINGS INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," 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 Amount specified above on the Stated Maturity specified above and to
pay interest thereon at the Initial Interest Rate specified above from the
Original Issue Date specified above (or the date on which interest otherwise
begins to accrue (if different from the Original Issue Date)) or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, until the first Interest Reset Date specified above following the Original
Issue Date (or the date on which interest otherwise begins to accrue (if
different from the Original Issue Date)) and thereafter at the Base Rate
specified above, plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, specified above, determined in accordance with the
provisions below, until the principal hereof is paid or made available for
payment. Except as provided in the following paragraph, the Company will pay
interest on each Interest Payment Date specified above, commencing with the
first Interest Payment Date specified succeeding the Original Issue Date (or the
date on which interest otherwise begins to accrue (if different from the
Original Issue Date)), and at Maturity, provided that unless otherwise set forth
above, if an Interest Payment Date would otherwise be a day that is not a
Business Day, such Interest Payment Date shall be the next succeeding Business
Day, except that, if the Base Rate specified above is LIBID or LIBOR and such
day would fall in the succeeding calendar month, such Interest Payment Date will
be the preceding Business Day (and this exception shall apply in lieu of any
provision of Section 114 of the Indenture to the contrary); and provided further
that any payment of principal (and premium, if any) and interest required to be
made on this Security at Maturity on a day that is not a Business Day will be
made on the next succeeding Business Day (in each case with the same force and
effect as if made on such date of Maturity, and no additional interest shall
accrue as a result of any such delayed payment).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close and, if this Security
is denominated in or indexed to a Specified Currency other than U.S. dollars or
ECU, each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on
3
<PAGE> 4
which banking institutions in the principal financial center of the country
issuing the Specified Currency are authorized or required by law or regulation
to close and a day on which banking institutions in such principal financial
center are carrying out transactions in such Specified Currency and, if this
Security is denominated in or indexed to ECU, each day which is not a day that
banking institutions in Luxembourg are authorized or required by law or
regulation to close and which is an ECU clearing day, as determined by the ECU
Banking Association in Paris.
Unless otherwise specified above, the interest so payable on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the fifteenth day (whether or not a
Business Day) preceding such Interest Payment Date (a "Regular Record Date");
provided that interest payable at Maturity shall be payable to the Person to
whom principal shall be payable; and provided, further, that in the case of a
Security issued between a Regular Record Date and the Interest Payment Date
relating to such Regular Record Date, interest for the period beginning on the
Original Issue Date (or the date on which interest otherwise begins to accrue
(if different from the Original Issue Date)) and ending on such Interest Payment
Date shall be paid on the Interest Payment Date following the next succeeding
Regular Record Date to the registered Holder on such next succeeding Regular
Record Date.
Unless otherwise specified above, all payments in respect of this
Security will be made in U.S. dollars even if this Security is denominated in a
Specified Currency other than U.S. dollars, as specified above, unless the
Holder hereof makes the election described below. If this Security is
denominated in a Specified Currency other than U.S. dollars, unless otherwise
provided above, the Exchange Rate Agent of the Company will determine the amount
of U.S. dollar payments in respect of this Security in the manner described
below; provided that the Holder hereof may, if so indicated above, elect to
receive all payments in such Specified Currency by delivery of a written
election with signature guarantees to the Company's payment agent in The City of
New York (the "Paying Agent"). Any such election must be received by the Paying
Agent on or prior to the applicable Regular Record Date or at least 15 calendar
days prior to Maturity, as the case may be. Such election shall remain in effect
unless and until changed (where permitted by the Indenture) by written notice to
the Paying Agent, but the Paying Agent must receive written notice of any such
change on or prior to the applicable Regular Record Date or at least 15 calendar
days prior to Maturity, as the case may be. Until the Securities are paid or
payment therefor is provided for, the Company will, at all times, maintain a
Paying Agent in The City of New York capable of performing the duties described
herein to be performed by the Paying Agent and, to the extent permitted by the
Indenture, the Company may be the Paying Agent. The Company has initially
appointed the Trustee as Paying Agent. The Company will notify the Holder hereof
in accordance with the Indenture of any change in the Paying Agent or its
address. All currency exchange costs related to this Security, if any, will be
borne by the Holder of this Security by deductions from payments otherwise due
such Holder hereunder.
Unless otherwise indicated above, and except as provided below, payment
of interest on this Security (other than interest payable at Maturity) will be
made by check (unless otherwise provided above, from an account at a bank
located outside the United States if such check is payable in a currency other
than U.S. dollars) mailed to the Holder hereof at the registered address of such
Holder; provided that, if the Holder hereto is the Holder of U.S.$10,000,000 or
more in aggregate principal
4
<PAGE> 5
amount of Securities of like tenor and term (or a Holder of the equivalent
thereof in a Specified Currency other than U.S. dollars determined as provided
below), such Holder shall be entitled to receive interest payments in
immediately available funds, but only if complete and appropriate instructions
have been received in writing by the Paying Agent on or prior to the applicable
Regular Record Date. Simultaneously with any election by the Holder hereof to
receive payments in respect hereof in the Specified Currency (if other than U.S.
dollars), such Holder may, if so entitled, elect to receive such payments in
immediately available funds by providing complete and appropriate instructions
to the Paying Agent, and all such payments will be made in immediately available
funds to an account maintained by the payee with a bank located outside the
United States or as otherwise provided above. Unless otherwise specified above,
and except as provided below, the principal hereof (and premium, if any) and
interest hereon payable at Maturity will be paid to the Holder in immediately
available funds (unless otherwise provided above, payable to an account
maintained by the payee with a bank located outside the United States if payable
in a Specified Currency other than U.S. dollars) upon surrender of this Security
at the corporate trust office or agency of the Paying Agent maintained for that
purpose in the Borough of Manhattan, The City of New York (or at such other
location as may be specified above), provided that this Security is presented to
the Paying Agent in time for the Paying Agent to make such payments in such
funds in accordance with its normal procedures. The Company will pay any
administrative costs imposed by banks in making payments in immediately
available funds, but any tax, assessment or governmental charge imposed upon
payments hereunder, including, without limitation, any withholding tax, will be
borne by the Holder hereof.
Unless otherwise specified above, if this Security is registered in the
name of the Depositary or its nominee, (i) payments of interest (other than at
Maturity) will be made in same-day funds in accordance with arrangements between
the Trustee and the Depositary and (ii) any principal, premium, if any, and
interest due at Maturity will be paid by the Trustee by wire transfer in
immediately available funds to an account specified by the Depositary.
References herein to "U.S. dollars" or "U.S. $" or "$" are to the coin
or currency of the United States as at the time of payment is legal tender for
the payment of public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH BELOW, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to below by manual signature, this Security shall not be
entitled to any benefit under the Indenture referred to below or be valid or
obligatory for any purpose.
5
<PAGE> 6
IN WITNESS WHEREOF, Smith Barney Holdings Inc. has caused this
instrument to be duly executed under its corporate seal.
Dated:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
CITIBANK, N.A., SMITH BARNEY HOLDINGS INC.
as Trustee
By:________________________________ By:______________________________
Authorized Signatory
Attest:__________________________
Secretary
6
<PAGE> 7
SMITH BARNEY HOLDINGS INC.
MEDIUM-TERM NOTE, THIRD SERIES
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
(FLOATING RATE)
1. General. This Security is one of a duly authorized issue of Securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of May 15, 1993, as supplemented by the
First Supplemental Indenture, dated as of September 1, 1993 and the Second
Supplemental Indenture dated as of December 12, 1996 (herein called the
"Indenture"), between the Company and Citibank, N.A. (herein called the
"Trustee," which term includes any successor trustee under the Indenture) to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated
above, which series constitutes one series of Securities, initially limited in
aggregate principal amount to $500,000,000.
2. Currency Exchanges and Payments. Unless otherwise provided above, if the
Specified Currency set forth above is other than U.S. dollars, the amount of any
U.S. dollar payment to be made in respect hereof will be determined by the
Exchange Rate Agent specified above or a successor thereto (the "Exchange Rate
Agent"), based on the indicative quotation in The City of New York selected by
such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the
second Business Day preceding the applicable payment date, that yields the
largest number of U.S. dollars upon conversion of the Specified Currency. Unless
otherwise provided above, such selection shall be made from among the quotations
of at least three banks agreed to by the Company and the Exchange Rate Agent
appearing on the bank composite or multi-contributor pages of the Reuters
Monitor Foreign Exchange Service, or if not available, the Telerate Monitor
Foreign Exchange Service. If such quotations are unavailable from either such
foreign exchange service, such selection shall be made as specified above. If
payment is to be made in a Specified Currency and such Specified Currency is
unavailable due to the imposition of exchange controls or to other circumstances
beyond the Company's control, or is no longer used by the government of the
country issuing such Specified Currency or for the settlement of transactions by
public institutions of or within the international banking community, the
Company will be entitled to make payments in U.S. dollars on the basis of the
noon buying rate in The City of New York for cable transfers in the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") for such Specified Currency on the second
Business Day prior to the applicable payment date, or on such other basis
specified above. In the event such Market Exchange Rate is not then available,
the Company will be entitled to make payments in U.S. dollars (i) if such
Specified Currency is not a composite currency, on the basis of the most
recently available Market Exchange Rate for such Specified Currency or (ii) if
such Specified Currency is a composite currency, including, without limitation,
ECU, in an amount determined by the Exchange Rate Agent to be the sum of the
results obtained by multiplying the number of units of each component currency
of such composite currency, as of the most recent date on which such composite
currency was used, by the Market Exchange Rate for such
7
<PAGE> 8
component currency on the second Business Day prior to such payment date (or if
such Market Exchange Rate is not then available, by the most recently available
Market Exchange Rate for such component currency or as otherwise provided
above).
Unless otherwise specified above, if this Security is denominated in a
Specified Currency other than U.S. dollars or ECU and the Holder hereof shall
have elected to receive payments of principal (and premium, if any) and
interest, if any, on this Security in such Specified Currency as described
above, and such Specified Currency (or if this Security is a Currency Indexed
Note, the Denominated Currency) is unavailable as of the due date for any such
payment because of the imposition of exchange controls or other circumstances
beyond the Company's control, or is no longer used by the government of the
country issuing such Specified Currency or Denominated Currency or for the
settlement of transactions by public institutions of or within the international
banking community, then all payments due on such due date with respect to this
Security shall be made in U.S. dollars. Unless otherwise specified above, the
amount so payable on any date in such Specified Currency or Denominated Currency
shall be converted into U.S. dollars at a rate determined by the Exchange Rate
Agent on the basis of the most recently available Market Exchange Rate.
Unless otherwise specified above, if this Security is denominated in or
indexed to ECU and the Holder hereof shall have elected to receive payments of
principal (and premium, if any) and interest on this Security in ECU as
described above, and ECU are unavailable as of the due date for any such
payments because of the imposition of exchange controls or other circumstances
beyond the Company's control, or are no longer used in the European Monetary
System, all payments due on that due date with respect to this Security shall be
made in U.S. dollars. The amount so payable on any date in ECU shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent as
of the second Business Day prior to the date on which such payment is due on the
following basis: The component currencies of ECU for this purpose shall be the
currency amounts that were components of ECU as of the last date on which ECU
were used in the European Monetary System. The equivalent of ECU in U.S. dollars
shall be calculated by aggregating the U.S. dollar equivalents of such component
currencies. The U.S. dollar equivalent of each of such component currencies
shall be determined by the Exchange Rate Agent on the basis of the most recently
available Market Exchange Rate or as specified above.
If the official unit of any component currency of a composite currency
is altered by way of combination or subdivision, the number of units of that
currency as a component shall be divided or multiplied in the same proportion.
If two or more component currencies are consolidated into a single currency, the
amounts of those currencies as components shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a component
shall be replaced by amounts of such two or more currencies having an aggregate
value on the date of division equal to the amount of the former component
currency immediately before such division.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and, in the absence of manifest error, shall be
conclusive for all purposes and binding on the Holder hereof, and the Exchange
Rate Agent shall have no liability therefor.
8
<PAGE> 9
In the event of an official redenomination of the Specified Currency or
the Denominated Currency (including, without limitation, such an official
redenomination if the Specified Currency or Denominated Currency is a composite
currency), the obligations of the Company with respect to payments on this
Security shall, in all cases, be deemed immediately following such
redenomination to provide for payment of that amount of redenominated currency
representing the amount of such obligations immediately before such
redenomination. Unless otherwise specified herein or set forth above, in no
event shall any adjustment be made to any amount payable hereunder as a result
of (i) any change in the value of the Specified Currency or Denominated Currency
relative to any other currency due solely to fluctuations in exchange rates or
(ii) any redenomination of any component currency of any composite currency
(unless such composite currency itself is officially redenominated).
3. Interest Rate Calculations. As set forth above, this Security may have either
or both of the following: (i) a maximum limitation, or ceiling, on the rate at
which interest may accrue during any interest period ("Maximum Interest Rate");
and/or (ii) a minimum limitation, or floor, on the rate at which interest may
accrue during any interest period ("Minimum Interest Rate"). In addition to any
Maximum Interest Rate that may be set forth above, the interest rate on this
Security will in no event be higher than the maximum rate permitted by
applicable law.
Unless otherwise specified herein or set forth above, all percentages
resulting from any calculation of the rate of interest hereon will be rounded
upward, if necessary, to the nearest one hundred-thousandth of a percent
(.0000001), with five one-millionths of a percentage point rounded upward, and
all currency amounts used in or resulting from such calculation will be rounded
to the nearest one-hundredth of a unit (with five one-thousandths of a unit
being rounded upwards).
The rate of interest hereon will be reset daily, weekly, monthly,
quarterly, semi-annually or annually (the "Interest Reset Period"), as or unless
otherwise set forth above. Unless otherwise set forth above, the date or dates
on which interest will be reset (each an "Interest Reset Date") will be, if this
Security resets daily, each Business Day; if this Security (unless the Base Rate
set forth above is the Treasury Rate) resets weekly, the Wednesday of each week;
if the Base Rate set forth above is the Treasury Rate, and this Security resets
weekly, the Tuesday of each week (except as provided below); if this Security
resets monthly, the third Wednesday of each month (unless the Base Rate set
forth above is the Eleventh District Cost of Funds Rate, in which case interest
will reset on the first calendar day of each month); if this Security resets
quarterly, the third Wednesday of each March, June, September and December; if
this Security resets semi-annually, the third Wednesday of the two months of
each year set forth above; and if this Security resets annually, the third
Wednesday of the month of each year set forth above; provided that (i) the
interest rate in effect from the Original Issue Date (or the date on which
interest otherwise begins to accrue interest (if different from the Original
Issue Date)) to the first Interest Rate Date will be the Initial Interest Rate
as set forth above and (ii) the interest rate in effect for the 10 days
immediately prior to Maturity will be that in effect on the tenth day preceding
such Maturity. If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be the next succeeding Business
Day, except that if the Base Rate set forth above is LIBID or LIBOR, if such
Business Day is in the succeeding calendar month, such Interest Reset Date shall
be the preceding Business Day. If the Base Rate set forth above is the Treasury
Rate, and an auction of direct obligations of the United States Treasury bills
("Treasury
9
<PAGE> 10
bills") falls on a day that is an Interest Reset Date for this Security, such
Interest Reset Date shall be the next succeeding Business Day.
Unless otherwise set forth above, the interest payable hereon on each
Interest Payment Date and at Maturity shall be the amount of interest accrued
from and including the Original Issue Date (or the date on which interest
otherwise begins to accrue (if different from the Original Issue Date)) or from
and including the last Interest Payment Date to which interest has been paid to,
but excluding, such Interest Payment Date or date of Maturity, as the case may
be; provided that if the interest rate of this Security is reset daily or
weekly, interest payable hereon will be the amount of interest accrued from and
including the Original Issue Date (or the date on which interest otherwise
begins to accrue (if different from the Original Issue Date)) or from and
excluding the last date to which interest has been paid, as the case may be, to,
and including, the Regular Record Date immediately preceding such Interest
Payment Date, except that at Maturity the interest payable will include interest
accrued to, but excluding, the date of Maturity.
Unless otherwise set forth above, accrued interest hereon will be
calculated by multiplying the principal amount hereof by an accrued interest
factor. Unless otherwise set forth above, such accrued interest factor will be
computed by adding the interest factors calculated for each day in the interest
period for which accrued interest is being calculated. Unless otherwise set
forth above, the interest factor for each such day is computed by dividing the
interest rate applicable on such day by 360, if the Base Rate set forth above is
the CD Rate, Commercial Paper Rate, LIBID, LIBOR, Federal Funds Rate, Prime
Rate, J.J. Kenny Rate or Eleventh District Cost of Funds Rate, or by the actual
number of days in the year, if the Base Rate set forth above is the Treasury
Rate or the CMT Rate. The interest rate applicable to any day that is an
Interest Reset Date is the interest rate as determined, in accordance with the
procedures hereinafter set forth, with respect to the Interest Determination
Date (as defined below) pertaining to such Interest Reset Date. The interest
rate applicable to any other day is the interest rate for the immediately
preceding Interest Reset Date (or, if none, the Initial Interest Rate, as set
forth above).
Unless otherwise set forth above, interest will be payable, if this
Security resets daily or weekly or monthly (or unless the Base Rate set forth
above is the Eleventh District Cost of Funds Rate), on the third Wednesday of
each month or on the third Wednesday of March, June, September and December of
each year, as set forth above; if this Security resets quarterly, on the third
Wednesday of January, April, July and October of each year, or unless the Base
Rate set forth above is the Eleventh District Cost of Funds Rate, on the first
calendar day of each month or the first calendar day of each March, June,
September and December; if this Security resets semi-annually, on the third
Wednesday of the two months of each year set forth above; and if this Security
resets annually, on the third Wednesday of the month of each year set forth
above, and in each case, at Maturity (each such day being an "Interest Payment
Date"). Unless otherwise set forth above, if an Interest Payment Date (other
than at Maturity) would otherwise be a day that is not a Business Day, such
Interest Payment Date shall be the next succeeding Business Day, except that, if
the Base Rate set forth above is LIBID or LIBOR and such day would fall in the
succeeding calendar month, such Interest Payment Date will be the preceding
Business Day (and this exception shall apply in lieu of any provision of Section
114 of the Indenture to the contrary). Any payment of principal (and premium, if
any) and interest required to be made on this Security on a date of Maturity
that is not a Business Day, will be made on the next
10
<PAGE> 11
succeeding Business Day except that, if the Base Rate set forth above is LIBID
or LIBOR and such day would fall in the succeeding calendar month, such payment
will be made on the preceding Business Day (and this exception shall apply in
lieu of any provision of Section 114 of the Indenture to the contrary) (in each
case with the same force and effect as if made on such date of Maturity, and no
additional interest shall accrue as a result of any such delayed payment).
If the Base Rate set forth above is the CD Rate, the Commercial Paper
Rate, the Federal Funds Rate, the Prime Rate, the J.J. Kenny Rate or the CMT
Rate, the interest determination date pertaining to an Interest Reset Date for
this Security (the "Interest Determination Date"), unless otherwise set forth
above, will be the second Business Day preceding such Interest Reset Date. If
the Base Rate set forth above is LIBID or LIBOR, the Interest Determination Date
pertaining to an Interest Reset Date for this Security, unless otherwise set
forth above, will be the second London Business Day (as defined below) preceding
such Interest Reset Date. If the Base Rate set forth above is the Treasury Rate,
the Interest Determination Date pertaining to an Interest Reset Date for this
Security, unless otherwise set forth above, will be the day of the week in which
such Interest Reset Date falls on which Treasury bills of the Index Maturity set
forth above are auctioned. Treasury bills are normally sold at auction on Monday
of each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be held on
the preceding Friday. If, as the result of a legal holiday, an auction is so
held on the preceding Friday, such Friday will be the Interest Determination
Date pertaining to the Interest Reset Date occurring in the succeeding week. If
the Base Rate set forth above is the Eleventh District Cost of Funds Rate, the
Interest Determination Date pertaining to an Interest Reset Date for this
Security, unless otherwise set forth above, will be the last working day of the
month immediately preceding such Interest Reset Date on which the Federal Home
Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the monthly
Eleventh District Cost of Funds Index (as defined below).
Unless otherwise set forth above, the "Calculation Date," where
applicable, pertaining to an Interest Determination Date will be the earlier of
(i) the tenth calendar day after such Interest Determination Date, or, if any
such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day preceding the applicable Interest Payment Date or date of Maturity,
as the case may be.
The Company will appoint, and enter into an agreement with, an agent (a
"Calculation Agent") to calculate the rate of interest of the Securities of this
series which bear interest at a floating rate. Unless otherwise set forth above,
Citibank, N.A. will be the Calculation Agent. Upon the request of the Holder
hereof, the Calculation Agent will advise such Holder of the interest rate then
in effect and, if determined, the interest rate that will become effective on
the next Interest Reset Date. All determinations to be made by the Calculation
Agent shall be at its sole discretion and, in the absence of manifest error,
shall be conclusive for all purposes and binding on holders of the Notes, and
the Calculation Agent shall have no liability therefor.
Subject to applicable provisions of law and except as specified herein,
with respect to each Interest Determination Date, the rate of interest shall be
the rate determined by the Calculation Agent in accordance with the provisions
of the applicable heading below.
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<PAGE> 12
Determination of CD Rate. If the Base Rate set forth above is the CD
Rate, this Security will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread and/or the
Spread Multiplier, if any, set forth above. Unless otherwise set forth above,
the "CD Rate" means, with respect to any Interest Determination Date, the rate
on such date for negotiable certificates of deposit having the Index Maturity
set forth above as made available and subsequently published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)" or, if not so made available by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the CD Rate
will be the rate on such Interest Determination Date for negotiable certificates
of deposit of the Index Maturity set forth above as made available and
subsequently published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 p.m. Quotations for U.S. Government
Securities", or any successor publication of the Federal Reserve Bank of New
York ("Composite Quotations") under the heading "Certificates of Deposit." If by
3:00 p.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date the rate for such Interest Determination Date has
not yet been made available in either H.15(519) or Composite Quotations, then
the CD Rate for such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on such Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks of the highest credit standing (in the market for negotiable certificates
of deposit) having a remaining maturity closest to the Index Maturity set forth
above in a denomination of U.S. $5,000,000; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the rate of interest in effect for the applicable
period will be the rate of interest in effect on such Interest Determination
Date.
Determination of Commercial Paper Rate. If the Base Rate set forth above
is the Commercial Paper Rate, this Security will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the Commercial
Paper Rate and the Spread and/or the Spread Multiplier, if any, set forth above.
Unless otherwise set forth above, the "Commercial Paper Rate" means, with
respect to any Interest Determination Date, the Money Market Yield (calculated
as described below) on such date of the rate for commercial paper having the
Index Maturity set forth above, as made available and subsequently published by
the Board of Governors of the Federal Reserve System in H.15(519) under the
heading "Commercial Paper." If such rate is not so made available prior to 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield on such Interest Determination Date of the rate for commercial paper of
the Index Maturity set forth above as made available and subsequently published
by the Federal Reserve Bank of New York in Composite Quotations under the
heading "Commercial Paper." If by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date the rate for
such Interest Determination Date has not yet been made available in either
H.15(519) or Composite Quotations, then the Commercial Paper Rate for such
Interest Determination Date shall be the Money Market Yield of the arithmetic
mean of the offered rates as of 11:00 a.m., New York City time, on such Interest
Determination Date of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent for commercial paper of
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<PAGE> 13
the Index Maturity set forth above, placed for industrial issuers whose senior
unsecured bond rating is "AA", or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting offered rates as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
rate of interest in effect on such Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360 x 100
-----------
360 (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the period for which interest is being calculated, as set
forth on the face hereof.
Determination of LIBID. If the Base Rate set forth above is LIBID, this
Security will bear interest for each Interest Reset Period at the interest rate
calculated with reference to LIBID and the Spread and/or Spread Multiplier, if
any, set forth above.
Unless otherwise indicated above, LIBID will be determined by the
Calculation Agent in accordance with the following provisions:
(i) With respect to any Interest Determination Date, LIBID will
be, as specified above, either LIBID Reuters (as defined below) or LIBID
Telerate (as defined below), subject to the last sentence of this
paragraph. "LIBID Reuters" means the arithmetic mean of the bid rates
for deposits in the Designated Deposit Currency (as defined below)
having the Index Maturity set forth above, commencing on the second day
on which dealings in deposits in the Designated Deposit Currency are
transacted in the London interbank market ("London Business Day")
immediately following such Interest Determination Date, that appear on
the display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on that service
for the purpose of displaying London interbank bid and offered rates of
major banks) (the "Reuters Screen LIBO Page") as of 11:00 A.M., London
time, on such Interest Determination Date, if at least two such bid
rates appear on the Reuters Screen LIBO Page. "LIBID Telerate" means the
rate for deposits in the Designated Deposit Currency having the Index
Maturity set forth above, commencing on the second London Business Day
immediately following such Interest Determination Date, that appears on
the display designated as page "3750" on the Telerate Service (or such
other page as may replace the 3750 page on that service or such other
service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank bid and
offered rates for deposits in the Designated Deposit Currency) (the
"Telerate Page 3750") as of 11:00 A.M., London time, on such Interest
Determination Date. If neither LIBID Reuters nor LIBID Telerate is
specified in the applicable Pricing Supplement, LIBID will be determined
as if LIBID Telerate had been specified. If fewer than two bid rates
appear on the Reuters Screen LIBO Page, or if no rate
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<PAGE> 14
appears on the Telerate Page 3750, as applicable, LIBID in respect of
such Interest Determination Date will be determined as if the parties
had specified the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two bid rates appear on the Reuters Screen LIBO Page, or on
which no rate appears on Telerate Page 3750, as applicable, LIBID will
be determined on the basis of the bid rates at which deposits in the
Designated Deposit Currency, having the Index Maturity set forth above,
are quoted at approximately 11:00 A.M., London time, on such Interest
Determination Date to prime banks in the London interbank market by four
major banks in the London interbank market selected by the Calculation
Agent (the "LIBID Reference Banks") commencing on the second London
Business Day immediately following such Interest Determination Date and
in a principal amount equal to an amount of not less than U.S.
$1,000,000 (or the equivalent in the Designated Deposit Currency) that
is representative for a single transaction in such market at such time.
The Calculation Agent will request the principal London office of each
of such LIBID Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBID in respect of such
Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBID in respect
of such Interest Determination Date will be the arithmetic mean of the
rates quoted in the applicable Principal Financial Center (as defined
below) on such Interest Determination Date by three major banks in such
Principal Financial Center selected by the Calculation Agent for loans
in the Designated Deposit Currency to leading banks, having the Index
Maturity specified above, commencing on the second London Business Day
immediately following such Interest Determination Date and in a
principal amount equal to an amount of not less than U.S. $1,000,000 (or
the equivalent in the Designated Deposit Currency) that is
representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBID
will be LIBID in effect on such Interest Determination Date.
Determination of LIBOR. If the Base Rate set forth above is LIBOR, this
Security will bear interest for each Interest Reset Period at the interest rate
calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any, set forth above. Unless otherwise indicated above, LIBOR will be determined
by the Calculation Agent in accordance with the following provisions:
(i) With respect to any Interest Determination Date, LIBOR will
be, as specified above, either LIBOR Reuters (as defined below) or LIBOR
Telerate (as defined below), subject to the last sentence of this
paragraph. "LIBOR Reuters" means the arithmetic mean of the offered
rates for deposits in the Designated Deposit Currency having the Index
Maturity set forth above, commencing on the second London Business Day
immediately following such Interest Determination Date, that appear on
the Reuters Screen LIBO Page as of 11:00 A.M., London time, on such
Interest Determination Date, if at least two such offered rates appear
on the Reuters Screen LIBO Page. "LIBOR Telerate" means the rate for
deposits in the Designated Deposit Currency having the Index Maturity
set forth above, commencing on the second London Business Day
immediately following such Interest Determination Date, that appears on
Telerate Page 3750 as of 11:00 A.M., London time, on such Interest
Determination Date. If neither LIBOR Reuters nor LIBOR Telerate is set
forth above, LIBOR will be determined as if LIBOR Telerate had been
specified. If fewer than two offered rates appear on the Reuters Screen
LIBO Page, or if no rate appears on
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<PAGE> 15
the Telerate Page 3750, as applicable, LIBOR in respect of such Interest
Determination Date will be determined as if the parties had specified
the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two offered rates appear on the Reuters Screen LIBO Page or
on which no rate appears on Telerate Page 3750 as applicable, LIBOR will
be determined on the basis of the rates at which deposits in the
Designated Deposit Currency having the Index Maturity set forth above
are offered at approximately 11:00 a.m., London time, on such Interest
Determination Date by four major banks in the London interbank market
selected by the Calculation Agent (the "LIBOR Reference Banks") to prime
banks in the London interbank market, commencing on the second London
Business Day immediately following such Interest Determination Date and
in a principal amount equal to an amount of not less than U.S.
$1,000,000 (or the equivalent in the Designated Deposit Currency) that
is representative for a single transaction in such market at such time.
The Calculation Agent will request the principal London office of each
of such LIBOR Reference Banks to provide a quotation of its rates. If at
least two such quotations are provided, LIBOR for such Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR for such Interest
Determination Date will be the arithmetic mean of the rates quoted in
the applicable Principal Financial Center, on such Interest
Determination Date by three major banks in such Principal Financial
Center selected by the Calculation Agent for loans in the Designated
Deposit Currency to leading banks, having the Index Maturity specified
above, commencing on the second London Business Day immediately
following such Interest Determination Date and in a principal amount
equal to an amount of not less than U.S. $1,000,000 (for the equivalent
in the Designated Deposit Currency) that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR will be LIBOR in effect on such
Interest Determination Date.
"Designated Deposit Currency" means the currency (including a composite
currency), if any, set forth above as the Designated Deposit Currency. If no
such currency is set forth above, the Designated Deposit Currency shall be U.S.
dollars. "Principal Financial Center" means, unless otherwise specified above,
the capital city of the country that issues as its legal tender the Designated
Deposit Currency, except that with respect to U.S. dollars, Deutsche marks and
ECUs, the Principal Financial Center shall be the City of New York, Frankfurt
and Luxembourg, respectively.
Determination of Treasury Rate. If the Base Rate set forth above is the
Treasury Rate, this Security will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Treasury Rate and the
Spread and/or the Spread Multiplier, if any, set forth above. Unless otherwise
set forth above, the "Treasury Rate" means, with respect to any Interest
Determination Date, the rate for the most recent auction of Treasury bills
having the Index Maturity set forth above as made available and subsequently
published by the Board of Governors of the Federal Reserve System in H.15(519)
under the heading "U.S. Government Securities - Treasury bills - auction average
(investment)" or, if not so made available by 3:00 p.m., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the auction
average rate (expressed as a bond equivalent, rounded to the nearest
one-hundredth of a percent, with five one-thousandths of a percent rounded
upward, on the basis of a year of 365 or 366 days, as applicable, and applied on
a daily basis) for such auction or as otherwise announced
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<PAGE> 16
by the United States Department of the Treasury. In the event that the results
of the auction of Treasury bills having the Index Maturity set forth above are
not made available or published or reported as provided above by 3:00 p.m., New
York City time, on such Calculation Date or if no such auction is held in a
particular week, then the Treasury Rate shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent, rounded
to the nearest one-hundredth of a percent, with five one-thousandths of a
percent rounded upward, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Interest Determination Date of three leading primary United States
government securities dealers selected by the Calculation Agent for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity set forth
above; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting bid rates as mentioned in this sentence, the
interest rate for the applicable period will be the interest rate in effect on
such Interest Determination Date.
Determination of Federal Funds Rate. If the Base Rate set forth above is
the Federal Funds Rate, this Security will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread and/or the Spread Multiplier, if any, set forth above. Unless
otherwise set forth above, the "Federal Funds Rate" means, with respect to any
Interest Determination Date, the rate on such date for Federal Funds as made
available and subsequently made available by the Board of Governors of the
Federal Reserve System in H.15(519) under the heading "Federal Funds
(Effective)" or, if not so made available by 3:00 p.m., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate will be the rate on such Interest Determination Date as made
available and subsequently published by the Federal Reserve Bank of New York in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is neither made available in H.15(519) nor in Composite Quotations by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Federal Funds Rate for such Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic mean
of the rates as of 9:00 a.m., New York City time, on such Interest Determination
Date for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York selected
by the Calculation Agent; provided, however, that if the brokers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
rate of interest in effect on such Interest Determination Date.
Determination of Prime Rate. If the Base Rate set forth above is the
Prime Rate, this Security will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the Prime Rate and the Spread
and/or the Spread Multiplier, if any, set forth above. Unless otherwise set
forth above, the "Prime Rate" means, with respect to any Interest Determination
Date, the rate on such date as made available and subsequently published by the
Board of Governors of the Federal Reserve System in H.15(519) under the heading
"Bank Prime Loan." If such rate is not so made available by 3:00 p.m., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank named
on the "Reuters Screen NYMF Page" (as defined below) as such bank's prime rate
or base lending rate as in effect for such Interest Determination Date. "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (such term to include such other page as may replace
the NYMF page on that service for the
16
<PAGE> 17
purpose of displaying prime rates or base lending rates of major United States
banks). If fewer than four such rates but more than one such rate appear on the
Reuters Screen NYMF Page for such Interest Determination Date, the Prime Rate
will be calculated by the Calculation Agent and will be the arithmetic mean of
the prime rates quoted on the actual number of days in the year divided by 360
as of the close of business on such Interest Determination Date by four major
money center banks in The City of New York selected by the Calculation Agent. If
fewer than two such rates appear on the Reuters Screen NYMF Page, the Prime Rate
will be calculated by the Calculation Agent and will be the arithmetic mean of
the prime rates quoted on such Interest Determination Date as furnished in The
City of New York by at least three substitute banks or trust companies organized
and doing business under the laws of the United States, or any state thereof, in
each case having total equity capital of at least U.S. $500,000,000 and being
subject to supervision or examination by federal or state authority, selected by
the Calculation Agent to provide such rate or rates; provided, however, that if
the banks or trust companies selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the rate of interest in effect for
the applicable period will be rate of interest in effect on such Interest
Determination Date.
Determination of J.J. Kenny Rate. If the Base Rate set forth above is
the J.J. Kenny Rate, this Security will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the J.J. Kenny Rate and
the Spread and/or Spread Multiplier, if any, set forth above. Unless otherwise
set forth above, the "J.J. Kenny Rate" means, with respect to any Interest
Determination Date, the per annum rate on such date equal to the index made
available and subsequently published by Kenny Information Systems or its
successor, based upon 30-day yield evaluations at par of bonds, the interest on
which is excludable from gross income for federal income tax purposes under the
Internal Revenue Code of 1986, as amended (the "Code"), of not less than five
"high grade" component issuers selected from time to time by Kenny Information
Systems, including without limitation, issuers of general obligation bonds;
provided, however, that the bonds on which the index is based shall not include
any bonds the interest on which is subject to an "alternate minimum tax" or
similar tax under the Code, unless all tax-exempt bonds are subject to such tax.
If such rate is not made available by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such J.J. Kenny Interest Determination Date, the
J.J. Kenny Rate shall be the rate quoted by a successor indexing agent selected
by the Company equalling the prevailing rate for bonds rated in the highest
short-term rating category by Moody's Investors Service, Inc. and Standard &
Poor's Corporation in respect of issuers selected by such successor indexing
agent most closely resembling the "high grade" component issuers selected by
Kenny Information Systems that are subject to tender by the holders thereof for
purchase on not more than seven days notice and the interest on which is (A)
variable on a weekly basis, (B) excludable from gross income for Federal income
tax purposes under the Code, and (C) not subject to an "alternate minimum tax"
or similar tax under the Code, unless all tax-exempt bonds are subject to such
tax; provided, however, that if a successor indexing agent is not available, the
J.J. Kenny Rate with respect to such Interest Determination Date will be the
J.J. Kenny Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the Initial Interest Rate).
Determination of Eleventh District Cost of Funds Rate. If the Base Rate
set forth above is the Eleventh District Cost of Funds Rate, this Security will
bear interest for each Interest Reset Period at the interest rate calculated
with reference to the Eleventh District Cost of Funds Rate and the Spread and/or
Spread Multiplier, if any, set forth above. Unless otherwise set forth above,
the "Eleventh District Cost of Funds Rate" means, with respect to any Interest
Determination Date, the rate equal to the monthly
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<PAGE> 18
weighted average cost of funds for the calendar month preceding such Eleventh
District Cost of Funds Interest Determination Date as set forth under the
caption "Eleventh District" on Telerate Page 7058 as of 11:00 A.M., San
Francisco time, on such Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on any related Interest Determination Date, the
Eleventh District Cost of Funds Rate for such Interest Determination Date shall
be the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as
such cost of funds for the calendar month preceding the date of such
announcement. If the FHLB of San Francisco fails to announce such rate for the
calendar month next preceding such Interest Determination Date, then the rate of
interest in effect for the applicable period will be the rate of interest in
effect on such Interest Determination Date.
Determination of CMT Rate. If the Base Rate set forth above is the CMT
Rate, this Security will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CMT Rate and the Spread and/or
Spread Multipliers, if any, set forth above. Unless otherwise set forth above,
the "CMT Rate" means, with respect to any Interest Determination Date, the CMT
Rate for Treasury bills on such date having the Index Maturity set forth above
as made available and subsequently published in H.15(519) under the heading
"Treasury constant maturities" or, if not so made available by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, as displayed on Telerate Screen Page 7052 under the heading
"Treasury Constant Maturities." If by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date the rate has not
yet been made available in H.15(519) or displayed on Telerate Screen Page 7052,
then the Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent, rounded to the nearest one
hundredth of a percent, with five one thousandths of a percent rounded upward,
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Interest Determination Date
of three leading primary United States government securities dealers selected by
the Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity set forth above; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the interest rate in effect for the applicable
period will be the interest rate in effect on such Interest Determination Date.
Inverse Floating Rate Notes. Any Floating Rate Note may be designated
above as an "Inverse Floating Rate Note," in which event the interest rate on
such Floating Rate Note will be equal to (i) in the case of the period, if any,
commencing on the Original Issue Date (or the date on which interest otherwise
begins to accrue (if different from the Original Issue Date)) up to the first
Interest Reset Date, a fixed rate of interest established by the Company as
described above and (ii) in the case of each period commencing on an Interest
Reset Date, a fixed rate of interest specified above minus the interest rate
determined by reference to the Base Rate as adjusted by the Spread and/or Spread
Multiplier, if any; provided, however, that (x) the interest rate thereon will
not be less than zero and (y) the interest rate in effect for the ten days
immediately prior to the date of Maturity of such Inverse Floating Rate Note
will be that in effect on the tenth day preceding such date.
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5. Redemption. If so specified above, the Company may at its option redeem this
Security in whole or from time to time in part on or after the date designated
as the Initial Redemption Date above at either a price based on a constant
percentage of the Principal Amount of this Security as specified above or at
prices declining from the premium specified above, if any, to par together, in
each case, with accrued interest to the Redemption Date. The Company may
exercise such option by giving to the Holder hereof a notice of such redemption
at least 30 but not more than 60 days prior to the Redemption Date. In the event
of redemption of this Security in part only, a new Security or Securities of
this series for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof in accordance with the terms of the
Indenture. Unless otherwise specified above, if less than all of the Securities
with like tenor and terms to this Security are to be redeemed, the Securities to
be redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate.
6. Optional Repayment. If so specified above, this Security will be repayable
prior to Stated Maturity at the option of the Holder on the Optional Repayment
Dates specified above at the Optional Repayment Prices specified above together
with accrued interest to the Optional Repayment Date. Unless otherwise specified
above, in order for this Security to be so repaid, the Company must receive, at
least 30 but not more than 45 days prior to an Optional Repayment Date this
Security with the form below entitled "Option to Elect Repayment" duly
completed. Exercise of this repayment option shall be irrevocable, except as
otherwise provided under Sections 6 and 7 below. The repayment option may be
exercised by the Holder of this Security for less than the aggregate principal
amount of the Security then outstanding provided that the principal amount of
the Security remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment this Security shall be cancelled and a
new Security or Securities for the remaining principal amount hereof shall be
issued in the name of the Holder of this Security.
7. Optional Interest Reset. If so specified above, the Spread and/or Spread
Multiplier, as the case may be, with respect to this Security may be reset at
the option of the Company, in the manner set forth below (unless otherwise
specified above), on the date or dates specified above (each an "Optional Reset
Date"). The Company may exercise such option by notifying the Trustee of such
exercise at least 45 but not more than 60 days prior to an Optional Reset Date.
Not later than 40 days prior to such Optional Reset Date, the Trustee will give
to the Holder of this Security a notice (the "Reset Notice") setting forth (i)
the election of the Company to reset the Spread or Spread Multiplier, (ii) such
new Spread and/or Spread Multiplier and (iii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next Optional
Reset Date or, if there is no such next Optional Reset Date, to the Stated
Maturity of this Security (each such period a "Subsequent Interest Period"),
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during such Subsequent
Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the
Holder of this Security, such new Spread or Spread Multiplier shall take effect
automatically, and, except as modified by the Reset Notice and as described in
the next paragraph, this Security will have the same terms as prior to the
transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the Spread and/or
Spread Multiplier provided for in the Reset Notice and establish a Spread and/or
Spread Multiplier that is higher than the Spread and/or Spread Multiplier
provided for in the Reset Notice for the Subsequent Interest Period commencing
on such Optional Reset
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<PAGE> 20
Date by causing the Trustee to transmit notice of such higher Spread and/or
Spread Multiplier to the Holder of this Security. Such notice shall be
irrevocable. All Securities with respect to which the Spread and/or Spread
Multiplier is reset on an Optional Reset Date and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the succeeding paragraph will
bear such higher Spread and/or Spread Multiplier for the Subsequent Interest
Period.
If the Company elects to reset the Spread and/or Spread Multiplier of
this Security, the Holder of this Security will have the option to elect
repayment by the Company of this Security on any Optional Reset Date at a price
equal to the aggregate principal amount hereof outstanding on, plus any interest
accrued to, such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Section
5 above for optional repayment except that the period for delivery or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to such Optional Reset Date and except that, if the Holder has tendered this
Security for repayment pursuant to the Reset Notice, the Holder may, by written
notice to the Trustee, revoke such tender for repayment until the close of
business on the tenth day prior to such Optional Reset Date.
8. Optional Extension of Maturity. If so specified above, the Stated Maturity of
this Security may be extended at the option or the Company, in the manner set
forth below (unless otherwise provided on the face hereof), for the period or
periods specified above (each an "Extension Period") up to but not beyond the
date (the "Final Maturity Date") set forth above. The Company may exercise such
option by notifying the Trustee of such exercise at least 50 but no more than 60
days prior to the Stated Maturity in effect prior to such exercise (the
"Original Stated Maturity"). If the Company exercises such option, the Trustee
will give to the Holder of this Security no later than 40 days prior to the
Original Stated Maturity a notice (the "Extension Notice") relating to such
Extension Period, setting forth (i) the election of the Company to extend the
Original Stated Maturity, (ii) the new Stated Maturity (which shall then be
considered the Stated Maturity for all purposes of this Security), (iii) the
Spread or Spread Multiplier applicable to the Extension Period and (iv) the
provisions, if any, for redemption during such Extension Period. Upon the
Trustee's transmittal of the Extension Notice, the Original Stated Maturity of
this Security shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next paragraph, this Security will have
the same terms as prior to the transmittal of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Stated Maturity of this Security the Company may, at its option, revoke
the Spread or Spread Multiplier provided for in the Extension Notice and
establish a Spread or Spread Multiplier that is higher than the Spread or Spread
Multiplier provided for in the Extension Notice for the Extension Period by
causing the Trustee to transmit notice of such higher Spread or Spread
Multiplier to the Holder of this Security. Such notice shall be irrevocable. All
Securities with respect to which the Stated Maturity is extended and with
respect to which the Holders of such Securities have not tendered such
Securities for repayment (or have validly revoked any such tender) pursuant to
the succeeding paragraph will bear such higher Spread or Spread Multiplier for
the Extension Period.
If the Company elects to extend the Stated Maturity of this Security,
the Holder hereof will have the option to elect repayment of this Security by
the Company on the Original Stated Maturity at a price
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<PAGE> 21
equal to the aggregate principal amount hereof outstanding plus interest accrued
to such date. In order to obtain such repayment, the Holder hereof must follow
the procedures set forth in Section 5 above for optional repayment except that
the period for delivery of this Security or notification to the Trustee shall be
at least 25 but not more than 35 days prior to the Original Stated Maturity and
except that, if the Holder hereof has tendered this Security for repayment
pursuant to an Extension Notice, such Holder may, by written notice to the
Trustee, revoke such tender for repayment until the close of business on the
tenth day prior to the Original Stated Maturity.
9. Optional Renewal. If so specified above, this Security may be renewed by the
Holder of the Security on an Interest Payment Date (specified above) occurring
in or prior to the twelfth month following the Original Issue Date (the "Initial
Maturity Date") in accordance with the procedures described below.
On the Interest Payment Date occurring in the sixth month (unless a
different interval (the "Special Election Interval") is specified above) prior
to the Initial Maturity Date (as specified above) of a Renewable Note (the
"Initial Renewal Date") and on the Interest Payment Date occurring in each sixth
month (or in the last month of each Special Election Interval) after such
Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal
Date"), the term of this Security may be extended to the Interest Payment Date
occurring in the twelfth month (or, if a special Election Interval is specified
the last month in a period equal to twice the Special Election Interval) after
such Renewal Date, if the Holder of this Security elects to extend the term of
this Security or any portion hereof as provided below. If the Holder of this
Security does not elect to extend the term of any portion of the principal
amount of this Security during the specified period prior to any renewal Date,
such portion will become due and payable on the Interest Payment Date occurring
in the sixth month (or the last month in the Special Election Interval) after
such Renewal Date (the "New Maturity Date").
A Holder of this Security may elect to renew the term of this Security,
or if specified above, any portion thereof, by delivering a notice to such
effect to the Paying Agent not less than 15 nor more than 30 days prior to such
Renewal Date (unless another period is specified above as the "Special Election
Period"). Such election will be irrevocable and will be binding upon each
subsequent Holder of this Security. An election to renew the term of this
Security may be exercised with respect to less than the entire principal amount
of this Security only if so specified above and only in such principal amount,
or any integral multiple in excess thereof, as specified above. Notwithstanding
the foregoing, the term of this Security may not be extended beyond the maturity
specified above.
If the Holder of this Security does not elect to renew the term of this
Security, this Security must be presented to the Trustee (or any duly appointed
paying agent) and, if this Security is issued in definitive form, as soon as
practicable following receipt of this Security the Trustee (or any duly
appointed paying agent) shall issue in exchange herefor in the name of the
Holder (i) a Security, in a principal amount equal to the principal amount of
this Security for which no election to renew the term thereof was exercised,
with terms identical to those specified on this Security (except that such
Security shall have a fixed, nonrenewable maturity on the New Maturity Date) and
(ii) if an election to renew is made with respect to less than the full
principal amount of this Security, a replacement Security, in a principal amount
equal to the principal amount of such exchanged Security for which the election
to renew was made, with terms identical to such exchanged Security.
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<PAGE> 22
10. Sinking Fund. Unless otherwise specified above, this Security will not be
subject to any sinking fund.
11. Discount Securities. If this Security is a Discount Security, unless
otherwise specified above the amount payable in the event of redemption by the
Company, repayment at the option of the Holder or acceleration of maturity, in
lieu of the principal amount due at the Stated Maturity hereof, shall be the
Amortized Face Amount of this Security as of the date of such redemption,
repayment or acceleration. For the purpose of determining whether Holders of the
requisite amount of Securities outstanding under the Indenture have made a
demand or given a notice or waiver or taken any other action, the outstanding
principal amount will be deemed to be the Amortized Face Amount. The "Amortized
Face Amount" of this Security shall be the amount equal to (i) the Issue Price
(as set forth above) plus (ii) that portion of the difference between the Issue
Price and the principal amount hereof that has accrued at the Yield to Maturity
(as set forth above) (computed in accordance with generally accepted United
States bond yield computation principles) at the date as of which the Amortized
Face Amount is calculated, but in no event shall the Amortized Face Amount of
this Security exceed its stated principal amount.
12. Modification and Waivers. The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of Securities of each series at the time
outstanding, on behalf of the Holders of all Securities of such series, to waive
certain existing defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
13. Obligations Unconditional. No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Security at the times, place
and rate, and in the coin or currency, herein prescribed.
14. Defeasance. The Indenture contains provisions for defeasance and covenant
defeasance at any time of the indebtedness on this Security upon compliance by
the Company with certain conditions set forth therein, which provisions apply to
this Security.
15. Authorized Denominations. The Securities of this series are issuable only in
global or certificated registered form, without coupons. Unless otherwise set
forth above, Securities denominated in U.S. dollars will be issued in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. Securities denominated in a specified currency other than U.S. dollars
will be issued in the denomination or denominations set forth above. As provided
in the Indenture and subject to certain limitations therein set forth and to the
limitations described below, if applicable, Securities of this series
22
<PAGE> 23
are exchangeable for a like aggregate principal amount of Securities of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
16. Registration of Transfer. As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Security is
registrable in the Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of, premium, if any, and interest, on this Security are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
those of the Company, the Trustee and the Registrar requiring such written
instrument of transfer duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Securities in certificated form in exchange for
each Global Security. In addition, the Company may at any time determine not to
have Securities represented by a Global Security, and, in such event, will issue
Securities in certificated form in exchange for the Global Security representing
such Security. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in certificated form of
Securities equal in principal amount to such beneficial interest and to have
such Securities registered in its name. Unless otherwise set forth above,
Securities so issued in certificated form will be issued in denominations of
U.S. $1,000 (or such other denomination as shall be specified by the Company) or
any amount in excess thereof which is an integral multiple of U.S. $1,000 and
will be issued in registered form only, without coupons.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the person in whose name this Security is registered as the owner hereof for all
purposes.
17. Events of Default. If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. In the event that the principal of the Securities of
this series is so declared to be due and payable, if this Security is a Discount
Security, unless otherwise specified above, the amount of principal of this
Security that becomes due and payable upon such declaration shall be equal to
the Amortized Face Amount as defined in Section 10 hereof. Upon payment (i) of
the aggregate applicable amounts of principal of the Securities of this series
so declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.
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<PAGE> 24
18. Defined Terms. All terms used in this Security which are defined in the
Prospectus Supplement dated July 24, 1997 or in the Indenture and are not
otherwise defined in this Security shall have the meanings assigned to them in
the Indenture.
19. GOVERNING LAW. THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -- _________________ Custodian _______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
___________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
/ /
_____________________________________________________________________
Please print or type name and address, including zip code of assignee
________________________________________________________________________________
the within Security of SMITH BARNEY HOLDINGS INC. and all rights thereunder and
does hereby irrevocably constitute and appoint
_______________________________________________________________________ Attorney
to transfer the said Security on the books of the within-named Company, with
full power of substitution in the premises.
Dated __________________________
SIGNATURE GUARANTEED: __________________________________________________________
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<PAGE> 26
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Security in every
particular, without alteration or
enlargement or any change
whatsoever.
26
<PAGE> 27
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby irrevocably elects to have
the Company repay the principal amount of this Security or portion hereof below
designated at (i) the Optional Repayment Price indicated above, if this Security
is to be repaid pursuant to the Optional Repayment provision hereof or (ii) 100%
of the principal amount of this Security to be repaid plus accrued interest to
the Optional Reset Date, if this Security is to be repaid pursuant to the
Optional Interest Reset provision hereof, or to the Original Stated Maturity, if
this Security is to be repaid pursuant to the Optional Extension of Maturity
provision hereof.
Dated:____________________________ __________________________________
Signature
Sign exactly as name appears on
the front of this Security
[SIGNATURE GUARANTEED -- required
only if Securities are to be
issued and delivered to other than
the registered Holder]
__________________________________
Principal amount to be repaid, if Fill in for registration of
amount to be repaid is less than Securities if to be issued
the principal amount of this otherwise than to the registered
Security (principal amount Holder:
remaining must be an authorized
denomination)
Name: ____________________________
$_________________________________ Address: _________________________
_________________________
(Please print name and address
including zip code)
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
27
