CGSH Draft: 11/14/96
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SALOMON INC
TO
CITIBANK, N.A.
Trustee
---------------------------------
NINTH SUPPLEMENTAL INDENTURE
Dated as of November , 1996
Supplemental to Indenture dated as of December 1, 1988
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This Ninth Supplemental Indenture (the "Supplemental
Indenture") is made and entered into as of November , 1996 between
Salomon Inc, a Delaware corporation (the "Company"), and Citibank,
N.A., a national banking association (the "Trustee"), as Trustee under
the Indenture dated as of December 1, 1988, as amended by the First
Supplemental Indenture dated September 7, 1990, the Second
Supplemental Indenture thereto dated June 12, 1991, the Third
Supplemental Indenture thereto dated July 1, 1992, the Fourth
Supplemental Indenture thereto dated October 29, 1992, the Fifth
Supplemental Indenture thereto dated December 14, 1993, the Sixth
Supplemental Indenture thereto dated December 29, 1994, the Seventh
Supplemental Indenture thereto dated February 1, 1996 and the Eighth
Supplemental Indenture thereto dated May 8, 1996 between the Company
and the Trustee (as amended to the date hereof, the "Indenture").
WHEREAS, the parties hereto previously entered into the
Indenture to provide for the issuance and sale by the Company from
time to time of its Senior Debt Securities (the "Debt Securities");
and
WHEREAS, Sections 1101(2), (5) and (6) of the Indenture
provide that the Company, when authorized by a Board Resolution, and
the Tr ustee, at any time and from time to time, may enter into an
indenture supplemental to the Indenture, in form satisfactory to the
Trustee, without the consent of any holder of Debt Securities, (a) to
add to the covenants of the Company, for the benefit of all or any
series of Debt Securities and the Coupons, if any, pertaining thereto
(and, if such covenants are to be for the benefit of less than all
such series, stating that such covenants are expressly being included
solely for the benefit of such series), (b) to change or eliminate any
of the provisions of the Indenture, provided that any such change or
elimination shall become effective only when there is no Outstanding
Debt Security or Coupon (as such terms are defined in the Indenture)
of any series created prior to the execution of such supplemental
indenture that is entitled to the benefit of such provision and as to
which such supplemental indenture would apply and (c) to establish the
form or terms of Debt Securities and Coupons, if any, of any series
as permitted by Section 201 and 301 of the Indenture; and
WHEREAS, the Company has duly authorized the creation of a
series of its Debt Securities denominated its " % Exchangeable Notes
Due February 1, 2001" representing up to of its "Debt Exchangeable for
Common StockSM" (such Debt Securities being referred to herein as the
"DECSSM"), the principal amount of which is mandatorily exchangeable
at Maturity into Common Shares, par value $1.00 per share (the
"Cincinnati Xxxx Common Shares"), of Cincinnati Xxxx Inc. an Ohio
corporation ("Cincinnati Xxxx"), or, at the option of the Company
under certain circumstances, cash, in either case at the Exchange Rate
(as defined herein) and/or other securities or cash as described here
in; and
WHEREAS, the entry into this Supplemental Indenture by the
parties hereto is in all respects authorized by the provisions of the
Indenture; and
WHEREAS the Company has duly authorized the execution and
delivery of this Supplemental Indenture, and all things necessary have
been done to make the DECS, when executed by the Company and
authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this
Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.
NOW, THEREFORE:
For and in consideration of the premises and purchase of the
Debt Securities of any series issued hereunder by the Holders thereof,
it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Debt Securities of any such
series, as follows:
ARTICLE I
Certain Provisions of General Application
SECTION 1.01. Definitions.
For all purposes of the Indenture and this Supplemental
Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article;
(2) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to the Indenture and this Supplemental
Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(3) capitalized terms used but not defined herein are used as
they are defined in the Indenture.
"Adjustment Event" has the meaning set forth in Section
2.04(b).
"Business Day" means any day that is not a Saturday, a
Sunday or a day on which the NYSE or banking institutions or trust
companies in The City of New York are authorized or obligated by law
or executive order to close.
"Cincinnati Xxxx Common Shares" has the meaning set forth in
the recitals to this Supplemental Indenture.
"Closing Price" of any security on any date of determination
means (a) the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of such security (regular way)
on the NYSE on such date, (b) if such security is not listed for
trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on
which such security is so listed, (c) if such security is not so
listed on a United States national or regional securities exchange, as
reported by the Nasdaq Stock Market of the National Association of
Securities Dealers, Inc. Automated Quotation System, (d) if such
security is not so reported, the last quoted bid price for such
security in the over-the-counter market as reported by the National
Quotation Bureau or similar organization or (e) if such security is
not so quoted, the average of the mid-point of the last bid and ask
prices for such security from each of at least three nationally
recognized investment banking firms selected for this purpose by the
Company.
"Current Market Price" means, as of any date of
determination, the average Closing Price per Cincinnati Xxxx Common
Share on the 20 Trading Days immediately prior to the date of
determination; provided, however, that if there are not 20 Trading
Days for the Cincinnati Xxxx Common Shares occurring after the 60th
calendar day immediately prior to, but not including, such date, the
Current Market Price shall be determined as the market value per
Cincinnati Xxxx Common Share as of such date as determined by a
nationally recognized investment banking firm retained for this
purpose by the Company.
"DECS" has the meaning set forth in the recitals to this
Supplemental Indenture.
"Dilution Event" has the meaning set forth in Section
2.05(a)(ii).
"Exchange Rate" means a rate equal to (a) if the Maturity
Price is greater than or equal to $ (the "Threshold Appreciation
Price"), Cincinnati Xxxx Common Shares per DECS, (b) if the Maturity
Price is less than the Threshold Appreciation Price but is greater
than the Initial Price, (i) a fraction equal to the Initial Price
divided by the Maturity Price of (ii) one Cincinnati Xxxx Common Share
per DECS (such fractional share being calculated to the nearest
1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next higher 1/10,000th of a share) and (c) if the
Maturity Price is less than or equal to the Initial Price, one
Cincinnati Xxxx Common Share per DECS; provided, however, that the
Exchange Rate is subject to adjustment from time to time pursuant to
Section 2.04(a).
"Initial Price" means $ per Cincinnati Xxxx Common Share.
"Maturity Price" means the average Closing Price per
Cincinnati Xxxx Common Share on the 20 Trading Days immediately prior
to, but not including, the date of Maturity, which price shall be
determined by the Company and notified to the Trustee; provided,
however, that if there are not 20 Trading Days for the Cincinnati Xxxx
Common Shares occurring later than the 60th calendar day immediately
prior to, but not including, the date of Maturity, Maturity Price
means the market value per Cincinnati Xxxx Common Share as of Maturity
as determined by a nationally recognized investment banking firm
retained for this purpose by the Company.
"NYSE" means the New York Stock Exchange, Inc.
"Ordinary Cash Dividend" has the meaning set forth in
subparagraph (b)(5) of Section 2.04.
"Ordinary Share Dividend" has the meaning set forth in
subparagraph (b)(5) of Section 2.04.
"Reported Securities" has the meaning set forth in
subparagraph (b)(3) of Section 2.04.
"Share Components" means the ratios of Cincinnati Xxxx
Common Shares per DECS specified in clauses (a), (b)(ii) and (c) of
the definition of "Exchange Rate" set forth in this Article.
"Threshold Appreciation Price" has the meaning specified in
the definition of "Exchange Rate" set forth in this Article.
"Trading Day" means a Business Day on which the security the
Closing Price of which is being determined (a) is not suspended from
trading on any national or regional securities exchange or association
or over-the-counter market at the close of business and (b) has traded
at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for
the trading of such security.
"Transaction Value" means (a) for any cash received in any
Adjustment Event, the amount of cash received per Cincinnati Xxxx
Common Share, (b) for any Reported Securities received in any
Adjustment Event, an amount equal to (x) the average Closing Price per
security of such Reported Securities on the 20 Trading Days
immediately prior to Maturity multiplied by (y) the number of such
Reported Securities (as adjusted pursuant to subparagraph (b)(4) of
Section 2.04) received per Cincinnati Xxxx Common Share and (c) for
any property received in any Adjustment Event other than cash or such
Reported Securities, an amount equal to the fair market value of the
property received per Cincinnati Xxxx Common Share on the date such
property is received, as determined by a nationally recognized
investment banking firm retained for this purpose by the Company;
provided, however, that in the case of clause (b), (i) with respect to
securities that are Reported Securities by virtue of only clause (iv)
of the definition of Reported Securities, Transaction Value with
respect to such Reported Security means the average of the mid-point
of the last bid and ask prices for such Reported Security as of
Maturity from each of at least three nationally recognized investment
banking firms retained for such purpose by the Company multiplied by
the number of such Reported Securities (as adjusted) received per
Cincinnati Xxxx Common Share and (ii) with respect to all other
Reported Securities, if there are not 20 Trading Days for any
particular Reported Security occurring after the 60th calendar day
immediately prior to, but not including, the date of Maturity,
Transaction Value with respect to such Reported Security means the
market value per security of such Reported Security as of Maturity as
determined by a nationally recognized investment banking firm retained
for such purpose by the Company multiplied by the number of such
Reported Securities (as adjusted) received per Cincinnati Xxxx Common
Share. For purposes of calculating Transaction Value, any cash,
Reported Securities or other property receivable in an Adjustment
Event shall be deemed to have been received immediately prior to the
close of business on the record date for such Adjustment Event or, if
there is no record date for such Adjustment Event, immediately prior
to the close of business on the effective date of such Adjustment
Event.
SECTION 1.02. Effect of Headings.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 1.03. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture
by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.04. Separability.
In case any provision in this Supplemental Indenture or the
DECS shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.05. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this
Supplemental Indenture by any of the provisions of the Trust Indenture
Act of 1939, as amended, such required provision shall control.
SECTION 1.06. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, expressed or
implied, shall give to any person, other than the parties hereto and
their successors hereunder, and the Holders of the DECS any benefit or
any legal or equitable right, remedy or claim under this Supplemental
Indenture.
SECTION 1.07. Application of Supplemental Indenture.
This Supplemental Indenture shall take effect on the date
hereof, and shall apply only to the DECS. This Supplemental Indenture
shall have no effect on any other Debt Securities, whether originally
issued prior to the date hereof or thereafter.
SECTION 1.08. Governing Law.
THIS SUPPLEMENTAL INDENTURE AND THE DECS SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS
SUPPLEMENTAL INDENTURE AND EACH SUCH DECS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ARTICLE II
The DECS
SECTION 2.01. Title and Terms.
There is hereby created under the Indenture a series of Debt
Securities known and designated as the " % Exchangeable Notes Due
February 1, 2001" of the Company. The aggregate principal amount of
DECS that may be authenticated and delivered under this Indenture is
limited to $ , except for DECS authenticated and delivered upon
reregistration of, transfer of, or in exchange for, or in lieu of,
other DECS pursuant to Section 304, 305, 306, 1106 or 1308 of the
Indenture.
The Stated Maturity for payment of principal of the DECS
shall be February 1, 2001 and the DECS shall bear interest at the rate
of % per annum, from the date of original issuance or the most recent
Interest Payment Date to which interest has been paid or duly provided
for, payable quarterly in arrears on February 1, May 1, August 1 and
November 1 of each year (commencing February 1, 1997), to the persons
in whose names the DECS (or any predecessor securities) are registered
at the close of business on the fifteenth day of the calendar month
immediately preceding such interest payment date, until principal
thereof is paid or made available for payment.
The DECS shall be issuable in denominations of $[the Initial
Price] and any integral multiple thereof.
The DECS shall not be issued as Discount Securities.
The DECS shall be initially issued in the form of a Global
Security and the Depositary for the DECS shall be the Depository Trust
Company, New York, New York.
The DECS shall be issuable as Registered Securities only,
without coupons.
The Company shall not be obligated to pay any additional
amount on the DECS in respect of taxes, except as otherwise provided
in Sections 2.06 and 3.02.
The form of DECS attached hereto as Exhibit A is hereby
adopted, pursuant to Section 1101(6) of the Indenture, as a form of
Debt Securities of a series that consists of DECS.
The DECS shall be mandatorily exchangeable as provided in
Section 2.02.
SECTION 2.02. Exchange at Maturity.
Subject to Sections 2.04(b) and (c), at Maturity the
principal amount of each DECS shall be mandatorily exchanged by the
Company into a number of Cincinnati Xxxx Common Shares at the Exchange
Rate; provided, however, that, pursuant to Section 2.03, no fraction
of a Cincinnati Xxxx Common Share shall be issued. The Holders of the
DECS shall be
responsible for the payment of any and all brokerage costs upon the
subsequent sale of such shares. The Company may, at its option, in
lieu of delivering Cincinnati Xxxx Common Shares, deliver cash in an
amount (calculated to the nearest 1/100th of a dollar per DECS or, if
there is not a nearest 1/100th of a dollar, then to the next higher
1/100th of a dollar) equal to the product of the number of Cincinnati
Xxxx Common Shares otherwise deliverable on the date of Maturity
multiplied by the Maturity Price; provided, however, that if such
option is exercised, the Company shall deliver cash with respect to
all, but not less than all, of the Cincinnati Xxxx Common Shares that
would otherwise be deliverable. In determining the amount of cash
deliverable in exchange for the DECS in lieu of Cincinnati Xxxx Common
Shares pursuant to the prior sentence hereof, if more than one DECS
shall be surrendered for exchange at one time by the same Holder, the
amount of cash which shall be delivered upon exchange shall be
computed on the basis of the aggregate number of DECS so surrendered
at Maturity.
SECTION 2.03. No Fractional Shares.
If more than one DECS shall be surrendered for exchange
pursuant to Section 2.02 at one time by the same Holder, the number of
full Cincinnati Xxxx Common Shares which shall be delivered upon such
exchange, in whole or in part, as the case may be, shall be computed
on the basis of the aggregate number of DECS surrendered. No
fractional shares or scrip representing fractional Cincinnati Xxxx
Common Shares shall be issued or delivered upon any exchange pursuant
to Section 2.02 of any DECS. In lieu of any fractional Cincinnati Xxxx
Common Share which, but for the immediately preceding sentence, would
otherwise be deliverable upon such exchange, the Company, through any
applicable Paying Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional
share at the Maturity Price. The Company shall, upon such exchange of
any DECS, provide cash to any applicable Paying Agent in an amount
equal to the cash payable with respect to any fractional Cincinnati
Xxxx Common Shares deliverable upon such exchange, and the Company
shall retain such fractional Cincinnati Xxxx Common Share.
SECTION 2.04. Adjustment of Exchange Rate.
(a) Adjustment for Distributions, Reclassifications, etc.
The Exchange Rate shall be subject to adjustment from time to time as
follows:
(i) If Cincinnati Xxxx shall:
(A) pay a dividend (other than an Ordinary Share
Dividend) or make a distribution, in either case, with
respect to Cincinnati Xxxx Common Shares in such shares;
(B) subdivide or split the outstanding Cincinnati Xxxx
Common Shares into a greater number of shares;
(C) combine the outstanding Cincinnati Xxxx Common
Shares into a smaller number of shares; or
(D) issue by reclassification (other than a
reclassification pursuant to clause (ii), (iii), (iv) or (v)
of the definition of Adjustment Event in paragraph (b) of
this Section) of Cincinnati Xxxx Common Shares any common
shares of Cincinnati Xxxx;
then, in any such event, the Exchange Rate shall be adjusted by
adjusting each of the Share Components of the Exchange Rate in
effect immediately prior to such event so that a Holder of any
DECS shall be entitled to receive, upon mandatory exchange
pursuant to Section 2.02 of the principal amount of such DECS at
Maturity, the number of Cincinnati Xxxx Common Shares (or, in the
case of a reclassification referred to in clause (D) of this
sentence, the number of other common shares of Cincinnati Xxxx
issued pursuant thereto) which such Holder of such DECS would
have owned or been entitled to receive immediately following such
event had such DECS been exchanged immediately prior to such
event or any record date with respect thereto. Each such
adjustment shall become effective at the opening of business on
the Business Day next following the record date for determination
of holders of Cincinnati Xxxx Common Shares entitled to receive
such dividend or distribution in the case of a dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision, split, combination
or reclassification. Each such adjustment shall be made
successively.
(ii) If Cincinnati Xxxx shall, after the date hereof,
issue rights or warrants to all holders of Cincinnati Xxxx Common
Shares entitling them to subscribe for or purchase Cincinnati
Xxxx Common Shares (other than rights to purchase Cincinnati Xxxx
Common Shares pursuant to a plan for the reinvestment of
dividends or interest) at a price per share less than the Current
Market Price of Cincinnati Xxxx Common Shares on the Business Day
next following the record date for the determination of holders
of Cincinnati Xxxx Common Shares entitled to receive such rights
or warrants, then in each case the Exchange Rate shall be
adjusted by multiplying each of the Share Components of the
Exchange Rate in effect on the record date for the issuance of
such rights or warrants by a fraction, of which the numerator
shall be (A) the number of Cincinnati Xxxx Common Shares
outstanding on the record date for the issuance of such rights or
warrants, plus (B) the number of additional Cincinnati Xxxx
Common Shares offered for subscription or purchase pursuant to
such rights or warrants, and of which the denominator shall be
(x) the number of Cincinnati Xxxx Common Shares outstanding on
the record date for the issuance of such rights or warrants, plus
(y) the number of additional Cincinnati Xxxx Common Shares which
the aggregate offering price of the total number of Cincinnati
Xxxx Common Shares so offered for subscription or purchase
pursuant to such rights or warrants would purchase at such
Current Market Price, which number of additional shares shall be
determined by multiplying such total number of shares by the
exercise price of such rights or warrants and dividing the
product so obtained by such Current Market Price. Such adjustment
shall become effective at the
opening of business on the Business Day next following the record
date for the determination of holders of Cincinnati Xxxx Common
Shares entitled to receive such rights or warrants. To the extent
that such rights or warrants expire prior to the Maturity of the
DECS and Cincinnati Xxxx Common Shares are not delivered pursuant
to such rights or warrants prior to such expiration, the Exchange
Rate shall be readjusted to the Exchange Rate which would then be
in effect had such adjustments for the issuance of such rights or
warrants been made upon the basis of delivery of only the number
of Cincinnati Xxxx Common Shares actually delivered pursuant to
such rights or warrants. Each such adjustment shall be made
successively.
(iii) Any Cincinnati Xxxx Common Shares issuable in
payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date for
such dividend for purposes of calculating the number of
outstanding Cincinnati Xxxx Common Shares under paragraph (a)(ii)
of this Section.
(iv) All adjustments to the Exchange Rate shall be
calculated to the nearest 1/10,000th of a Cincinnati Xxxx Common
Share (or if there is not a nearest 1/10,000th of a share, to the
next lower 1/10,000th of a share). No adjustment in the Exchange
Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this paragraph
(a)(iv) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. If an adjustment
is made to the Exchange Rate pursuant to paragraph (a)(i) or
(a)(ii) of this Section, an adjustment shall also be made to the
Maturity Price as such term is used throughout the definition of
Exchange Rate set forth in Section 1.01. The required adjustment
to the Maturity Price shall be made at Maturity by multiplying
the Maturity Price by the cumulative number or fraction
determined under paragraphs (a)(i) and/or (a)(ii) of this Section
by which the original Exchange Rate was multiplied to adjust such
rate. In the case of the reclassification of any Cincinnati Xxxx
Common Shares into any common shares of Cincinnati Xxxx other
than Cincinnati Xxxx Common Shares, such common shares shall be
deemed Cincinnati Xxxx Common Shares solely to determine the
Maturity Price and to apply the Exchange Rate at Maturity. Each
such adjustment to the Exchange Rate and the Maturity Price shall
be made successively.
(b) Other Adjustment Events. In the event of (i) any
dividend or distribution by Cincinnati Xxxx to all holders of
Cincinnati Xxxx Common Shares of evidences of its indebtedness or
other assets (excluding any Ordinary Share Dividends and other
dividends or distributions referred to in clause (A) of paragraph
(a)(i) of this Section, any common shares issued pursuant to a
reclassification referred to in clause (D) of paragraph (a)(i) of this
Section and any Ordinary Cash Dividends or any issuance by Cincinnati
Xxxx to all holders of Cincinnati Xxxx Common Shares
of rights or warrants to subscribe for or purchase any of its
securities (other than rights or warrants referred to in paragraph
(a)(ii) of this Section), (ii) any consolidation or merger of
Cincinnati Xxxx with or into another entity (other than a merger or
consolidation in which Cincinnati Xxxx is the continuing corporation
and in which the Cincinnati Xxxx Common Shares outstanding immediately
prior to the merger or consolidation are not exchanged for cash,
securities or other property of Cincinnati Xxxx or another
corporation), (iii) any sale, transfer, lease or conveyance to another
corporation of the property of Cincinnati Xxxx as an entirety or
substantially as an entirety, (iv) any statutory exchange of
securities of Cincinnati Xxxx with another corporation (other than in
connection with a merger or acquisition) or (v) any liquidation,
dissolution or winding up of Cincinnati Xxxx (any such event, an
"Adjustment Event"), the property receivable by Holders of DECS at
Maturity shall be subject to adjustment from time to time as follows:
(1) Each Holder of a DECS will receive at Maturity, in
lieu of or (in the case of an Adjustment Event described in
clause (i) of this paragraph (b)) in addition to, each Cincinnati
Xxxx Common Share that it would otherwise receive as required by
Section 2.02, cash in an amount equal to (A) if the Maturity
Price is greater than or equal to the Threshold Appreciation
Price, multiplied by the Transaction Value, (B) if the
Maturity Price is less than the Threshold Appreciation Price but
greater than the Initial Price, the product of (x) the Initial
Price divided by the Maturity Price multiplied by (y) the
Transaction Value and (C) if the Maturity Price is less than or
equal to the Initial Price, the Transaction Value.
(2) Following an Adjustment Event, the Maturity Price,
as such term is used throughout the definition of Exchange Rate
and in subparagraph (b)(1) above, shall be deemed to equal (A)
the Maturity Price of the Cincinnati Xxxx Common Shares, as
adjusted pursuant to the provisions of paragraph (a)(iv) of this
Section, plus (B) the Transaction Value.
(3) Notwithstanding the foregoing, with respect to any
securities received in such Adjustment Event (A)(i) that are
listed on a United States national securities exchange, (ii) that
are reported on a United States national securities system
subject to last sale reporting, (iii) that are traded in the
over-the-counter market and reported on the National Quotation
Bureau or similar organization or (iv) for which bid and ask
prices are available from at least three nationally recognized
investment banking firms and (B) that are either (x) perpetual
equity securities or (y) non-perpetual equity securities or debt
securities with a stated maturity after the Stated Maturity
("Reported Securities"), the Company may, at its option, in lieu
of delivering the amount of cash deliverable in respect of
Reported Securities received in an Adjustment Event, determined
in accordance with subparagraph (b)(1), deliver a number of such
Reported Securities with a value equal to such cash amount, as
determined in accordance with clause (b) of the definition of
Transaction Value set forth in Section 1.01; provided, however,
that (i) if such option is exercised, the Company shall deliver
Reported Securities in respect of all, but not less than all,
cash amounts that would otherwise be deliverable in respect of
Reported Securities received in an Adjustment Event, (ii) the
Company may not exercise such option if the Company has elected
to deliver cash in lieu of Cincinnati Xxxx Common Shares, if any,
deliverable upon Maturity or if such Reported Securities have not
yet been delivered to the holders entitled thereto following such
Adjustment Event or any record date with respect thereto and
(iii) subject to clause (ii) of this proviso, the Company must
exercise such option if the Company does not elect to deliver
cash in lieu of Cincinnati Xxxx Common Shares, if any,
deliverable upon Maturity. If the Company elects to deliver
Reported Securities, each Holder of a DECS will be responsible
for the payment of any and all brokerage and other transaction
costs upon the sale of such Reported Securities. If, following
any Adjustment Event, any Reported Security ceases to qualify as
a Reported Security, then (x) the Company may no longer elect to
deliver such Reported Security in lieu of an equivalent amount of
cash and (y) notwithstanding clause (b) of the definition of
Transaction Value, the Transaction Value of such Reported
Security shall mean the fair market value of such Reported
Security on the date such security ceases to qualify as a
Reported Security, as determined by a nationally recognized
investment banking firm retained for this purpose by the Company.
(4) The amount of cash and/or the kind and number of
securities into which the DECS shall be exchangeable after an
Adjustment Event shall be subject to adjustment following the
date of such Adjustment Event in the same manner and upon the
occurrence of the same type of events as described in paragraphs
(a) and (b) of this Section with respect to Cincinnati Xxxx
Common Shares and Cincinnati Xxxx.
(5) For purposes of the foregoing, the term "Ordinary
Cash Dividend" means, with respect to any consecutive 365-day
period, any dividend with respect to Cincinnati Xxxx Common
Shares paid in cash to the extent that the amount of such
dividend, together with (i) the aggregate amount of all other
dividends on the Cincinnati Xxxx Common Shares paid in cash plus
(ii) the aggregate value of all Ordinary Share Dividends on
Cincinnati Xxxx Common Shares (with Ordinary Share Dividends
valued at the Current Market Price of Cincinnati Xxxx Common
Shares on the record date for such dividend) during such 365-day
period, does not exceed on a per share basis 10% of the average
of the Closing Prices of the Cincinnati Xxxx Common Shares over
such 365-day period. The term "Ordinary Share Dividend" means,
with respect to any calendar quarter, any dividend with respect
to Cincinnati Xxxx Common Shares paid in such shares to the
extent that the value of such dividend, together with (i) the
aggregate amount of all dividends on the Cincinnati Xxxx Common
Shares paid in cash plus (ii) the aggregate value of all other
dividends on Cincinnati Xxxx Common Shares paid in such shares
(with each share dividend valued at the Current Market Price of
Cincinnati Xxxx Common Shares on the record date for such
dividend) during such calendar quarter, does not exceed on a per
share basis 0.4% of the average of the Closing Prices of the
Common Shares over such calendar quarter. For purposes of this
subparagraph (b)(5), any dividend, whether in cash or shares,
shall be deemed to be paid as of the record date for such
dividend.
SECTION 2.05. Notice of Adjustments and Certain Other
Events.
(a) Whenever the Exchange Rate is adjusted as herein
provided or an Adjustment Event occurs, the Company shall:
(i) forthwith compute the adjusted Exchange Rate (or
Transaction Value) in accordance with Section 2.04 and prepare a
certificate signed by an officer of the Company setting forth the
adjusted Exchange Rate (or Transaction Value), the method of
calculation thereof in reasonable detail and the facts requiring
such adjustment and upon which such adjustment is based, which
certificate shall be conclusive, final and binding evidence of
the correctness of the adjustment, and file such certificate
forthwith with the Trustee; and
(ii) within ten Business Days following the occurrence
of an event that permits or requires an adjustment to the
Exchange Rate pursuant to Section 2.04(a) (each, a "Dilution
Event") or an Adjustment Event that permits or requires a change
in the consideration to be received by Holders pursuant to
Section 2.04(b) (or, in any case, if the Company is not aware of
such occurrence, as soon as practicable after becoming so aware),
provide written notice to the Trustee and to the Holders of the
outstanding DECS of the occurrence of such Dilution Event or
Adjustment Event including a statement in reasonable detail
setting forth the method by which any adjustment to the Exchange
Rate or change in the consideration to be received was determined
and setting forth the revised Exchange Rate or consideration, as
the case may be, per DECS; provided, however, that in respect of
any adjustment to the Maturity Price, such notice need only
disclose the factor by which the Maturity Price is to be
multiplied pursuant to Section 2.04(a)(iv) in order to determine
which clause of the definition of the Exchange Rate will apply at
Maturity, it being understood that, until Maturity, the Exchange
Rate itself cannot be determined.
(b) In case at any time while any of the DECS are
outstanding the Company receives notice that:
(i) Cincinnati Xxxx shall declare a dividend (or any
other distribution) on or in respect of the Cincinnati Xxxx
Common Shares to which Section 2.04(a)(i) or (ii) shall apply
(other than any cash dividends and distributions, if any, paid
from time to time by Cincinnati Xxxx that constitute Ordinary
Cash Dividends);
(ii) Cincinnati Xxxx shall authorize the issuance to
all holders of Cincinnati Xxxx Common Shares of rights or
warrants to subscribe for or purchase Cincinnati Xxxx Common
Shares or of any other subscription rights or warrants;
(iii) there shall occur any conversion or
reclassification of Cincinnati Xxxx Common Shares (other than a
subdivision or combination of such outstanding Cincinnati Xxxx
Common Shares) or any consolidation, merger or reorganization to
which Cincinnati
Xxxx is a party and for which approval of any shareholders of
Cincinnati Xxxx is required, or the sale or transfer of all or
substantially all of the assets of Cincinnati Xxxx; or
(iv) there shall occur the voluntary or involuntary
dissolution, liquidation or winding up of Cincinnati Xxxx;
then the Company shall promptly cause to be delivered to the Trustee
and any applicable Paying Agent and filed at the office or agency
maintained for the purpose of exchange of DECS at Maturity in the
Borough of Manhattan, in The City of New York by the Trustee (or any
applicable Paying Agent), and shall promptly cause to be mailed to the
Holders of DECS at their last addresses as they shall appear upon the
registration books of the Security Registrar, at least eight days
before the date hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one is specified),
a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or grant of rights or warrants
or, if a record is not to be taken, the date as of which the holders
of Cincinnati Xxxx Common Shares of record to be entitled to such
dividend, distribution or grant of rights or warrants are to be
determined, or (y) the date, if known by the Company, on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective. Following
any Adjustment Event, the provisions of this paragraph (b) shall apply
with respect to any Reported Securities in the same manner as with
respect to Cincinnati Xxxx and the Cincinnati Xxxx Common Shares.
(c) On or prior to four Business Days preceding the Stated
Maturity of the DECS, the Company shall provide notice to the Holders
of record of the DECS and to the Trustee and will publish a notice in
a daily newspaper of national circulation stating whether the Company
will deliver, in accordance with Section 2.02, Cincinnati Xxxx Common
Shares or cash (and/or, in accordance with Section 2.04(b), cash or
Reported Securities) upon the mandatory exchange of the principal
amount of the DECS. After the close of business on the Business Day
immediately preceding the Stated Maturity of the DECS, the Company
shall notify the Trustee in writing of the number of Cincinnati Xxxx
Common Shares and/or Reported Securities, or the amount of cash to be
paid per DECS.
SECTION 2.06. Taxes.
(a) The Company will pay any and all documentary, stamp,
transfer or similar taxes that may be payable in respect of the
transfer and delivery of Cincinnati Xxxx Common Shares (or Reported
Securities) pursuant hereto; provided, however, that the Company shall
not be required to pay any such tax which may be payable in respect of
any transfer involved in the delivery of Cincinnati Xxxx Common Shares
(or Reported Securities) in a name other than that in which the DECS
so exchanged were registered, and no such transfer or delivery shall
be made unless and until the person requesting such transfer has paid
to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
(b) The parties hereto hereby agree, and each Holder of a
DECS by its purchase of a DECS hereby agrees:
(i) to treat, for U.S. federal income tax purposes,
each DECS as a forward purchase contract to purchase Cincinnati
Xxxx Common Shares at Maturity (including as a result of
acceleration or otherwise) (the "forward purchase contract
characterization"), under the terms of which contract (a) at the
time of issuance of the DECS the Holder deposits irrevocably with
the Company a fixed amount of cash equal to the purchase price of
the DECS to assure the fulfillment of the Holder's purchase
obligation described in clause (c) below, which deposit will
unconditionally and irrevocably be applied at Maturity to satisfy
such obligation, (b) until Maturity the Company will be obligated
to pay interest on such deposit at a rate equal to the stated
rate of interest on the DECS as compensation to the Holder for
the Company's use of such cash deposit during the term of the
DECS, and (c) at Maturity such cash deposit unconditionally and
irrevocably will be applied by the Company in full satisfaction
of the Holder's obligation under the forward purchase contract,
and the Company will deliver to the Holder the number of
Cincinnati Xxxx Common Shares that the Holder is entitled to
receive at that time pursuant to the terms of the DECS (subject
to the Company's right to deliver cash in lieu of the Cincinnati
Xxxx Common Shares);
(ii) to treat, consistent with the above
characterization, (x) amounts paid to the Company in respect of
the original issue of a DECS as allocable in their entirety to
the amount of the cash deposit attributable to such DECS, and (y)
amounts denominated as interest that are payable with respect to
the DECS as interest payable on the amount of such deposit,
includible annually in the income of the Holder as interest
income in accordance with its method of accounting; and
(iii) to file all U.S. federal, state and local income
and franchise tax returns consistent with the forward purchase
contract characterization (unless required otherwise by an
applicable taxing authority).
SECTION 2.07. Delivery of Securities upon Maturity.
All Cincinnati Xxxx Common Shares and Reported Securities
deliverable to Holders upon the Maturity of the DECS shall be
delivered to such Holders, whenever practicable, in such manner (such
as by book-entry transfer) so as to assure same-day transfer of such
securities to Holders and otherwise in the manner customary at such
time for delivery of such securities and securities of the same type.
ARTICLE III
Covenants
SECTION 3.01. Shares Free and Clear.
With respect to the DECS only and for the benefit of only
the holders thereof, the Company covenants and warrants that upon
exchange of a DECS at Maturity pursuant to the Indenture and this
Supplemental Indenture, the Holder of a DECS shall receive valid title
to the Cincinnati Xxxx Common Shares (and, in the event an Adjustment
Event has occurred, the Reported Securities) for which such DECS is at
such time exchangeable pursuant to this Indenture, free and clear of
any and all liens, claims, charges and encumbrances whatsoever. Except
as provided in Section 2.06(a), the Company shall pay all taxes and
charges with respect to the delivery of Cincinnati Xxxx Common Shares
(and Reported Securities) delivered in exchange for DECS hereunder. In
addition, the Company further warrants that any Cincinnati Xxxx Common
Shares (and Reported Securities) delivered in exchange for DECS
hereunder shall be free of any transfer restrictions (other than such
as are solely attributable to any Holder's status as an affiliate of
Cincinnati Xxxx or the issuer of such Reported Securities).
Section 3.02. Discharge of Indenture.
With respect to the DECS only and for the benefit of only
the holders thereof, the Company surrenders all rights and powers
conferred on it by subclause (B)(ii) or (iii) of clause (1) of Section
401 of the Indenture. With respect to the DECS only and for the
benefit of only the holders thereof, the Company shall have the right
to discharge the Indenture pursuant to and in accordance with the
remaining provisions of Section 401 of the Indenture if, instead of
depositing with the Trustee Currency, the Company deposits Cincinnati
Xxxx Common Shares, Reported Securities and/or cash sufficient to pay
and discharge the entire indebtedness on the DECS for principal and
interest to the date of Stated Maturity.
ARTICLE IV
Miscellaneous
SECTION 4.01. Confirmation of Indenture.
The Indenture, as supplemented and amended by this
Supplemental Indenture and all other indentures supplemental thereto,
is in all respects ratified and confirmed, and the Indenture, this
Supplemental Indenture and all indentures supplemental thereto shall
be read, taken and construed as one and the same instrument.
SECTION 4.02. Concerning the Trustee.
The Trustee assumes no duties, responsibilities or
liabilities by reason of this Supplemental Indenture other than as set
forth in the Indenture.
-----------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as of the day
and year first above written.
SALOMON INC
By:
---------------------------
Name:
Title:
Attest:
---------------------
Name:
Title:
CITIBANK, N.A., as Trustee
By:
---------------------------
Name:
Title:
Attest:
---------------------
Name:
Title:
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the day of , 1996, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that
she/he is the of SALOMON INC, one of the corporations
described in and which executed the foregoing instrument; that
she/he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that
she/he signed her/his name thereto by like authority.
------------------------
Notary Public
SEAL
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the day of , 1996, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that
he is the of CITIBANK, N.A., one of the corporations described in
and which executed the foregoing instrument; that she/he knows the
seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she/he signed
her/his name thereto by like authority.
------------------------
Notary Public
SEAL
Exhibit A
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depositary or a nominee of the Depositary. Unless and until it is
exchanged in whole or in part for the individual Debt Securities
represented hereby, 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.
Unless this Security is presented by an authorized
representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx) to the Company or its agent for registration of
transfer, exchange or payment, and any security issued is registered
in the name of Cede & Co., or such other name as requested by an
authorized representative of the Depository Trust Company and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
NO.--------------- CUSIP NO. 79549 B 867
[Form of Face of DECS]
SALOMON INC
DECS SM
(Debt Exchangeable for Common Stock SM)
% Exchangeable Note Due February 1, 2001
(Subject to Exchange at Maturity into Common Shares,
Par Value $1.00 Per Share, of Cincinnati Xxxx Inc.)
Salomon Inc, a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal sum
of Dollars (or $ for each Debt Exchangeable for Common
Stock (each, a "DECS") represented by this note) on February 1, 2001
(subject to the mandatory exchange provisions at Maturity described
below), and to pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on such principal amount from the date of
original issuance or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for,
quarterly on February 1, May 1, August 1 and November 1 of each year
(each, an "Interest Payment Date" and, collectively, the "Interest
Payment Dates"), commencing February 1, 1997, at the rate per annum
specified in the title of this note, until the principal
F-1
hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in said Indenture, be paid to the person in whose
name this DECS (or the DECS in exchange or substitution for which this
DECS was issued) is registered at the close of business on the Regular
Record Date (as defined below) for interest payable on such Interest
Payment Date. The Regular Record Date for any interest payment is the
close of business on the fifteenth day of the calendar month
immediately preceding the relevant Interest Payment Date, whether or
not a Business Day (as defined below), provided that interest payable
at Maturity shall be payable to the person to whom the principal
hereof is payable. In any case where such Interest Payment Date shall
not be a Business Day, then (notwithstanding any other provision of
said Indenture or this DECS) payment of such interest need not be made
on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on such Interest Payment Date,
and, if such payment is so made, no interest shall accrue for the
period from and after such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to
be payable to the registered Holder on such Regular Record Date, and
may be paid to the person in whose name this DECS (or the DECS in
exchange or substitution for which this DECS was issued) is registered
at the close of business on a record date for the payment of such
interest to be fixed by the Trustee for the DECS, notice whereof shall
be given to Holders of the DECS not less than ten days prior to such
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
the DECS may be listed and not deemed impracticable by the Trustee,
and upon such notice as may be required by such exchange.
At Maturity, the principal amount of this DECS will be
mandatorily exchanged into a number of common shares, par value $1.00
per share (the "Cincinnati Xxxx Common Shares"), of Cincinnati Xxxx
Inc. ("Cincinnati Xxxx") at the Exchange Rate (as defined below). The
"Exchange Rate" is equal to (a) if the Maturity Price (as defined
below) is greater than or equal to $ (the "Threshold Appreciation
Price"), Cincinnati Xxxx Common Shares per DECS, (b) if the
Maturity Price is less than the Threshold Appreciation Price but is
greater than $ (the "Initial Price"), (i) a fraction equal to the
Initial Price divided by the Maturity Price of (ii) one Cincinnati
Xxxx Common Share per DECS (such fractional share being calculated to
the nearest 1/10,000th of a share or, if there is not a nearest
1/10,000th of a share, to the next higher 1/10,000th of a share) and
(c) if the Maturity Price is less than or equal to the Initial Price,
one Cincinnati Xxxx Common Share per DECS. ACCORDINGLY, THE VALUE OF
THE CINCINNATI XXXX COMMON SHARE TO BE RECEIVED BY HOLDERS OF THE DECS
(OR, AS DISCUSSED BELOW, THE CASH EQUIVALENT THAT MAY BE RECEIVED IN
LIEU OF SUCH SHARES) AT MATURITY WILL NOT NECESSARILY EQUAL THE
PRINCIPAL AMOUNT OF SUCH DECS. Any Cincinnati Xxxx Common Shares
delivered by the Company to the Holders of the DECS that are not
affiliated with Cincinnati Xxxx shall be free of any transfer
restrictions, and the holders of DECS will be responsible for the
payment of any and all brokerage costs upon the subsequent sale of
such shares. No fractional Cincinnati Xxxx Common Shares will be
issued at Maturity as provided in the Indenture.
F-2
The Company may at its option, in lieu of delivering
Cincinnati Xxxx Common Shares, deliver cash in an amount equal to the
value of such number of Cincinnati Xxxx Common Shares at the Maturity
Price as provided in the Indenture; provided, however, that if such
option is exercised, the Company shall deliver cash with respect to
all, but not less than all, of the Cincinnati Xxxx Common Shares that
would otherwise be deliverable.
Notwithstanding the foregoing, (i) in the case of certain
dilution events, the Exchange Rate will be subject to adjustment and
(ii) in the case of certain adjustment events, the consideration
received by Holders of DECS at Maturity will be Cincinnati Xxxx Common
Shares, other securities and/or cash, each as provided in the
Indenture.
The "Maturity Price" is defined as the average Closing Price
per Cincinnati Xxxx Common Share on the 20 Trading Days immediately
prior to (but not including) the date of Maturity or, under certain
circumstances, the market value per Cincinnati Xxxx Common Share as of
the date of Maturity as determined by a nationally recognized
investment banking firm retained for this purpose by the Company, as
provided in the Indenture. The "Closing Price" of any security on any
date of determination means (i) the closing sale price (or, if no
closing sale price is reported, the last reported sale price) of such
security (regular way) on the New York Stock Exchange (the "NYSE") on
such date, (ii) if such security is not listed for trading on the NYSE
on any such date, as reported in the composite transactions for the
principal United States securities exchange on which such security is
so listed, (iii) if such security is not so listed on a United States
national or regional securities exchange, as reported by the Nasdaq
Stock Market, (iv) if such security is not so reported, the last
quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or
(v) if such security is not so quoted, the average of the mid-point of
the last bid and ask prices for such security from each of at least
three nationally recognized investment banking firms selected for this
purpose by the Company. A "Trading Day" is defined as a Business Day
on which the security the Closing Price of which is being determined
(i) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the
close of business and (ii) has traded at least once on the national or
regional securities exchange or association or over-the-counter market
that is the primary market for the trading of such security. "Business
Day" means any day that is not a Saturday, a Sunday or a day on which
the NYSE or banking institutions or trust companies in The City of New
York, New York are authorized or obligated by law or executive order
to close.
Interest on this DECS will be payable, and delivery of
Cincinnati Xxxx Common Shares (or, at the Company's option, cash in an
amount equal to the value of such Cincinnati Xxxx Common Shares and/or
such other consideration as permitted or required herein) in exchange
for the principal amount of this DECS at Maturity will be made upon
surrender of this DECS, at the office or agency of the Company
maintained for that purpose in The Borough of Manhattan, in The City
of New York and payment of interest on (and, if the Company elects not
to deliver Cincinnati Xxxx Common Shares and/or other securities upon
exchange at Maturity, the cash equivalent thereof payable upon
exchange for the principal amount of) this DECS will be made in such
coin or currency of the United States of America as at the time of
payment is legal tender
F-3
for payment of public and private debts; provided, however, that at
the option of the Company payment of interest may be made by check
mailed to the address of the person entitled thereto as such address
shall appear on the register for the DECS.
ADDITIONAL PROVISIONS OF THIS DECS ARE CONTAINED ON THE
REVERSE HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee for this DECS by manual
signature, this DECS shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose. "DECS" and "Debt
Exchangeable for Common Stock" are service marks of Salomon Brothers
Inc.
IN WITNESS WHEREOF, Salomon Inc has caused this instrument
to be duly executed under its corporate seal.
Dated: SALOMON INC
--------------------
Name:
Title:
Attest:
Name:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the within-mentioned
Indenture.
CITIBANK, N.A., as Trustee
By:
------------------------------
Authorized Officer
F-4
[Form of Reverse of DECS]
SALOMON INC
% Exchangeable Note Due February 1, 2001
(Subject to Exchange at Maturity into Common Shares,
Par Value $1.00 Per Share, of Cincinnati Xxxx Inc.)
This DECS is one of a duly authorized issue of debentures,
notes or other evidences of indebtedness (hereinafter called the "Debt
Securities") of the Company of the series hereinafter specified, which
series is limited in aggregate principal amount to $ , all such Debt
Securities issued and to be issued under an indenture dated as of
December 1, 1988, as supplemented by the First Supplemental Indenture
dated September 7, 1990, the Second Supplemental Indenture thereto
dated June 12, 1991, the Third Supplemental Indenture thereto dated
July 1, 1992, the Fourth Supplemental Indenture thereto dated October
29, 1992, the Fifth Supplemental Indenture thereto dated December 14,
1993, the Sixth Supplemental Indenture thereto dated December 29,
1994, the Seventh Supplemental Indenture thereto dated February 1,
1996, the Eighth Supplemental Indenture thereto dated May 8, 1996 and
the Ninth Supplemental Indenture thereto dated November , 1996 (as
so supplemented and as may be further supplemented from time to time,
the "Indenture") between the Company and Citibank, N.A., as trustee
(herein called the "Trustee", which term includes any successor
Trustee under the Indenture), pursuant to which the Company has
designated Citibank, N.A. as Trustee for the DECS, to which Indenture
and all other indentures supplemental thereto reference is hereby made
for a statement of the rights and limitation of rights thereunder of
the Holders of the Debt Securities and of the rights, obligations,
duties and immunities of the Trustee for each series of Debt
Securities and of the Company, and the terms upon which the Debt
Securities are and are to be authenticated and delivered. As provided
in the Indenture, the Debt Securities may be issued in one or more
series, which different series may be issued in various aggregate
principal amounts, may be denominated in currencies other than U.S.
Dollars (including composite currencies), may mature at different
times, may bear interest, if any, at different rates, may be subject
to different redemption provisions, if any, may be subject to
different sinking fund or other purchase provisions, if any, may be
subject to different covenants and Events of Default and may otherwise
vary as in the Indenture provided or permitted. This DECS is one of a
series of the Debt Securities designated as % Exchangeable Notes Due
February 1, 2001.
The DECS may not be redeemed and are not entitled to the
benefit of any sinking fund.
The provisions contained in the Indenture for defeasance of
the Company's obligations upon compliance by the Company with certain
conditions set forth therein will not be applicable to the DECS.
Certain provisions contained in the Indenture pertaining to
satisfaction and discharge of the entire principal of all the Debt
Securities of any series upon compliance by the Company with certain
conditions set forth therein will not be applicable to the DECS. The
Ninth Supplemental Indenture provides that the Company may under
certain circumstances discharge its obligations under the Indenture by
delivering to the Trustee Cincinnati Xxxx Common Shares, other
securities and/or cash.
If an Event of Default with respect to the DECS, as defined
in the Indenture, shall occur and be continuing, the principal of all
DECS may be declared due and payable and therefore will result in the
mandatory exchange of the principal amount thereof for Cincinnati Xxxx
Common Shares (or, at the Company's option, cash and/or such other
consideration as permitted or required herein), all in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt
Securities of each series under the Indenture at any time by the
Company with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debt Securities at the time
outstanding of each series to be affected thereby. The Indenture also
contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Debt Securities of any series at the
time outstanding, on behalf of the Holders of all the Debt Securities
of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the
Indenture and their consequences with respect to such series. Any such
consent or waiver by the Holder of this DECS shall be conclusive and
binding upon such Holder and upon all future Holders of this DECS and
of any DECS issued upon the transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is
made upon this DECS.
No reference herein to the Indenture and no provision of
this DECS or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal
of and interest on this DECS at the times, place and rate, and in the
manner, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this DECS is transferable on the
register for the DECS, upon surrender of this DECS for registration of
transfer at the office or agency of the Company to be maintained for
that purpose in The City of New York, New York, or at any other office
or agency of the Company maintained for that purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar for the DECS duly
executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new DECS, of authorized
denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. No service charge
shall be made for any such transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the registration of
such transfer or exchange, other than certain exchanges not involving
any transfer.
Certain capitalized terms used in this DECS but not defined
herein have the meanings set forth in the Indenture.
R-2
THIS DECS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Trustee for the DECS and any agent of the
Company or such Trustee may treat the person in whose name this DECS
is registered as the owner hereof for the purpose of receiving payment
as herein provided and for all other purposes, whether or not this
DECS be overdue, and neither the Company, such Trustee nor any such
agent shall be affected by notice to the contrary.
R-3
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 UNIF GIFT MIN - Custodian
common (Cust) (Minor)
Under Uniform Gifts
TEN ENT - as tenants by to Minors Act
the entireties
------------------------------
JT TEN - as joint (State)
tenants with
right of
survivorship
and not as
tenants in
common
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 Taxpayer I.D. or other
Identifying Number of Assignee
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code of Assignee
---------------------------------------------------------------------------
the within DECS and all rights thereunder, hereby irrevocably
constituting and appointing
attorney
-------------------------------------------------------------------
to transfer said DECS on the books of Salomon Inc with full power
of substitution in the premises.
Dated:
--------------------- ----------------------------------
Signature
----------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within DECS in
every particular, without
alteration or enlargement or
any change whatsoever.
R-4
