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Exhibit 5(b)
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
July 1, 1999
Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, NY 10013
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
c/o Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, New York 10013
Re: Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to (1)SSBH Capital I, SSBH Capital
II, SSBH Capital III and SSBH Capital IV (each, an "SSBH Trust" and, together,
the "SSBH Trusts"), each a statutory business trust formed under the laws of the
State of Delaware, and (2) Salomon Smith Barney Holdings Inc. (the "Company"), a
New York corporation, which is the successor to Salomon Smith Barney Holdings
Inc., a Delaware corporation ("Old SSBH"), following a statutory merger
effective as of the date hereof, in connection with the preparation of
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (File
No. 333-38931), to be filed by the Company and the SSBH Trusts with the
Securities and Exchange Commission (the "Commission") on the date hereof (such
Registration Statement, as so amended, the "Registration Statement"). The
Registration Statement relates to (A) the sale from time to time in connection
with market-making transactions of (i) the SSBH Trust I Preferred
Securities (as defined below) and (ii) the SSBH Trust I Junior Subordinated
Debt Securities (as defined below) and (B) the issuance and sale from time to
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
Page 2
time, pursuant to Rule 415 of the General Rules and Regulations
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
of, among other things, the following securities: (i) preferred securities (the
"Trust Preferred Securities") of each of the SSBH Trusts and (ii) unsecured
junior subordinated debt securities (the "Junior Subordinated Debt Securities")
of the Company which are to be issued pursuant to an indenture, dated as of
January 28, 1998, between Old SSBH and The Chase Manhattan Bank, as debt trustee
(the "Debt Trustee"), as amended and supplemented by a First Supplemental
Indenture, dated as of the date hereof (the "First Supplemental Indenture"),
between the Company and the Debt Trustee (such indenture, as so amended and so
supplemented, the "Indenture"). The Trust Preferred Securities and Junior
Subordinated Debt Securities are collectively referred to herein as the "Offered
Securities."
The Trust Preferred Securities of SSBH Capital I (the "SSBH Trust I
Preferred Securities"), having an aggregate liquidation preference of
$400,000,000, were originally issued pursuant to the Amended and Restated
Declaration of Trust of SSBH Capital I dated as of January 28, 1998
("Declaration I"), among Old SSBH, as sponsor and as the issuer of the SSBH
Trust I Junior Subordinated Debt Securities held by The Chase Manhattan Bank, as
the property trustee (the "Property Trustee"), Chase Manhattan Bank Delaware, as
Delaware trustee (the "Delaware Trustee"), and Charles W. Scharf and Michael J.
Day, as regular trustees (together, the "Regular Trustees").
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
Page 3
The Trust Preferred Securities of each of the other SSBH Trusts are
to be issued pursuant to an Amended and Restated Declaration of Trust of such
SSBH Trust (each, a "Declaration" and, collectively, the "Declarations"), each
such Declaration being among the Company, as sponsor and as the issuer of the
Junior Subordinated Debt Securities to be held by the Property Trustee, the
Delaware Trustee and the Regular Trustees.
This opinion is being delivered in accordance with the requirements
of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement; (ii) the form of Prospectus and Prospectus Supplement
relating to the Trust Preferred Securities included in the Registration
Statement (collectively, the "Prospectus"); (iii) the certificate of trust of
each of (A) SBH Capital I, SBH Capital II and SBH Capital III (the "1996
Certificates of Trust") filed with the Secretary of State of the State of
Delaware on December 19, 1996 and (B) the certificate of trust of SSBH Capital
IV filed with the Secretary of State of the State of Delaware on October 24,
1997 (the "1997 Certificate of Trust"); (iv) the certificate of amendment of
each of the 1996 Certificates of Trust changing the names of SBH Capital I, SBH
Capital II and SBH Capital III to, respectively, SSBH Capital I, SSBH Capital II
and SSBH Capital III (as amended, and together with the 1997
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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Certificate of Trust, the "Certificates of Trust") (v) an executed copy of the
Underwriting Agreement, dated January 23, 1998 (the "SSBHI Underwriting
Agreement"), among SSBH Capital I, Old SSBH and Smith Barney Inc., A.G. Edwards
& Sons, Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber Incorporated and
Prudential Securities Incorporated, as Representatives of the several
underwriters named therein; (vi) a Cross-Receipt dated January 28, 1998,
acknowledging receipt of payment by the underwriters party to the SSBH I
Underwriting Agreement for the SSBH Trust I Preferred Securities; (vii) an
executed copy of Declaration I and the form of the Declaration of each of the
other SSBH Trusts (including the designations of the terms of the Trust
Preferred Securities of such SSBH Trust annexed thereto); (viii) the global
certificates evidencing the SSBH Trust I Preferred Securities and the form of
the Trust Preferred Securities of each of the other SSBH Trusts; (ix) an
executed copy of the Preferred Securities Guarantee Agreement dated as of
January 28, 1998 (the "SSBH Trust I Preferred Securities Guarantee"), between
Old SSBH and The Chase Manhattan Bank, as guarantee trustee (the "Preferred
Securities Guarantee Trustee"), and the form of the preferred securities
guarantee agreement (the "Preferred Securities Guarantee"), between Old SSBH and
the Preferred Securities Guarantee Trustee; (x) the certificates evidencing the
$412,372,000 aggregate principal amount of Junior Subordinated Debt Securities
issued by Old SSBH on January 28, 1998 in connection with the issuance of the
SSBH Trust I Preferred Securities (the "SSBH Trust I Junior Subordinated Debt
Securities") and the form of the Junior Subordinated Debt Securities; (xi) an
executed copy of
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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the Indenture; (xii) the Restated Certificate of Incorporation of the Company,
as amended to date; (xiii) the By-laws of the Company as currently in effect;
(xiv) the Agreement and Plan of Merger between Old SSBH and the Company, dated
as of the date hereof; (xv) an executed copy of the Certificate of Merger of Old
SSBH into the Company under Section 904 of the Business Corporation Law filed
with the Department of State of the State of New York on the date hereof; (xvi)
an executed copy of the Officers' Certificate attached as Annex A hereto (the
"Officers' Certificate"), dated the date hereof, delivered pursuant to Section
8.1 of the Indenture; (xvii) certain resolutions adopted by the Board of
Directors of Old SSBH; and (xviii) certain resolutions adopted by the Board of
Directors of the Company (the "Board of Directors"). We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed or to be executed, we have assumed that the parties thereto,
other than the Company and SSBH Trusts, had or will have the power, corporate or
other, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action,
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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corporate or other, and execution and delivery by such parties of such documents
and that, except to the extent set forth in paragraphs (2) and (3) below, such
documents constitute or will constitute valid and binding obligations of such
parties. In addition, we have assumed that the Declaration of each SSBH Trust
(other than Declaration I), the Preferred Securities of each SSBH Trust (other
than the SSBH Trust I Preferred Securities), the Preferred Securities Guarantee
(other than the SSBH Trust I Preferred Securities Guarantee) and the Junior
Subordinated Debt Securities (other than the SSBH Trust I Junior Subordinated
Debt Securities), when executed, will be executed in substantially the form
reviewed by us and that the terms of the Junior Subordinated Debt Securities
(other than the SSBH Trust I Junior Subordinated Debt Securities) when
established in conformity with the Indenture will not violate any applicable
law. As to any facts material to the opinions expressed herein which were not
independently established or verified, we have relied upon oral or written
statements and representations of officers, trustees and other representatives
of the Company, the SSBH Trusts and others. In addition, we have assumed the
accuracy of the statements made in the Officers' Certificate.
Members of our firm are admitted to the bar in the States of New
York and Delaware and we do not express any opinion as to the laws of any other
jurisdiction.
Based on and subject to the foregoing and to the other
qualifications and limitations set forth herein, we are of the opinion that:
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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1. With respect to the Trust Preferred Securities of each SSBH Trust
other than SSBH Capital I (the "Offered Trust Preferred Securities"), when (i)
the Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Securities Act; (ii)
the Prospectus has been prepared, delivered and filed in compliance with the
Securities Act and the applicable rules and regulations thereunder; (iii) the
Board of Directors, including any appropriate committee appointed thereby, and
appropriate officers of the Company have taken all necessary corporate action to
approve the terms of the Offered Trust Preferred Securities; (iv) the
Declaration of each SSBH Trust other than SSBH Capital I is duly executed and
delivered by the parties thereto; (v) the terms of the Offered Trust Preferred
Securities have been established in accordance with the Declaration; (vi) the
Offered Trust Preferred Securities have been issued and executed in accordance
with the Declaration and paid for in the manner contemplated in the Registration
Statement or the Prospectus; and (vii) if the Offered Trust Preferred Securities
are to be sold pursuant to a firm commitment underwritten offering, the
underwriting agreement with respect to the Offered Trust Preferred Securities
has been duly authorized, executed and delivered by the Company and the other
parties thereto, (1) the Offered Trust Preferred Securities will be duly
authorized for issuance and will be validly issued, fully paid and
nonassessable, representing undivided beneficial interests in the assets of such
SSBH Trust and (2) the holders of the Offered Trust Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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State of Delaware (the "DGCL"). The SSBH Trust I Preferred Securities have been
duly authorized, and are validly issued, fully paid and nonassessable,
representing undivided beneficial interests in the assets of SSBH Capital I and
the holders of the SSBH Trust I Preferred Securities are entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the DGCL. We bring to your attention,
however, that the holders of the Trust Preferred Securities may be obligated,
pursuant to their respective Declarations, to (i) provide indemnity and/or
security in connection with and pay taxes or governmental charges arising from
transfers of Trust Preferred Securities and (ii) provide security and indemnity
in connection with the requests of or directions to the Property Trustee of such
SSBH Trust to exercise its rights and powers under such Declaration.
2. With respect to the Preferred Securities Guarantee relating to
the Offered Trust Preferred Securities, when (i) the Registration Statement, as
finally amended (including all necessary post-effective amendments), has become
effective under the Securities Act; (ii) the Prospectus has been prepared,
delivered and filed in compliance with the Securities Act and the applicable
rules and regulations thereunder; (iii) the Board of Directors, including any
appropriate committee appointed thereby, and appropriate officers of the Company
have taken all necessary corporate action to approve the terms of the Preferred
Securities Guarantee; (iv) the Declaration of each SSBH Trust other than SSBH
Capital I is duly executed and delivered by the parties thereto; (v) the terms
of the Offered Trust Preferred
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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Securities have been established in accordance with the Declaration; (vi) the
Offered Trust Preferred Securities have been issued and executed in accordance
with the Declaration and paid for in the manner contemplated in the Registration
Statement or the Prospectus; and (vii) if the Offered Preferred Securities are
to be sold pursuant to a firm commitment underwritten offering, the underwriting
agreement with respect to such Offered Preferred Securities has been duly
authorized, executed and delivered by the applicable SSBH Trust and other
parties thereto, the Preferred Securities Guarantee relating to the Offered
Trust Preferred Securities, when duly executed and delivered by the parties
thereto, will be, in each case, a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that (a) enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, or other similar
laws now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity) and (b) rights to indemnity and
contribution thereunder may be limited by applicable law or the public policy
underlying such law. The SSBH Trust I Preferred Securities Guarantee is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that (a) enforcement thereof may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity) and
(b)
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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rights to indemnity and contribution thereunder may be limited by applicable
law or the public policy underlying such law.
3. With respect to any series of the Junior Subordinated Debt
Securities other than the SSBH Trust I Junior Subordinated Debt Securities (the
"Offered Debt Securities"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective under the Securities Act; (ii) the Prospectus has been prepared,
delivered and filed in compliance with the Securities Act and the applicable
rules and regulations thereunder; (iii) the Board of Directors, including any
appropriate committee appointed thereby, and appropriate officers of the Company
have taken all necessary corporate action to approve the issuance and terms of
the Offered Debt Securities and related matters; (iv) the terms of the Offered
Debt Securities have been established in conformity with the Indenture; and (v)
the Offered Debt Securities are duly executed, delivered, authenticated and
issued in accordance with the Indenture and delivered and paid for as set forth
in the Prospectus, the Offered Debt Securities will be valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity). The
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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SSBH Trust I Junior Subordinated Debt Securities are valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
In rendering the opinions set forth in paragraphs 2 and 3 above, we
have assumed that the execution and delivery by the Company of the Indenture
(including the First Supplemental Indenture); the Preferred Securities
Guarantees (including the SSBH Trust I Preferred Securities Guarantee) and the
Junior Subordinated Debt Securities (including the SSBH Trust I Junior
Subordinated Debt Securities) and the performance of its obligations thereunder
did not and will not violate, conflict with or constitute a default under (i)
any agreement or instrument to which the Company or any of its properties is
subject (except that we do not make the assumption set forth in this clause (i)
with respect to the Company's Amended and Restated Certificate of Incorporation
or By-laws), (ii) any law, rule, or regulation to which the Company or any of
its properties is subject (except that we do not make the assumption set forth
in this clause (ii) with respect to those laws, rules and regulations (other
than securities and antifraud laws) of the State of New York which, in our
experience, are normally applicable to transactions of
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Salomon Smith Barney Holdings Inc.
SSBH Capital I
SSBH Capital II
SSBH Capital III
SSBH Capital IV
July 1, 1999
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the type contemplated by the Indenture, the Preferred Securities Guarantee and
the Junior Subordinated Debt Securities, but without our having made any special
investigation concerning any other laws, rules or regulations), (iii) any
judicial or regulatory order or decree of any governmental authority or (iv) any
consent, approval, license, authorization or validation of, or filing, recording
or registration with any governmental authority.
We hereby consent to the filing of this opinion with the Commission
as an exhibit to the Registration Statement. We also hereby consent to the use
of our name under the heading "Legal Matters" in the prospectuses which form a
part of the Registration Statement. In giving this consent, we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission
promulgated thereunder. This opinion is expressed as of the date hereof unless
otherwise expressly stated and we disclaim any undertaking to advise you of the
facts stated or assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP