<PAGE>
As filed with the Securities and Exchange Commission on June 27, 1997.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
TRAVELERS PROPERTY CASUALTY CORP.
(Exact name of registrant as specified in its charter)
Delaware 06-1445591
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Tower Square
Hartford, Connecticut 06183
(860) 277-0111
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------------
James M. Michener, Esq.
Travelers Property Casualty Corp.
One Tower Square
Hartford, Connecticut 06183
(860) 277-0111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
---------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than the securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE AMOUNT TO BE AGGREGATE PRICE PER AGGREGATE OFFERING REGISTRATION FEE
REGISTERED REGISTERED UNIT (1) PRICE
- --------------------- ------------- -------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Class A Common
Stock, $.01 par
value per share........ 1,000,000 shares $38.4375 $38,437,500 $11,648
</TABLE>
- ------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 and based on the average of the high and low prices of
the Class A Common Stock on June 26, 1997.
-------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
- -------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 27, 1997
This document constitutes part of a prospectus covering
securities that have been registered under the Securities Act
of 1933, as amended.
PROSPECTUS
TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN
This Prospectus relates to the Class A Common Stock, par value $.01 per
share (the "Common Stock"), of Travelers Property Casualty Corp. (the
"Company"), issuable pursuant to the Travelers Property Casualty Corp. Agency
Capital Accumulation Plan (the "Plan").
An aggregate of 1,000,000 shares of Common Stock has been authorized for
issuance pursuant to the Plan, which shares may be Restricted Agency Stock (as
hereinafter defined) and/or Agency Stock (as hereinafter defined). The
Restricted Agency Stock and/or Agency Stock will be issued from time to time by
the Company under the terms of the Plan directly to Eligible Agencies (as
hereinafter defined) (i) that elect to receive a portion of their Performance
Plus (as hereinafter defined) that would otherwise have been paid in cash in the
form of Common Stock that will be subject to restrictions on transferability and
forfeiture in certain circumstances (the "Restricted Agency Stock"), or (ii)
that are selected by the Committee (as hereinafter defined) to receive in
addition to any cash or other compensation otherwise payable to them Common
Stock that will generally not be subject to such restrictions (the "Agency
Stock"), in either case without the payment of any underwriting discount or
commission. The price of the Restricted Agency Stock for purposes of determining
the number of shares to be issued will be discounted at 25% from fair market
value (as hereinafter defined), or at the discretion of the Committee (as
hereinafter defined), at such other percentage as may be necessary to reflect
adequately the impact of the nature of the restrictions and the risk of
potential forfeiture of the Restricted Agency Stock.
In certain jurisdictions, a registered broker-dealer will act as agent on
behalf of the Company in order to comply with the securities laws of such
jurisdictions. Smith Barney Inc., an affiliate of the Company and a registered
broker-dealer, may act in such capacity. No broker's or dealer's commission or
discount will be paid to Smith Barney Inc. in connection with its agent's role,
except that Smith Barney Inc. will be reimbursed by the Company for its
expenses.
The Common Stock is currently traded on the New York Stock Exchange, Inc.
under the symbol "TAP." On June 26, 1997, the last sale price of the Common
Stock as reported on the New York Stock Exchange, Inc. was $38.625 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------------------
The date of this Prospectus is , 1997.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
FOR NORTH CAROLINA PURCHASERS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF
THIS PROSPECTUS OR ANY SUPPLEMENTS HERETO.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission ("Commission"). Such reports, proxy statements and other information
filed by the Company may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, NW, Washington, DC
20549, and at the Commission's regional offices at 7 World Trade Center, New
York, New York 10048, and Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661-2511. Copies of such material may also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, NW, Washington,
DC 20549 at prescribed rates. The Commission also maintains a site on the World
Wide Web, the address of which is http:// www.sec.gov, that contains reports,
proxy and information statements and other information regarding issuers, such
as the Company, that file electronically with the Commission. Such reports,
proxy statements and other information may also be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of the Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to such
Registration Statement for further information with respect to the Company and
the securities offered hereby. Any statement contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission or incorporated by reference herein are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed for a more complete description of the matter involved. Each
such statement is qualified in its entirety by such reference.
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<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K, as amended, for the fiscal year
ended December 31, 1996, the Company's Quarterly Report on Form 10-Q for the
three month period ended March 31, 1997, the Company's Current Reports on Form
8-K dated January 21, 1997, February 10, 1997 and April 17, 1997, and the
description of the Common Stock contained in the Company's Registration
Statement on Form 8-A, dated April 22, 1996 (File No. 1-14328), including any
amendment or reports filed for the purpose of updating such description, which
have been filed by the Company under the Exchange Act, are incorporated by
reference herein.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request of such person,
a copy of any and all of the documents referred to above which have been or may
be incorporated by reference herein, other than exhibits thereto (unless such
exhibits are specifically incorporated by reference in such documents). Requests
for such documents should be directed to Corporate Communications, Travelers
Property Casualty Corp., One Tower Square, Hartford, Connecticut 06183;
telephone number: (860) 277-0111.
The Company's principal executive offices are located at One Tower Square,
Hartford, Connecticut 06183, and the telephone number is (860) 277-0111.
USE OF PROCEEDS
The Company will not receive any cash proceeds in connection with the
issuance of the Restricted Agency Stock or the Agency Stock.
3
<PAGE>
TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN
GENERAL INFORMATION
The Plan provides for the issuance by the Company of Restricted Agency Stock
to Eligible Agencies (as hereinafter defined) that elect to participate in the
Plan and receive awards of Restricted Agency Stock in lieu of a portion of their
performance plus or participation payments ("Performance Plus") under
performance plus agreements with The Travelers Indemnity Company, Travelers
Casualty and Surety Company and The Standard Fire Insurance Company and their
respective property-casualty subsidiaries and affiliates (the "Insurance
Companies"), which Performance Plus would have been otherwise paid in cash. The
Plan also provides for the issuance by the Company of Agency Stock to Eligible
Agencies that are selected by the Committee.
The Plan was adopted by the Board of Directors of the Company (the
"Board") on April 23, 1997 and became effective on July 1, 1997. The purpose
of the Plan is to enable the Company and its Subsidiaries to attract, retain
and motivate independent property-casualty insurance agencies that are
appointed by the Insurance Companies to represent the Insurance Companies in
the sale of insurance or otherwise (the "Agencies"), to compensate them for
their contributions to the growth and profits of the Company and to encourage
ownership of the Common Stock on the part of such Agencies. The Plan is
administered by the Nominations, Compensation and Corporate Governance
Committee of the Board or any subcommittee thereof or such other committee
which may be appointed by the Board from time to time (the "Committee"). The
Plan is not subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
A summary of the features of the Plan is set forth below and is qualified in
its entirety by reference to the full text of the Plan, a copy of which is
attached as Annex A. Capitalized terms used but not defined herein shall have
the meanings set forth in the Plan. All determinations regarding participation
in and awards under the Plan shall be governed by the terms of the Plan and,
where applicable, the terms of the Restricted Agency Stock Award Agreement or
Agency Stock Award Agreement, as the case may be, between the Company and each
Eligible Agency (as hereinafter defined).
DESCRIPTION OF THE PLAN
ELIGIBILITY. Agencies that earn the minimum Performance Plus and are
selected from time to time by the Committee, in its discretion, shall be
eligible to participate in the Plan and receive one or more awards of
Restricted Agency Stock (the "Eligible Agencies") on a voluntary basis. The
minimum Performance Plus that must be earned for the calendar year for which
such Performance Plus is earned (the "Base Year") before a Restricted Agency
Stock award can be elected is currently $5,000 in respect of each of
Commercial Lines, Personal Lines and Bond, but the Committee may, in its
discretion, provide for alternative minimum Performance Plus that must be
earned. COMMERCIAL LINES, PERSONAL LINES AND BOND ARE NOT AGGREGATED FOR THIS
PURPOSE. Eligible Agencies that are selected from time to time by the
Committee, in its discretion, shall be eligible to receive one or more awards
of Agency Stock under the Plan.
As of June 1, 1997, the Company and its Subsidiaries had approximately 7,500
active Agencies of which approximately 2,300 are expected to be eligible to
participate in the Plan.
4
<PAGE>
AWARDS OF RESTRICTED AGENCY STOCK. Eligible Agencies that elect to
participate in the Plan ("Participants") will receive awards of Restricted
Agency Stock at the time annual incentive awards are granted. Awards of
Restricted Agency Stock will be made in lieu of cash payment of a percentage of
the Participant's Performance Plus. With respect to each Eligible Agency or
group of Eligible Agencies, the Committee will determine (a) the number of
shares of Restricted Agency Stock to be awarded; (b) the minimum Performance
Plus that must be earned before a Restricted Agency Stock award can be elected;
(c) the minimum and maximum level of participation (expressed as a percentage of
Performance Plus) that will be available as an election to Eligible Agencies
participating in the Plan; (d) the frequency of awards; and (e) all other terms
and conditions applicable to participation in the Plan and the awards of
Restricted Agency Stock.
PERCENTAGE PARTICIPATION. Eligible Agencies are given the opportunity,
during each annual enrollment period for the Plan, to elect whether to
participate in the Plan and receive Restricted Agency Stock. Participants may
specify the percentage of their Performance Plus to be paid in Restricted
Agency Stock. An Agency may be required to make such election prior to such
Agency knowing whether it will be eligible to receive an award of Restricted
Agency Stock and prior to knowing the amount of the Performance Plus on which
eligibility to participate in the Plan and the amount on which the award will
be based. Under current administrative guidelines, with respect to
Performance Plus for Commercial Lines, Personal Lines or Bond, separately and
not in the aggregate, Participants may elect an award not less than an amount
equal to 10% of Performance Plus and not more than an amount equal to 50% of
Performance Plus. For purposes of these calculations, Performance Plus will
include the discounted value of any award of Restricted Agency Stock. The
percentage elected by each Participant of Performance Plus to be received in
Restricted Agency Stock in accordance with the terms of the Plan will be paid
in full in the form of Restricted Agency Stock (up to the maximum percentage
of Performance Plus eligible to be received in the form of Restricted Agency
Stock as described above and except for fractional shares of Restricted
Agency Stock which will be paid in cash). In the event there is an adjustment
to the Performance Plus after the date of an award of Restricted Agency Stock
under the Plan, the Company may pay the adjustment amount entirely in cash.
No election made under the Plan will be effective unless it is made in
accordance with the administrative procedures established by the Committee from
time to time, including timely receipt by the Company of annual election forms.
Percentage elections, once made for a given calendar year, are irrevocable and
may not be changed nor may participation in the Plan be discontinued during such
calendar year. Participants may discontinue participation or modify their
percentage elections during any annual enrollment period for the next ensuing
calendar year.
DISCOUNTED PRICE OF RESTRICTED AGENCY STOCK. The price of the Restricted
Agency Stock for purposes of determining the number of shares to be issued will
be discounted at 25% from fair market value or, at the discretion of the
Committee, such other discount rate as may be necessary to reflect adequately
the impact of the restricted nature and potential forfeiture of the Restricted
Agency Stock. For purposes of the Plan, "fair market value" of the Common Stock
shall be the average of the closing prices on the Composite Transactions Tape of
the New York Stock Exchange, Inc. for the five (5) trading days immediately
prior to the date of an award. The value of fractional shares will be paid
currently in cash. The Committee may provide for alternative methods of
determining the fair market value of the Common Stock.
AWARDS OF AGENCY STOCK. Eligible Agencies that are selected from time to
time by the Committee (which need not be Participants under the Plan) will
receive awards of Agency Stock at such times as the Committee shall determine.
The Agency Stock will be issued by the Company, under the terms of the
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<PAGE>
Plan,directly to Eligible Agencies that are selected by the Committee. Awards
of Agency Stock will be in addition to any cash or other compensation,
including Restricted Agency Stock, otherwise payable to such Agency. The
number of shares of Agency Stock awarded to an Eligible Agency under the Plan
may be determined by a formula or formulas approved by the Committee or may
be determined by the Committee individually on a case by case basis. With
respect to each Eligible Agency or group of Eligible Agencies, the Committee
will determine (a) the number of shares of Agency Stock to be awarded; (b)
the frequency of awards; and (c) all other terms and conditions, if any,
applicable to the awards of Agency Stock.
RESTRICTED AGENCY STOCK
RESTRICTIONS ON TRANSFERABILITY. A Participant will not be able to sell,
transfer, pledge, assign or otherwise dispose of the Restricted Agency Stock for
a period of three (3) years from the date of grant (or such other shorter or
longer period as may be determined to be applicable at the time of an award, in
the discretion of the Committee) (the "Restricted Period"); provided, however,
that for awards made in respect of the 1997 performance year, the Restricted
Period will be a period of two (2) years from the date of grant (or such other
shorter or longer period as may be determined to be applicable at the time of an
award of Restricted Agency Stock, in the discretion of the Committee). The
foregoing does not prohibit a Participant from entering into agreements with its
Producers, if any, with respect to rights and limitations associated with the
Restricted Agency Stock; provided, however, that Producers shall have no rights
under the Plan and neither the Company nor any of its Subsidiaries or affiliates
shall have any liability under such agreements or with respect thereto. The Plan
does not permit the attachment of liens on funds or securities held under the
Plan. The Committee may extend the initial Restricted Period with respect to any
award with the Participant's written consent and may provide for alternative
restrictions during any such extension of the Restricted Period. The Committee
may also provide for the lapse of restrictions in installments and accelerate or
waive any restrictions in whole or in part based upon such factors and
circumstances as the Committee may determine in its discretion.
DIVIDENDS; VOTING RIGHTS. Participants are entitled to receive regular
dividends or dividend equivalents with respect to the Restricted Agency Stock
during the Restricted Period. The Committee will determine the effect of any
extraordinary dividends or distributions on the Restricted Agency Stock. Unless
the Committee, in its discretion, determines otherwise at or prior to the time
of the grant of any award, during the Restricted Period (i) each Participant has
the right to direct the vote of his or her shares of Restricted Agency Stock,
and (ii) the Restricted Agency Stock shall be voted by the Company's senior
administrative officer in charge of administering the Plan, or such other person
as the Committee may designate (the "Plan Administrator"), and the Plan
Administrator shall vote such shares in accordance with instructions received
from the Participants. Restricted Agency Stock as to which no instructions are
received will be voted by the Plan Administrator proportionately in accordance
with instructions received from the Participants in the Plan.
VESTING AND FORFEITURE. Upon the scheduled expiration of the Restricted
Period or the lapsing of restrictions in the circumstances described below, the
Participant will obtain full dispositive power over his or her shares, including
(at the Company's option) sale of such shares to the Company. Shares so
repurchased by the Company will be available for future issuances under the
Plan. The Company makes no commitment to purchase any or all shares of
Restricted Agency Stock from Participants.
Each award of Restricted Agency Stock shall be subject to forfeiture based
upon a separate determination of performance in respect of the Line in which the
award was originally granted. In the event that in any of the calendar years
during the Restricted Period immediately following the Base Year a Participant's
annual written property-casualty premium (Eligible Premium or Eligible Net
Written
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Premium) (as defined in the Agency Performance Plus Agreements between a
Participant and the Insurance Companies) (the "Annual Premium") with the
Company and the Insurance Companies is reduced by 50% or more in Commercial
Lines, Personal Lines or Bond compared to such Participant's Annual Premium
(in the applicable line of business such as Commercial Lines, Personal Lines
or Bond (each, a "Line")) with the Company and such Insurance Companies in
the Base Year (as adjusted, if applicable, as provided below), such
Participant will forfeit all Restricted Agency Stock awarded with respect to
such Base Year related to the Line in which the Annual Premium was reduced.
Forfeiture determinations will be made separately for each award with
reference to the applicable Base Year and Line for that award. In addition,
unless the Committee in its discretion determines otherwise, failure by a
Participant to maintain its agency agreement with the Insurance Companies
throughout the Restricted Period will result in forfeiture of all Restricted
Agency Stock previously awarded to such Participant. Payments of cash
Performance Plus are not subject to forfeiture. Upon such forfeiture, the
Participant will have no further rights in the Restricted Agency Stock or the
Performance Plus in respect of which the Restricted Agency Stock was awarded.
The determination of whether there is a reduction in Annual Premiums in any
given year compared to the applicable Base Year resulting in forfeiture will
be based on Annual Premiums in Commercial Lines, Personal Lines or Bond,
depending upon whether the Restricted Agency Stock was awarded in respect of
Commercial Lines Performance Plus, Personal Lines Performance Plus or Bond
Performance Plus, and will be made by the Committee, in its discretion. In
the event any reduction in Annual Premiums resulting in forfeiture is the
result of the Insurance Companies terminating the Participant's appointment
other than for Cause, the restrictions on all Restricted Agency Stock
previously awarded to such Participant in respect of the Line for which the
appointment was terminated will immediately lapse. In the event any reduction
in Annual Premiums resulting in forfeiture is the result of the Insurance
Companies withdrawing from a Commercial Lines, Personal Lines or Bond market
or product that is material to a Participant, all determinations of forfeiture
with respect to such Participant under the Plan shall be recalculated and the
Participant's Base Year Annual Premium in the applicable Line reduced by the
percentage of the reduction in Annual Premium that was attributable to the
withdrawal; provided however, that if the reduction is 90% or more, the
restrictions on all Restricted Agency Stock previously awarded to such
Participant in respect of the Line in which the Annual Premium was so reduced
will immediately lapse. For these purposes, (i)
whether a "withdrawal" has occurred will be a determination made by the
Committee in its discretion and (ii) "material" shall be deemed to be 10% of
that Participant's Annual Premium writings with the Insurance Companies with
respect to the Line in which the Annual Premium was reduced; provided,
however, that the Committee shall have discretion to deem any other
circumstances or event to be a material withdrawal.
AGENCY STOCK
Shares of Agency Stock awarded to Eligible Agencies pursuant to the Plan
will generally not be subject to the restrictions or conditions described above
under "Restricted Agency Stock." However, if the Committee so determines, shares
of Agency Stock may be subject to sale or other restrictions.
ADMINISTRATION OF THE PLAN
THE COMMITTEE. The Nominations, Compensation and Corporate Governance
Committee consists of at least three (3) persons designated by the Board from
among its members. Members of the Committee are not appointed for a fixed
term, and serve at the discretion of the Board. The Committee may delegate
some or all of its authority over the administration of the Plan to any other
persons or a committee.
POWERS OF THE COMMITTEE. The Committee has exclusive discretion, from time
to time, among other things, to (a) designate Eligible Agencies; (b) determine
the minimum Performance Plus that must be earned before a Restricted Agency
Stock award can be elected; (c) determine the minimum and maximum percentage of
Performance Plus payable in Restricted Agency Stock that can be elected and all
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<PAGE>
other terms of participation; (d) designate those Eligible Agencies that are
to receive Agency Stock; (e) determine the amount and frequency of awards of
Restricted Agency Stock and Agency Stock; (f) in accordance with the
provisions of the Plan, determine and/or modify the conditions of vesting and
forfeiture and the other terms and conditions applicable to each award under
the Plan; and (g) make all other determinations which it deems necessary or
desirable in the interpretation and administration of the Plan. The Committee
has the authority to administer, construe and interpret the Plan, and its
decisions are final, binding and conclusive. Any claims or disputes arising
out of awards granted under the Plan shall be resolved by arbitration in
accordance with the rules and procedures of the American Arbitration
Association.
REPORTS TO PARTICIPANTS. Participants will receive a report containing
information regarding the amount and status of their awards at least once a
year. Participants may request additional Plan information and information
regarding its administrators by writing to Travelers Property Casualty Corp.,
Attention: Corporate Compensation Department, One Tower Square, Hartford,
Connecticut 06183, telephone number (860) 277-3422.
AUTHORIZED SHARES. The number of shares of Common Stock which may be issued
under the Plan shall be equal to one million (1,000,000) shares. Such shares
shall be previously issued shares reacquired by the Company. (Reacquired shares
may consist of shares purchased in open market transactions or otherwise). The
total number of shares of Common Stock reserved under the Plan may be adjusted
upward or downward as the Committee in its discretion may determine, in the
event of any stock dividend, recapitalization, stock split or other capital
adjustment or transaction materially affecting the Common Stock. Under the
current terms of the Plan, if Restricted Agency Stock issued under the Plan is
forfeited prior to the end of the Restricted Period such shares will be
available for future issuances.
AWARD AGREEMENTS AND STOCK CERTIFICATES. Unless the Committee determines
otherwise, a Participant will not have any rights with respect to an award of
Restricted Agency Stock unless or until such Participant has executed an
agreement evidencing the award in form and substance satisfactory to the
Committee (a "Restricted Agency Stock Award Agreement") and has delivered a
fully executed copy thereof to the Company. Each certificate, if any,
registered in the name of a Participant shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the award
of Restricted Agency Stock. The Company may, instead of issuing a stock
certificate evidencing Restricted Agency Stock, make a book entry (i.e., a
computerized or manual entry) in its records to evidence an award. The
Company's book entry system consists of a computerized tracking system which
keeps records of, among others, awards, transactions, elections and proxy
mailings. Such Company records shall, absent manifest error, be binding on
the Participants. In such a case, a certificate would then be issued at the
time the restrictions lapse. After the restrictions lapse, the Participant
may instead of receiving all of the Common Stock direct the Company in
writing to issue certificates to particular Producers or credit the brokerage
accounts of such specified Producers at Smith Barney Inc. with all or a
portion of the Common Stock; provided, however, that neither the Company nor
any of its Subsidiaries or affiliates shall have any liability to any Agency
or Producer with respect to such issuance.
Each Eligible Agency that is awarded Agency Stock will be issued a stock
certificate in respect of such shares of Agency Stock or may have the shares
credited to the Eligible Agency's account at Smith Barney Inc. The Eligible
Agency may direct the Company in writing to issue all or a portion of such
shares of Agency Stock in the name or to the brokerage account of its specified
Producers; provided, however, that neither the Company nor any of its
Subsidiaries or affiliates shall have any liability to any Agency or Producer
with respect to such issuance.
In the event an Eligible Agency is awarded Agency Stock that is subject to
sale or other restrictions, unless the Committee determines otherwise, the
Eligible Agency that is granted the award that
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is so subject shall not have any rights with respect to such award of Agency
Stock unless or until such Agency has executed an agreement evidencing the
award in form and substance satisfactory to the Committee (an "Agency Stock
Award Agreement") and has delivered a fully executed copy thereof to the
Company. In the event an Eligible Agency is awarded Agency Stock that is
subject to sale or other restrictions, the certificate registered in the name
of the Eligible Agency shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such award.
The Committee shall require that any stock certificate issued in the name of
an Eligible Agency evidencing shares of Restricted Agency Stock or shares of
Agency Stock that are subject to sale or other restrictions be held in the
custody of the Company until the restrictions thereon shall have lapsed, and
that, as a condition of such issuance of a certificate, the Eligible Agency
shall have delivered a stock power, endorsed in blank, relating to the shares
covered by such certificate.
RELATIONSHIP AMONG THE COMPANY, THE INSURANCE COMPANIES, THE AGENCY AND THE
PRODUCER
Each Restricted Agency Stock Award Agreement and Agency Stock Award
Agreement, if any (together, the "Award Agreements"), is entered into by the
Agency and the Company, and the Agency's Producers are not a party to it. Any
arrangements or undertakings entered into between an Agency and such Agency's
Producers establish rights and obligations solely between and among such
parties and do not create any obligations on the part of or bind the Company
or any of its Subsidiaries or affiliates, which shall have no liability
thereunder. The Producers must look to the Agencies, and not to the Company
or any of its Subsidiaries or affiliates, for the benefit of any obligations
the Agencies may have undertaken pursuant to any arrangement and the
Producers bear all risk with respect to the fulfillment by the Agencies of
such obligations. The Plan and the Award Agreements are for the protection
and benefit of the Company and the Eligible Agencies and no other person
shall be a direct or indirect beneficiary of or have any direct or indirect
cause of action or claim in connection therewith.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal United States federal
income tax consequences of transactions between the Company and Participants and
recipients of Agency Stock under the Plan, based on current United States
federal income tax laws. This summary is not intended to be exhaustive, does not
constitute tax advice and, among other things, does not describe state, local or
foreign tax consequences. PARTICIPANTS IN THE PLAN AND RECIPIENTS OF AGENCY
STOCK ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE UNITED
STATES FEDERAL, STATE, LOCAL, INTERNATIONAL, PROVINCIAL AND OTHER TAX
CONSEQUENCES OF TRANSACTIONS UNDER THE PLAN.
RESTRICTED AGENCY STOCK. Generally, a Participant must include in
ordinary income an amount equal to the fair market value of the Restricted
Agency Stock at the time such Restricted Agency Stock is no longer subject to
a substantial risk of forfeiture within the meaning of Section 83 of the
Code. Restricted Agency Stock is no longer subject to a substantial risk of
forfeiture upon the expiration of the Restricted Period, including extensions
granted, as described above. In any instance where Restricted Agency Stock is
forfeited, the forfeiture does not give rise to the recognition of income or
loss. Any tax or other amount will be withheld as required on the amount of
any income attributable to the Restricted Agency Stock. A Participant may
elect pursuant to Section 83(b) of the Code (a "Section 83(b) election") to
include as income in the year the Restricted Agency Stock is transferred by
the Company to such Participant (i.e., the year of the award) an amount equal
to the fair market value of the Restricted Agency Stock on the date of such
transfer (as if the Restricted Agency Stock were unrestricted and could be
sold or transferred immediately). If the stock subject to the Section 83(b)
election is subsequently forfeited, no
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deduction or tax refund is allowed for the amountincluded as income as a
result of the Section 83(b) election. A Section 83(b) election must be made
within thirty (30) days of the date of such transfer.
A Participant's tax basis in Restricted Agency Stock will be equal to the
amount of ordinary income recognized by such Participant with respect to such
Restricted Agency Stock. Upon the sale of shares after the expiration of the
Restricted Period, a Participant will generally recognize gain or loss which
will be capital gain or loss if the Restricted Agency Stock has been held as a
capital asset; such capital gain or loss will be treated as long-term if the
stock sold was held for more than one (1) year. The holding period for capital
gains treatment will begin when the Restricted Period expires, unless the
Participant has made a Section 83(b) election, in which event the holding period
will commence on the date of transfer of the Restricted Agency Stock by the
Company to such Participant.
The Company generally will be entitled to a deduction in the amount of a
Participant's ordinary income at the time such income is recognized as described
above.
DIVIDENDS. Dividends paid on shares of Restricted Agency Stock during
the Restricted Period are taxable as compensation to the Participant. The
Company will be entitled to a deduction with respect to such dividends.
However, dividends paid on shares of Restricted Agency Stock subject to a
Section 83(b) election or subsequent to the expiration of the Restricted
Period are taxed as dividend income, rather than compensation, and are not
subject to withholding requirements. The Company will not be entitled to a
deduction with respect to these dividends.
AGENCY STOCK. Generally, a recipient of Agency Stock must include in
ordinary income an amount equal to the fair market value of the Agency Stock
in the year that such Agency Stock is transferred to the recipient. Agency
Stock will have a tax basis equal to the ordinary income recognized on the
date such Agency Stock is transferred to the recipient; in addition, the
holding period for determining capital gains will commence on the date that
such Agency Stock is transferred to the recipient. Upon the sale of Agency
Stock by the recipient, the recipient will generally recognize gain or loss,
which will be capital gain or loss if the recipient has held the Agency Stock
as a capital asset; such capital gain or loss will be treated as long-term if
the stock was held for more than one (1) year. Dividends paid to the
recipient on Agency Stock are taxable as dividend income in the year received.
Generally, the Company will be entitled to a deduction in the amount of
ordinary income recognized by the recipient of Agency Stock at the time such
income is recognized as described above. The Company will not be entitled to
a deduction with respect to dividends paid on Agency Stock.
CHANGE OF CONTROL
Upon the occurrence of certain events which constitute a "Change of
Control," as defined in the Plan (unless approved by two-thirds (2/3) of the
continuing Directors, as therein defined), the restrictions on each award of
Restricted Agency Stock and Agency Stock (if any) shall immediately lapse.
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AMENDMENTS TO OR DISCONTINUANCE OF THE PLAN
The Board, without the approval of the Company's stockholders or the
Eligible Agencies, may at any time terminate, amend or modify the Plan, provided
that no such action may, without an Eligible Agency's consent, adversely affect
Restricted Agency Stock previously issued to such Eligible Agency.
LEGAL MATTERS
The validity of the Common Stock is being passed upon for the Company by
James M. Michener, Esq., General Counsel of the Company, Travelers Property
Casualty Corp., One Tower Square, Hartford, Connecticut 06183. Mr. Michener,
Senior Vice President, General Counsel and Secretary of the Company,
beneficially owns, or has rights to acquire under the Company's employee benefit
plans, an aggregate of less than 1% of the Company's Common Stock.
EXPERTS
The consolidated financial statements and financial statement schedules of
Travelers Property Casualty Corp. and its subsidiaries as of December 31, 1996
and 1995, and for each of the years in the three-year period ended December 31,
1996, included or incorporated by reference in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996, have been incorporated by
reference herein, in reliance upon the reports (also incorporated by reference
herein) of KPMG Peat Marwick LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing.
The combined financial statements of The Aetna Casualty and Surety Company
and The Standard Fire Insurance Company and their subsidiaries as of December
31, 1995 and 1994, and for each of the years in the three-year period ended
December 31, 1995, incorporated by reference in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996, have been incorporated by
reference herein, in reliance upon the reports (also incorporated by reference
herein) of KPMG Peat Marwick LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing.
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ANNEX A
TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN
as of July 1, 1997
SECTION 1. PURPOSE OF THE PLAN.
The name of this plan is TRAVELERS PROPERTY CASUALTY CORP. AGENCY CAPITAL
ACCUMULATION PLAN (the "Plan"). The purpose of the Plan is to enable TRAVELERS
PROPERTY CASUALTY CORP., a Delaware corporation (the "Company"), and its
Subsidiaries to attract, retain and motivate Agencies (as hereinafter defined),
to compensate them for their contributions to the growth and profits of the
Company and to encourage ownership of Class A common stock, par value $.01 per
share (the "Common Stock"), of the Company on the part of such Agencies. The
Plan provides incentives to participating Agencies which are linked directly to
increases in stockholder value and will therefore inure to the benefit of all
stockholders of the Company.
SECTION 2. DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "AGENCIES" means independent property-casualty insurance agencies
appointed by the Insurance Companies to represent the Insurance Companies
in the sale of insurance or otherwise.
(b) "AGENCY STOCK" means shares of Common Stock awarded pursuant to
Section 6.
(c) "AGENCY STOCK AWARD AGREEMENT" shall have the meaning ascribed to such
term in Section 6(c).
(d) "ANNUAL PREMIUM" with respect to any given year means the annual
written property-casualty premium (Eligible Premium or Eligible Net Written
Premium) (as defined in the Agency Performance Plus Agreements) between a
Participant and any of the Insurance Companies.
(e) "BASE YEAR" shall have the meaning ascribed to such term in Section
3(a).
(f) "BOARD" means the Board of Directors of the Company.
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(g) "CAUSE" means conduct by a Participant that materially breaches such
Participant's agreement with the Insurance Companies or that is
demonstrably injurious to the Company or a Subsidiary, monetarily or
otherwise, which conduct shall include, but not be limited to (i)
disclosing or misusing any confidential information pertaining to the
Company or a Subsidiary or (ii) disparaging the Company, any Subsidiary or
any of their respective officers or directors. The determination of
whether any conduct, action or failure to act constitutes "Cause" shall be
made by the Committee in its discretion.
(h) "COMMITTEE" means the Nominations, Compensation and Corporate
Governance Committee of the Board or any subcommittee thereof or such other
committee as may be appointed by the Board from time to time.
(i) "COMMON STOCK" shall have the meaning ascribed to such term in Section
1.
(j) "COMPANY" shall have the meaning ascribed to such term in Section 1.
(k) "ELIGIBLE AGENCIES" shall have the meaning ascribed to such term in
Section 3(a).
(l) "INSURANCE COMPANIES" means The Travelers Indemnity Company, Travelers
Casualty and Surety Company and The Standard Fire Insurance Company and
their respective property-casualty subsidiaries and affiliates.
(m) "LINE" means a line of business such as Commercial Lines, Personal
Lines or Bond.
(n) "PARTICIPANT" means an Eligible Agency that elects to participate in
the Plan.
(o) "PERFORMANCE PLUS" means the Performance Plus Payment described in the
Bond and Commercial Lines Performance Plus Agreements and/or the
Participation Payment described in the Personal Lines Performance Plus
Agreement.
(p) "PLAN" shall have the meaning ascribed to such term in Section 1.
(q) "PRODUCER" means, with respect to any Agency, a property-casualty
insurance sales agent who is a principal or employee of such Agency.
(r) "RESTRICTED AGENCY STOCK AWARD AGREEMENT" shall have the meaning
ascribed to such term in Section 5(b).
(s) "RESTRICTED PERIOD" means the three-year period (or such other period
determined by the Committee) together with any extension thereof approved
pursuant to the Plan, commencing on the date of an award of Restricted
Agency Stock; provided,
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however, that for awards made in respect of the 1997 performance year, the
Restricted Period means the two-year period (or such other period determined
by the Committee) together with any extension thereof approved pursuant to
the Plan, commencing on the date of an award.
(t) "RESTRICTED AGENCY STOCK" means shares of Common Stock that are
subject to the restrictions and potential forfeiture set forth in Section
5.
(u) "SUBSIDIARY" means any entity at least one-half of whose outstanding
voting stock, or beneficial ownership for entities other than corporations,
is owned, directly or indirectly, by the Company, or which is otherwise
controlled directly or indirectly by the Company.
SECTION 3. ELIGIBILITY AND PARTICIPATION.
(a) RESTRICTED AGENCY STOCK. Agencies that earn the minimum Performance
Plus and are selected from time to time by the Committee, in its discretion
("Eligible Agencies"), shall be eligible to participate in the Plan and receive
one or more awards of Restricted Agency Stock. The minimum Performance Plus
that must be earned for the calendar year for which such Performance Plus is
earned (the "Base Year") before a Restricted Agency Stock award can be elected
is currently $5,000 in respect of the Line to which such Performance Plus
relates, but the Committee may, in its discretion, provide for alternative
minimum Performance Plus that must be earned. Commercial Lines, Personal Lines
and Bond are not aggregated for this purpose.
(b) AGENCY STOCK. Eligible Agencies that are selected from time to time
by the Committee, in its discretion, shall be eligible to receive one or more
awards of Agency Stock under the Plan.
SECTION 4. AMOUNT AND FORM OF AWARDS.
(a) RESTRICTED AGENCY STOCK. Eligible Agencies that make a timely
election may be awarded Restricted Agency Stock in such amounts as are described
below. For Eligible Agencies electing to participate, unless otherwise
determined by the Committee, the amount of any award of Restricted Agency Stock
that may be elected shall be not less than an amount equal to 10% of Performance
Plus and not more than an amount equal to 50% of Performance Plus; provided,
that any such election and award shall be separately determined with respect to
Performance Plus for each of Commercial Lines, Personal Lines and Bond. An
election to receive Restricted Agency Stock shall be of no force and effect
unless made in accordance with the administrative procedures established by the
Committee from time to time, including, without limitation, timely receipt by
the Company of an annual election form from the Eligible Agency. Awards of
Restricted Agency Stock shall be granted at such time as the Committee may in
its discretion determine, and the Committee may also in its discretion provide
for alternative
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methods for grants of awards. Awards of Restricted Agency Stock will be made
in lieu of cash payment of a percentage of the Participant's Performance Plus.
(b) AGENCY STOCK. Eligible Agencies that are selected by the Committee
pursuant to Section 3(b) may be awarded Agency Stock in such amounts as are
determined by the Committee in its discretion. Awards of Agency Stock shall be
granted to those Eligible Agencies (which need not be Participants under the
Plan) at such time as the Committee may in its discretion determine, without the
making of any election on the part of the recipient. Awards of Agency Stock
will be in addition to any cash or other compensation, including awards of
Restricted Agency Stock, if any, otherwise payable to the Eligible Agency
selected to receive such award.
(c) The number of shares of Common Stock which may be issued under the
Plan, either as Restricted Agency Stock or Agency Stock, shall be equal to one
million (1,000,000) shares of Common Stock, subject to adjustment as provided in
Section 8. The shares issued hereunder shall be previously issued shares
reacquired by the Company. In the event Restricted Agency Stock is forfeited
prior to the end of the Restricted Period, the shares of Common Stock called for
by such award of Restricted Agency Stock will become available for future
awards.
SECTION 5. RESTRICTED AGENCY STOCK.
(a) The number of shares of Restricted Agency Stock awarded to a
Participant under the Plan shall be determined by a formula or formulas approved
by the Committee, which will take into account elections made under the Plan.
In order to reflect the impact of the restrictions on the value of the
Restricted Agency Stock, as well as the possibility of forfeiture of the
Restricted Agency Stock, the fair market value of Common Stock shall be
discounted at 25% in determining the number of shares of Restricted Agency
Stock to be awarded. The Committee may, where it deems appropriate, and in its
discretion, provide for an alternative discount rate. For purposes of this
Plan, the fair market value of Common Stock for an award will be the average of
the Common Stock's closing prices on the Composite Tape of the New York Stock
Exchange, Inc. for the five (5) trading days prior to the date of the award.
The dollar value of an award will be divided by the discounted market value to
determine the number of shares of Restricted Agency Stock in an award. The
value of fractional shares will be paid currently in cash. In the event the
Committee provides for alternative methods for grants of awards, the Committee
may, in its discretion, provide for alternative methods of determining the fair
market value of the Common Stock for such awards, and may also provide for
alternative forfeiture provisions. In the event there is an adjustment to the
Performance Plus after the date of an award of Restricted Agency Stock under
the Plan, the Company may pay the adjustment amount entirely in cash.
(b) Unless the Committee determines otherwise, a Participant will not
have any rights with respect to an award of Restricted Agency Stock unless or
until such Participant has executed an agreement evidencing the award in form
and substance satisfactory to the Committee (a "Restricted Agency Stock Award
Agreement") and has delivered a fully executed copy thereof to the Company.
Each Participant that is awarded Restricted Agency Stock may, but need not,
be issued a stock certificate in respect of such shares
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of Restricted Agency Stock. In the event a certificate is not issued in the
name of a Participant, a "book entry" (i.e., a computerized or manual entry)
will be made in the records of the Company to evidence the award of shares of
Restricted Agency Stock to such Participant. Such Company records shall,
absent manifest error, be binding on the Participants. Each certificate, if
any, registered in the name of a Participant shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such award,
substantially in the following form:
"The transferability of the certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of
the Travelers Property Casualty Corp. Agency Capital Accumulation Plan and
a Restricted Agency Stock Award Agreement entered into between the
registered owner and Travelers Property Casualty Corp. Copies of such Plan
and Agreement are on file in the offices of Travelers Property Casualty
Corp."
Any stock certificate issued in the name of a Participant evidencing shares
of Restricted Agency Stock will be held in the custody of the Company until the
restrictions thereon shall have lapsed, and, as a condition of such issuance of
a certificate for Restricted Agency Stock, the Participant shall have delivered
a stock power, endorsed in blank, relating to the shares covered by such
certificate.
(c) The shares of Restricted Agency Stock awarded pursuant to this Section
5 shall be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the Restricted Agency
Stock Award Agreements, during the Restricted Period the Participant shall
not be permitted to sell, transfer, pledge or assign shares of Restricted
Agency Stock awarded under the Plan. The foregoing shall not prohibit a
Participant from entering into agreements with its Producers, if any, with
respect to rights and obligations associated with the Restricted Agency
Stock; provided, however, that Producers shall have no rights hereunder and
neither the Company nor any of its Subsidiaries or affiliates shall have
any liability thereunder or with respect thereto. The Committee may, in
its discretion, (x) initially provide for an alternative Restricted Period
or alter the Restricted Period for a previously granted award (provided
that the Committee may not extend the Restricted Period for a previously
granted award without the Participant's written consent), (y) during any
extension of such Restricted Period, provide for alternative restrictions
and (z) provide for the lapse of any such restrictions in installments and
accelerate or waive any such restrictions in whole or in part based on such
factors and such circumstances as the Committee may determine, in its
discretion.
(ii) Unless the Committee in its discretion shall determine otherwise
at or prior to the time of the grant of any award, the Participant shall
have the right to direct the vote of its shares of Restricted Agency Stock
during the Restricted Period, in accordance with paragraph (e) of this
Section 5. The Participant shall have the right during the Restricted
Period to receive any
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regular dividends or dividend equivalents on such shares of Restricted
Agency Stock. The Committee shall in its discretion determine the
Participant's rights with respect to extraordinary dividends or
distributions on the shares of Restricted Agency Stock.
(iii) Shares of Common Stock shall be delivered to the Participant
either in certificate form or by crediting the Participant's brokerage
account at Smith Barney Inc. promptly after, and only after, the Restricted
Period has expired (or such earlier time as the restrictions may lapse in
accordance with paragraph (c)(i) of this Section 5) so long as there has
been no event resulting in forfeiture of such award of Restricted Agency
Stock. After the restrictions lapse, the Participant may instead of
receiving all of the Common Stock direct the Company in writing to issue
certificates to particular Producers or credit the brokerage accounts of
such specified Producers at Smith Barney Inc. with all or a portion of the
Common Stock; provided, however, that neither the Company nor any of its
Subsidiaries or affiliates shall have any liability to any Agency or
Producer with respect to such issuance.
(d) Subject to the provisions of paragraph (c)(i) of this Section 5, the
following provisions shall apply to a Participant's shares of Restricted Agency
Stock prior to the end of the Restricted Period (including extensions):
Each award of Restricted Agency Stock shall be subject to forfeiture based
upon a separate determination of performance in respect of the Line in
which the award was originally granted. In the event that in any of the
calendar years during the Restricted Period immediately following the Base
Year such Participant's Annual Premium with the Company and the Insurance
Companies is reduced by 50% or more in Commercial Lines, Personal Lines or
Bond compared to such Participant's Annual Premium (in the applicable Line)
with the Company and such Insurance Companies in the Base Year (as
adjusted, if applicable, as provided below), such Participant will forfeit
all Restricted Agency Stock awarded with respect to such Base Year related
to the Line in which the Annual Premium was reduced. Forfeiture
determinations will be made separately for each award with reference to the
applicable Base Year and Line for that award. In addition, unless the
Committee in its discretion shall determine otherwise, failure by a
Participant to maintain its agency agreement with the Insurance Companies
throughout the Restricted Period will result in forfeiture of all
Restricted Agency Stock previously awarded to such Participant. Upon
forfeiture, the Participant will have no further rights in the Restricted
Agency Stock or the Performance Plus in respect of which the Restricted
Agency Stock was awarded. The determination of whether there is a
reduction in Annual Premiums in any given year compared to the applicable
Base Year resulting in forfeiture will be based on Annual Premiums in the
Line in which the Restricted Agency Stock was awarded, and will be made by
the Committee, in its discretion. In the event any reduction in Annual
Premiums resulting in forfeiture is the result of the Insurance Companies
terminating the Participant's appointment other than for Cause, the
restrictions on all
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Restricted Agency Stock previously awarded to such Participant in respect
of the Line for which the appointment was terminated will immediately
lapse. In the event any reduction in Annual Premiums resulting
in forfeiture is the result of the Insurance Companies withdrawing
from a Commercial Lines, Personal Lines or Bond market or product that
is material to a Participant, all determinations of forfeiture with
respect to such Participant under this Section 5 shall be recalculated and
the Participant's Base Year Annual Premium in the applicable Line reduced
by the percentage of the reduction in Annual Premium that was attributable
to the withdrawal; provided, however, that if the reduction is 90% or
more, the restrictions on all Restricted Agency Stock previously awarded
to such Participant in respect of the Line in which the Annual Premium
was so reduced will immediately lapse. For these purposes, (i) whether a
"withdrawal" has occurred will be a determination made by the Committee in
its discretion and (ii) "material" shall be deemed to be 10% of that
Participant's Annual Premium writings with the Insurance Companies with
respect to the Line in which the Annual Premium was reduced; provided,
however, that the Committee shall have discretion to deem any other
circumstances or event to be a material withdrawal.
(e) Unless the Committee in its discretion shall determine otherwise at or
prior to the time of the grant of any award of Restricted Agency Stock, during
the Restricted Period the shares of Restricted Agency Stock shall be voted by
the Company's senior administrative officer in charge of administering the Plan,
or such other person as the Committee may designate (the "Plan Administrator"),
and the Plan Administrator shall vote such shares in accordance with
instructions received from Participants. Shares as to which no instructions are
received shall be voted by the Plan Administrator proportionately in accordance
with instructions received from Participants in the Plan.
SECTION 6. AGENCY STOCK.
(a) The number of shares of Agency Stock awarded to an Eligible Agency
under the Plan may be determined by a formula or formulas approved by the
Committee or may be determined by the Committee individually on a case by
case basis. Shares of Agency Stock awarded to Eligible Agencies pursuant to
the Plan will generally not be subject to the restrictions or conditions set
forth in Section 5; provided, however, that if the Committee so determines,
such shares may be subject to sale or other restrictions.
(b) Each Eligible Agency that is awarded Agency Stock shall be issued a
stock certificate in respect of such shares of Agency Stock or may have the
shares credited to the Eligible Agency's account at Smith Barney Inc. The
Eligible Agency may direct the Company in writing to issue all or a portion of
such shares of Agency Stock in the name or to the brokerage account of its
specified Producers; provided, however, that neither the Company nor any of its
Subsidiaries or affiliates shall have any liability to any Agency or Producer
with respect to such issuance.
(c) If the Committee determines to subject any shares of Agency Stock to
sale or other restrictions, unless the Committee determines otherwise, the
Eligible Agency that is granted the award that is so subject shall not have
any rights with respect to such award of Agency Stock unless or until such
Agency has executed an agreement evidencing the award in form and substance
satisfactory to the Committee (an "Agency Stock Award Agreement") and has
delivered a fully executed copy thereof to the Company. In the event an
Eligible Agency is awarded Agency Stock that is subject to sale or other
restrictions, the certificate registered in the name of the Eligible Agency
shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such award.
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The Committee shall require that any stock certificate issued in the name of
an Eligible Agency evidencing shares of Agency Stock that are subject to sale
or other restrictions be held in the custody of the Company until the
restrictions thereon shall have lapsed, and that, as a condition of such
issuance of a certificate for Agency Stock, the Eligible Agency shall have
delivered a stock power, endorsed in blank, relating to the shares covered by
such certificate.
SECTION 7. ADMINISTRATION.
The Plan shall be administered by the Committee.
The Committee shall have the power and authority to make awards of
Restricted Agency Stock and Agency Stock pursuant to the terms of the Plan.
In particular, the Committee shall have the authority:
(a) to select those Agencies that are Eligible Agencies;
(b) to determine the minimum Performance Plus that must be earned before a
Restricted Agency Stock award can be elected hereunder;
(c) to determine whether and to what extent Restricted Agency Stock is to
be granted to Eligible Agencies hereunder;
(d) to determine the minimum and maximum percentage of Performance Plus
payable in Restricted Agency Stock that can be elected hereunder;
(e) to select those Eligible Agencies that are to receive Agency Stock
hereunder;
(f) to determine whether and to what extent Agency Stock is to be granted
to Eligible Agencies hereunder;
(g) to determine the number of shares of Common Stock to be covered by
each award granted hereunder;
(h) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder; and
(i) to determine the terms and conditions, not inconsistent with the terms
of the Plan, which shall govern all written instructions evidencing the
Restricted Agency Stock and Agency Stock.
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The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan; and to otherwise
supervise the administration of the Plan. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company, Eligible Agencies and the
Participants. The Committee may delegate some or all of its authority over
the administration of the Plan to any other persons or a committee.
SECTION 8. ADJUSTMENTS UPON A CHANGE IN COMMON STOCK.
In the event of any change in the outstanding Common Stock of the Company
by reason of any stock split, stock dividend, distribution, recapitalization,
merger, consolidation, reorganization, combination or exchange of shares or
other similar event if in the determination of the Committee such change
equitably requires an adjustment in the number or kind of shares that may be
issued under the Plan pursuant to Section 4(c), such adjustment shall be made
by the Committee and shall be conclusive and binding for all purposes of the
Plan.
SECTION 9. AMENDMENT AND TERMINATION.
The Plan may be amended or terminated at any time and from time to time by
the Board. Neither an amendment to the Plan nor the termination of the Plan
shall adversely affect any right of any Eligible Agency with respect to any
Restricted Agency Stock or Agency Stock theretofore granted without such
Eligible Agency's written consent. Subject to the foregoing limitations, the
Committee shall have the authority to amend certain Plan provisions to the
extent necessary to permit participation in the Plan by Agencies that are
located outside of the United States on terms and conditions which are
comparable to those afforded to Agencies located within the United States.
SECTION 10. GENERAL PROVISIONS.
(a) All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any Agency any right to continue to represent the Insurance
Companies in the sale of insurance or otherwise, as the case may be, nor shall
it interfere in any way with the right of the Company or any of the Insurance
Companies to terminate the agency relationship with any of its Agencies at any
time. Nothing contained herein
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is intended or shall be construed to modify or supersede the terms of any
existing contracts between an Agency and the Insurance Companies, including
but not limited to any agency agreement, any profit sharing or performance
plus agreement or any agency benefits agreement.
(c) No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan.
(d) An Eligible Agency's rights and interest under the Plan may not be
assigned or transferred in whole or in part either directly or by operation of
law or otherwise including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner and no such
right or interest of any Eligible Agency in the Plan shall be subject to any
obligation or liability of such Eligible Agency. Notwithstanding the foregoing,
a Participant may designate a successor in interest to its rights and interest
under the Plan if such successor is an Eligible Agency or is designated by the
Committee as an Eligible Agency and agrees to all of the terms hereof, subject
to the Committee's consent.
(e) The Company and its Subsidiaries shall have the right to deduct from
any payment made under the Plan any federal, state or local income taxes or
other amounts required by law to be withheld with respect to such payment.
It shall be a condition to the obligation of the Company to issue Common
Stock upon the lapse of restrictions on Restricted Agency Stock or upon the
grant of an award of Agency Stock that the Eligible Agency pay to the
Company, upon its demand, such amount as may be requested by the Company for
the purpose of satisfying any liability to withhold federal, state or local
income taxes or other amounts. If the amount requested is not paid, the
Company may refuse to issue shares.
(f) Notwithstanding anything to the contrary contained herein, upon a
"Change of Control" (defined below), the restrictions on each award of
Restricted Agency Stock and Agency Stock (if any) shall immediately lapse.
"Change of Control" shall mean the occurrence of any of the following, unless
such occurrence shall have been approved or ratified by at least a two-thirds
(2/3) vote of the Continuing Directors (defined below): (A) any person within
the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than Travelers Group Inc. or any
affiliates thereof, shall have become the beneficial owner, within the
meaning of Rule 13d-3 under the Exchange Act, of shares of stock of the
Company having twenty five percent (25%) or more of the total number of votes
that may be cast for election of the directors of the Company, or (B) there
shall have been a change in the composition of the Board such that at any
time a majority of the Board shall have been members of the Board for less
than twenty-four (24) months, unless the election of each new director who
was not a director at the beginning of the period was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who were
directors at the
A-10
<PAGE>
beginning of such period, or who were approved as directors pursuant to the
provisions of this paragraph (the "Continuing Directors").
(g) All claims and disputes between an Agency and the Company or any of
the Insurance Companies arising out of the Plan or any award granted hereunder
shall be submitted to arbitration in accordance with the rules and procedures of
the American Arbitration Association. Notice of demand for arbitration shall be
given in writing to the other party and shall be made within a reasonable time
after the claim or dispute has arisen. The award rendered by the arbitrator
shall be made in accordance with the Plan, shall be final, and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof. The provisions of this Section 10(g) shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.
(h) The validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the State of Delaware.
(i) No Common Stock or other securities shall be issued hereunder unless
counsel for the Company shall be satisfied that such issuance will be in
compliance with all applicable federal, state and international securities
statutes, rules and regulations. The appropriate officers of the Company or its
Subsidiaries shall cause to be filed any reports, returns or other information
regarding awards or Common Stock issued under the Plan as may be required by
Section 13 or 15(d) of the Exchange Act or any other applicable statute, rule or
regulation.
(j) If any term or provision of this Plan or the application thereof to
any person or circumstances shall, to any extent, be invalid or unenforceable,
then the remainder of the Plan, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision hereof
shall be valid and be enforced to the fullest extent permitted by applicable
law.
(k) Each Restricted Agency Stock Award Agreement and Agency Stock Award
Agreement, if any (together, the "Award Agreements"), is entered into by the
Agency and the Company, and the Agency's Producers are not a party to it and
have no rights thereunder or hereunder. Any arrangements or undertakings
entered into between an Agency and such Agency's Producers establish rights
and obligations solely between and among such parties and do not create any
obligations on the part of or bind the Company or any of its Subsidiaries or
affiliates, which shall have no liability thereunder. The Producers must
look to the Agencies, and not to the Company or any of its Subsidiaries or
affiliates, for the benefit of any obligations the Agencies may have
undertaken pursuant to any arrangement and the Producers bear all risk with
respect to the fulfillment by the Agencies of such obligations. This Plan
and the Award Agreements are for the protection and benefit of the Company
and the Eligible Agencies and no other person shall be a direct or indirect
beneficiary of or have any direct or indirect cause of action or claim in
connection therewith.
A-11
<PAGE>
SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on July 1, 1997. The Plan shall remain
effective until terminated by the Board in accordance with Section 9.
A-12
<PAGE>
- ------------------------------------------ ----------------------------------
TRAVELERS PROPERTY
CASUALTY CORP.
No dealer, salesperson or other
person is authorized in connection
with any offering made hereby to give
any information or to make any other
representation not contained in this
Prospectus, and, if given or made,
such information or representations
must not be relief upon as having
been authorized by the Company. This
Prospectus does not constitute an
offer to sell or a solicitation of an
offer to buy any security other than
the securities offered hereby, nor
does it constitute an offer to sell
or a solicitation of an offer to buy
any of the securities offered hereby
to any person in any jurisdiction in
which it is unlawful to make such an
offer or solicitation to such person.
Neither the delivery of this
Prospectus nor any sale made
hereunder shall under any
circumstances create any implication
that the information contained or
incorporated by reference herein is
correct as of any date subsequent to
the date hereof.
------------------------
-----------------
TABLE OF CONTENTS PROSPECTUS
----------------- -----------------
PAGE
----
Available Information................ 2
Incorporation of Certain Documents
by Reference....................... 3
Use of Proceeds...................... 3
Travelers Property Casualty Corp.
Agency Capital Accumulation Plan... 4
Legal Matters........................ 11
Experts.............................. 11 TRAVELERS PROPERTY CASUALTY
Annex A.............................. A-1 CORP. AGENCY CAPITAL
ACCUMULATION PLAN
- ------------------------------------------- --------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth estimated expenses to be incurred in
connection with the distribution of the securities being registered hereby, all
of which shall be borne by the Company:
Commission Registration Fees.............. $11,648
Printing and Engraving Expenses........... 25,000
Accounting Fees and Expenses.............. 4,000
Blue Sky Fees and Expenses................ 3,000
Miscellaneous............................. 6,352
---------
Total..................................... $50,000
---------
---------
Except for the Commission registration fee, all of the
foregoing are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the Delaware General Corporation Law
("DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that
such person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
II-1
<PAGE>
Section 145 further provides that to the extent a director or officer of
a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; that indemnification provided
for by Section 145 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such person's heirs,
executors and administrators; and empowers the corporation to purchase and
maintain insurance on behalf of a director or officer of the corporation
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities
under Section 145. Section 3 of Article V of the Company's Restated By-Laws
provides that the Company shall indemnify its directors and officers to the
fullest extent permitted by the DGCL.
Travelers Group Inc. also provides liability insurance for its directors and
officers and the directors and officers of its subsidiaries, including the
Company, which provides for coverage against loss from claims made against
directors and officers in their capacity as such, including liabilities under
the Securities Act of 1933, as amended.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from
which the director derived an improper personal benefit. Article TWELFTH of the
Company's Restated Certificate of Incorporation limits the liability of
directors to the fullest extent permitted by Section 102(b)(7).
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- --------- -----------
5.1 Opinion of James M. Michener, Esq. with respect to the legality of
the securities being registered
23.1 Consent of James M. Michener, Esq. (included in his opinion filed
as Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney of certain directors of the Company
99.1 Travelers Property Casualty Corp. Agency Capital Accumulation Plan
(as of July 1, 1997)
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore,
II-3
<PAGE>
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Travelers Property Casualty Corp. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hartford, State of
Connecticut, this 27th day of June, 1997.
TRAVELERS PROPERTY CASUALTY CORP.
BY: /S/ Robert I. Lipp
-----------------------------------------
Robert I. Lipp
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on this 27th day of June, 1997.
SIGNATURE TITLE
--------- -------
Chairman of the Board, President and Chief
/s/ Robert I. Lipp Executive Officer (Principal Executive
- ------------------------------ Officer) and Director
Robert I. Lipp
/s/ William P. Hannon Chief Financial Officer (Principal Financial
- ------------------------------ Officer)
William P. Hannon
/s/ Thomas P. Shugrue Vice President and Chief Accounting Officer
- ------------------------------ (Principal Accounting Officer)
Thomas P. Shugrue
*
- ------------------------------- Director
Kenneth J. Bialkin
- ------------------------------ Director
John J. Byrne
II-5
<PAGE>
SIGNATURE TITLE
--------- -------
*
- ------------------------------- Director
James Dimon
*
- ------------------------------- Director
Dudley C. Mecum
*
- ------------------------------- Director
Roberto G. Mendoza
*
- ------------------------------- Director
Frank J. Tasco
*
- ------------------------------- Director
Sanford I. Weill
*
- ------------------------------- Director
Arthur Zankel
*By: /s/ Jay S. Fishman
- -------------------------------
Jay S. Fishman
Attorney-in-fact
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
5.1 Opinion of James M. Michener, Esq. with respect to the legality of
the securities being registered
23.1 Consent of James M. Michener, Esq. (included in his opinion filed as
Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney of certain directors of the Company
99.1 Travelers Property Casualty Corp. Agency Capital Accumulation Plan
(as of July 1, 1997)
<PAGE>
Exhibit 5.1
June 27, 1997
Travelers Property Casualty Corp.
One Tower Square
Hartford, Connecticut 06183
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"). I
have acted as counsel to the Company in connection with the preparation and
filing of a Registration Statement on Form S-3 (the "Registration Statement")
under the Securities Act of 1933, as amended, for the registration of
1,000,000 shares of Class A Common Stock, $.01 par value per share (the
"Shares"), of the Company relating to the Travelers Property Casualty Corp.
Agency Capital Accumulation Plan (the "Plan").
In connection with the foregoing, I, or attorneys under my
supervision, have examined the minute books and stock records of the Company,
the Restated Certificate of Incorporation and Restated By-Laws of the
Company, the Registration Statement, the Plan and the resolutions duly
adopted by the Board of Directors of the Company relating to the Plan. In
addition, I, or attorneys under my supervision, have reviewed such other
documents and instruments and have conferred with various officers and
directors of the Company and have ascertained or verified to my satisfaction
such additional facts as I have deemed necessary or appropriate for the
purposes of this opinion. In such examination, I have assumed the legal
capacity or all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified, photostatic
or facsimile copies and the authenticity of the originals of such latter
documents.
Based upon the foregoing, I am of the opinion that the Shares to
be issued under the Plan have been duly authorized and, when issued and
delivered in accordance with the terms of the Plan, will be legally issued,
fully paid and nonassessable.
My opinion is limited to matters governed by the Federal laws of
the United States of America and the General Corporation Law of the State of
Delaware. I am not admitted to the practice of law in the State of Delaware.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to my name in the Prospectus
constituting a part of such Registration Statement under the heading "Legal
Matters." In giving such consent, I do not thereby admit that I come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ James M. Michener
James M. Michener
General Counsel
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Travelers Property Casualty Corp.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of our report on the consolidated financial statements of the
Travelers Property Casualty Corp. (the "Company") dated January 17, 1997, and
our report on the related financial statement schedules dated January 17,
1997, which are incorporated by reference or included in the 1996 Annual
Report on Form 10-K of the Company, and which is incorporated herein by
reference.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
June 25, 1997
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Aetna Services, Inc. (formerly "Aetna Life and Casualty Company"):
We consent to the incorporation by reference in the registration statement on
Form S-3 of Travelers Property Casualty Corp. (the "Company") of our report
on the combined financial statements of The Aetna Casualty and Surety Company
and The Standard Fire Insurance Company and their subsidiaries dated February
28, 1996, which are incorporated by reference in the 1996 Annual Report on
Form 10-K of the Company, and which is incorporated herein by reference. Our
report refers to a change to the methods of accounting for certain
investments in debt and equity securities, workers' compensation life table
indemnity reserves and retrospectively rated reinsurance contracts in 1993.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
June 25, 1997
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ Kenneth J. Bialkin
----------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ James Dimon
---------------
(Signature)
<PAGE>
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ Dudley C. Mecum
-------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ Roberto G. Mendoza
----------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ Frank J. Tasco
------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ Sanford I. Weill
--------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
Registration Statement on Form S-3
Travelers Property Casualty Corp.
Know All Men By These Presents, that the undersigned, a director of
Travelers Property Casualty Corp., a Delaware corporation (the "Company"),
does hereby constitute and appoint Robert I. Lipp, Jay S. Fishman and James
M. Michener, and each of them severally, to be my true and lawful
attorneys-in-fact and agents, each acting alone with full power of
substitution and re-substitution, to do or cause to be done any and all acts
and things and to execute any and all instruments and documents which said
attorneys-in-fact and agents, or any of them, may deem advisable or necessary
to enable the Company to comply with the Securities Act of 1933, as amended
(the "Securities Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the Securities Act of up to 1,000,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), to be offered by the Company in connection with a capital
accumulation plan for property and casualty insurance agents, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign, in the name and on behalf of the undersigned as a director
of the Company, a Registration Statement on Form S-3 or another appropriate
form in respect of the registration of such Class A Common Stock and any and
all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the
same with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the
undersigned which said attorneys-in-fact and agents, or any of them, deem
advisable in order to qualify or register the Class A Common Stock under the
securities laws of any of the several States; and the undersigned does hereby
ratify all that said attorneys-in-fact or agents, or any of them, shall do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 23rd day of April, 1997.
----
/s/ Arthur Zankel
-----------------
(Signature)
<PAGE>
EXHIBIT 99.1
TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN
as of July 1, 1997
SECTION 1. PURPOSE OF THE PLAN.
The name of this plan is TRAVELERS PROPERTY CASUALTY CORP. AGENCY CAPITAL
ACCUMULATION PLAN (the "Plan"). The purpose of the Plan is to enable TRAVELERS
PROPERTY CASUALTY CORP., a Delaware corporation (the "Company"), and its
Subsidiaries to attract, retain and motivate Agencies (as hereinafter defined),
to compensate them for their contributions to the growth and profits of the
Company and to encourage ownership of Class A common stock, par value $.01 per
share (the "Common Stock"), of the Company on the part of such Agencies. The
Plan provides incentives to participating Agencies which are linked directly to
increases in stockholder value and will therefore inure to the benefit of all
stockholders of the Company.
SECTION 2. DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "AGENCIES" means independent property-casualty insurance agencies
appointed by the Insurance Companies to represent the Insurance Companies
in the sale of insurance or otherwise.
(b) "AGENCY STOCK" means shares of Common Stock awarded pursuant to
Section 6.
(c) "AGENCY STOCK AWARD AGREEMENT" shall have the meaning ascribed to such
term in Section 6(c).
(d) "ANNUAL PREMIUM" with respect to any given year means the annual
written property-casualty premium (Eligible Premium or Eligible Net Written
Premium) (as defined in the Agency Performance Plus Agreements) between a
Participant and any of the Insurance Companies.
(e) "BASE YEAR" shall have the meaning ascribed to such term in Section
3(a).
(f) "BOARD" means the Board of Directors of the Company.
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(g) "CAUSE" means conduct by a Participant that materially breaches such
Participant's agreement with the Insurance Companies or that is
demonstrably injurious to the Company or a Subsidiary, monetarily or
otherwise, which conduct shall include, but not be limited to (i)
disclosing or misusing any confidential information pertaining to the
Company or a Subsidiary or (ii) disparaging the Company, any Subsidiary or
any of their respective officers or directors. The determination of
whether any conduct, action or failure to act constitutes "Cause" shall be
made by the Committee in its discretion.
(h) "COMMITTEE" means the Nominations, Compensation and Corporate
Governance Committee of the Board or any subcommittee thereof or such other
committee as may be appointed by the Board from time to time.
(i) "COMMON STOCK" shall have the meaning ascribed to such term in Section
1.
(j) "COMPANY" shall have the meaning ascribed to such term in Section 1.
(k) "ELIGIBLE AGENCIES" shall have the meaning ascribed to such term in
Section 3(a).
(l) "INSURANCE COMPANIES" means The Travelers Indemnity Company, Travelers
Casualty and Surety Company and The Standard Fire Insurance Company and
their respective property-casualty subsidiaries and affiliates.
(m) "LINE" means a line of business such as Commercial Lines, Personal
Lines or Bond.
(n) "PARTICIPANT" means an Eligible Agency that elects to participate in
the Plan.
(o) "PERFORMANCE PLUS" means the Performance Plus Payment described in the
Bond and Commercial Lines Performance Plus Agreements and/or the
Participation Payment described in the Personal Lines Performance Plus
Agreement.
(p) "PLAN" shall have the meaning ascribed to such term in Section 1.
(q) "PRODUCER" means, with respect to any Agency, a property-casualty
insurance sales agent who is a principal or employee of such Agency.
(r) "RESTRICTED AGENCY STOCK AWARD AGREEMENT" shall have the meaning
ascribed to such term in Section 5(b).
(s) "RESTRICTED PERIOD" means the three-year period (or such other period
determined by the Committee) together with any extension thereof approved
pursuant to the Plan, commencing on the date of an award of Restricted
Agency Stock; provided,
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<PAGE>
however, that for awards made in respect of the 1997 performance year, the
Restricted Period means the two-year period (or such other period determined
by the Committee) together with any extension thereof approved pursuant to
the Plan, commencing on the date of an award.
(t) "RESTRICTED AGENCY STOCK" means shares of Common Stock that are
subject to the restrictions and potential forfeiture set forth in Section 5.
(u) "SUBSIDIARY" means any entity at least one-half of whose outstanding
voting stock, or beneficial ownership for entities other than corporations,
is owned, directly or indirectly, by the Company, or which is otherwise
controlled directly or indirectly by the Company.
SECTION 3. ELIGIBILITY AND PARTICIPATION.
(a) RESTRICTED AGENCY STOCK. Agencies that earn the minimum Performance
Plus and are selected from time to time by the Committee, in its discretion
("Eligible Agencies"), shall be eligible to participate in the Plan and receive
one or more awards of Restricted Agency Stock. The minimum Performance Plus
that must be earned for the calendar year for which such Performance Plus is
earned (the "Base Year") before a Restricted Agency Stock award can be elected
is currently $5,000 in respect of the Line to which such Performance Plus
relates, but the Committee may, in its discretion, provide for alternative
minimum Performance Plus that must be earned. Commercial Lines, Personal Lines
and Bond are not aggregated for this purpose.
(b) AGENCY STOCK. Eligible Agencies that are selected from time to time
by the Committee, in its discretion, shall be eligible to receive one or more
awards of Agency Stock under the Plan.
SECTION 4. AMOUNT AND FORM OF AWARDS.
(a) RESTRICTED AGENCY STOCK. Eligible Agencies that make a timely
election may be awarded Restricted Agency Stock in such amounts as are described
below. For Eligible Agencies electing to participate, unless otherwise
determined by the Committee, the amount of any award of Restricted Agency Stock
that may be elected shall be not less than an amount equal to 10% of Performance
Plus and not more than an amount equal to 50% of Performance Plus; provided,
that any such election and award shall be separately determined with respect to
Performance Plus for each of Commercial Lines, Personal Lines and Bond. An
election to receive Restricted Agency Stock shall be of no force and effect
unless made in accordance with the administrative procedures established by the
Committee from time to time, including, without limitation, timely receipt by
the Company of an annual election form from the Eligible Agency. Awards of
Restricted Agency Stock shall be granted at such time as the Committee may in
its discretion determine, and the Committee may also in its discretion provide
for alternative
3
<PAGE>
methods for grants of awards. Awards of Restricted Agency Stock will be made in
lieu of cash payment of a percentage of the Participant's Performance Plus.
(b) AGENCY STOCK. Eligible Agencies that are selected by the Committee
pursuant to Section 3(b) may be awarded Agency Stock in such amounts as are
determined by the Committee in its discretion. Awards of Agency Stock shall be
granted to those Eligible Agencies (which need not be Participants under the
Plan) at such time as the Committee may in its discretion determine, without the
making of any election on the part of the recipient. Awards of Agency Stock
will be in addition to any cash or other compensation, including awards of
Restricted Agency Stock, if any, otherwise payable to the Eligible Agency
selected to receive such award.
(c) The number of shares of Common Stock which may be issued under the
Plan, either as Restricted Agency Stock or Agency Stock, shall be equal to one
million (1,000,000) shares of Common Stock, subject to adjustment as provided in
Section 8. The shares issued hereunder shall be previously issued shares
reacquired by the Company. In the event Restricted Agency Stock is forfeited
prior to the end of the Restricted Period, the shares of Common Stock called for
by such award of Restricted Agency Stock will become available for future
awards.
SECTION 5. RESTRICTED AGENCY STOCK.
(a) The number of shares of Restricted Agency Stock awarded to a
Participant under the Plan shall be determined by a formula or formulas approved
by the Committee, which will take into account elections made under the Plan.
In order to reflect the impact of the restrictions on the value of the
Restricted Agency Stock, as well as the possibility of forfeiture of the
Restricted Agency Stock, the fair market value of Common Stock shall be
discounted at 25% in determining the number of shares of Restricted Agency
Stock to be awarded. The Committee may, where it deems appropriate, and in its
discretion, provide for an alternative discount rate. For purposes of this
Plan, the fair market value of Common Stock for an award will be the average of
the Common Stock's closing prices on the Composite Tape of the New York Stock
Exchange, Inc. for the five (5) trading days prior to the date of the award.
The dollar value of an award will be divided by the discounted market value to
determine the number of shares of Restricted Agency Stock in an award. The
value of fractional shares will be paid currently in cash. In the event the
Committee provides for alternative methods for grants of awards, the Committee
may, in its discretion, provide for alternative methods of determining the fair
market value of the Common Stock for such awards, and may also provide for
alternative forfeiture provisions. In the event there is an adjustment to the
Performance Plus after the date of an award of Restricted Agency Stock under
the Plan, the Company may pay the adjustment amount entirely in cash.
(b) Unless the Committee determines otherwise, a Participant will not
have any rights with respect to an award of Restricted Agency Stock unless or
until such Participant has executed an agreement evidencing the award in form
and substance satisfactory to the Committee (a "Restricted Agency Stock Award
Agreement") and has delivered a fully executed copy thereof to the Company.
Each Participant that is awarded Restricted Agency Stock may, but need not,
be issued a stock certificate in respect of such shares
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<PAGE>
of Restricted Agency Stock. In the event a certificate is not issued in the
name of a Participant, a "book entry" (i.e., a computerized or manual entry)
will be made in the records of the Company to evidence the award of shares of
Restricted Agency Stock to such Participant. Such Company records shall,
absent manifest error, be binding on the Participants. Each certificate, if
any, registered in the name of a Participant shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such award,
substantially in the following form:
"The transferability of the certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of
the Travelers Property Casualty Corp. Agency Capital Accumulation Plan and
a Restricted Agency Stock Award Agreement entered into between the
registered owner and Travelers Property Casualty Corp. Copies of such Plan
and Agreement are on file in the offices of Travelers Property Casualty
Corp."
Any stock certificate issued in the name of a Participant evidencing
shares of Restricted Agency Stock will be held in the custody of the Company
until the restrictions thereon shall have lapsed, and, as a condition of such
issuance of a certificate for Restricted Agency Stock, the Participant shall
have delivered a stock power, endorsed in blank, relating to the shares
covered by such certificate.
(c) The shares of Restricted Agency Stock awarded pursuant to this Section
5 shall be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the Restricted Agency
Stock Award Agreements, during the Restricted Period the Participant shall
not be permitted to sell, transfer, pledge or assign shares of Restricted
Agency Stock awarded under the Plan. The foregoing shall not prohibit a
Participant from entering into agreements with its Producers, if any, with
respect to rights and obligations associated with the Restricted Agency
Stock; provided, however, that Producers shall have no rights hereunder and
neither the Company nor any of its Subsidiaries or affiliates shall have
any liability thereunder or with respect thereto. The Committee may, in
its discretion, (x) initially provide for an alternative Restricted Period
or alter the Restricted Period for a previously granted award (provided
that the Committee may not extend the Restricted Period for a previously
granted award without the Participant's written consent), (y) during any
extension of such Restricted Period, provide for alternative restrictions
and (z) provide for the lapse of any such restrictions in installments and
accelerate or waive any such restrictions in whole or in part based on such
factors and such circumstances as the Committee may determine, in its
discretion.
(ii) Unless the Committee in its discretion shall determine otherwise
at or prior to the time of the grant of any award, the Participant shall
have the right to direct the vote of its shares of Restricted Agency Stock
during the Restricted Period, in accordance with paragraph (e) of this
Section 5. The Participant shall have the right during the Restricted
Period to receive any
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<PAGE>
regular dividends or dividend equivalents on such shares of Restricted
Agency Stock. The Committee shall in its discretion determine the
Participant's rights with respect to extraordinary dividends or
distributions on the shares of Restricted Agency Stock.
(iii) Shares of Common Stock shall be delivered to the Participant
either in certificate form or by crediting the Participant's brokerage
account at Smith Barney Inc. promptly after, and only after, the Restricted
Period has expired (or such earlier time as the restrictions may lapse in
accordance with paragraph (c)(i) of this Section 5) so long as there has
been no event resulting in forfeiture of such award of Restricted Agency
Stock. After the restrictions lapse, the Participant may instead of
receiving all of the Common Stock direct the Company in writing to issue
certificates to particular Producers or credit the brokerage accounts of
such specified Producers at Smith Barney Inc. with all or a portion of the
Common Stock; provided, however, that neither the Company nor any of its
Subsidiaries or affiliates shall have any liability to any Agency or
Producer with respect to such issuance.
(d) Subject to the provisions of paragraph (c)(i) of this Section 5, the
following provisions shall apply to a Participant's shares of Restricted Agency
Stock prior to the end of the Restricted Period (including extensions):
Each award of Restricted Agency Stock shall be subject to forfeiture based
upon a separate determination of performance in respect of the Line in
which the award was originally granted. In the event that in any of the
calendar years during the Restricted Period immediately following the Base
Year such Participant's Annual Premium with the Company and the Insurance
Companies is reduced by 50% or more in Commercial Lines, Personal Lines or
Bond compared to such Participant's Annual Premium (in the applicable Line)
with the Company and such Insurance Companies in the Base Year (as
adjusted, if applicable, as provided below), such Participant will
forfeit all Restricted Agency Stock awarded with respect to such
Base Year related to the Line in which the Annual Premium was reduced.
Forfeiture determinations will be made separately for each award
with reference to the applicable Base Year and Line for that award. In
addition, unless the Committee in its discretion shall determine otherwise,
failure by a Participant to maintain its agency agreement with the
Insurance Companies throughout the Restricted Period will result in
forfeiture of all Restricted Agency Stock previously awarded to such
Participant. Upon forfeiture, the Participant will have no further rights
in the Restricted Agency Stock or the Performance Plus in respect of which
the Restricted Agency Stock was awarded. The determination of whether
there is a reduction in Annual Premiums in any given year compared to the
applicable Base Year resulting in forfeiture will be based on Annual
Premiums in the Line in which the Restricted Agency Stock was awarded, and
will be made by the Committee, in its discretion. In the event any
reduction in Annual Premiums resulting in forfeiture is the result of the
Insurance Companies terminating the Participant's appointment other than
for Cause, the restrictions on all
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<PAGE>
Restricted Agency Stock previously awarded to such Participant in
respect of the Line for which the appointment was terminated will
immediately lapse. In the event any reduction in Annual Premiums resulting
in forfeiture is the result of the Insurance Companies withdrawing
from a Commercial Lines, Personal Lines or Bond market or product that
is material to a Participant, all determinations of forfeiture with
respect to such Participant under this Section 5 shall be recalculated and
the Participant's Base Year Annual Premium in the applicable Line reduced
by the percentage of the reduction in Annual Premium that was attributable
to the withdrawal; provided, however, that if the reduction is 90% or
more, the restrictions on all Restricted Agency Stock previously awarded
to such Participant in respect of the Line in which the Annual Premium
was so reduced will immediately lapse. For these purposes, (i) whether
a "withdrawal" has occurred will be a determination made by
the Committee in its discretion and (ii) "material" shall be
deemed to be 10% of that Participant's Annual Premium writings with the
Insurance Companies with respect to the Line in which the Annual Premium
was reduced; provided, however, that the Committee shall have discretion
to deem any other circumstances or event to be a material withdrawal.
(e) Unless the Committee in its discretion shall determine otherwise at or
prior to the time of the grant of any award of Restricted Agency Stock, during
the Restricted Period the shares of Restricted Agency Stock shall be voted by
the Company's senior administrative officer in charge of administering the Plan,
or such other person as the Committee may designate (the "Plan Administrator"),
and the Plan Administrator shall vote such shares in accordance with
instructions received from Participants. Shares as to which no instructions are
received shall be voted by the Plan Administrator proportionately in accordance
with instructions received from Participants in the Plan.
SECTION 6. AGENCY STOCK.
(a) The number of shares of Agency Stock awarded to an Eligible Agency
under the Plan may be determined by a formula or formulas approved by the
Committee or may be determined by the Committee individually on a case by
case basis. Shares of Agency Stock awarded to Eligible Agencies pursuant to
the Plan will generally not be subject to the restrictions or conditions set
forth in Section 5; provided, however, that if the Committee so determines,
such shares may be subject to sale or other restrictions.
(b) Each Eligible Agency that is awarded Agency Stock shall be issued a
stock certificate in respect of such shares of Agency Stock or may have the
shares credited to the Eligible Agency's account at Smith Barney Inc. The
Eligible Agency may direct the Company in writing to issue all or a portion of
such shares of Agency Stock in the name or to the brokerage account of its
specified Producers; provided, however, that neither the Company nor any of its
Subsidiaries or affiliates shall have any liability to any Agency or Producer
with respect to such issuance.
(c) If the Committee determines to subject any shares of Agency Stock to
sale or other restrictions, unless the Committee determines otherwise, the
Eligible Agency that is granted the award that is so subject shall not have
any rights with respect to such award of Agency Stock unless or until such
Agency has executed an agreement evidencing the award in form and substance
satisfactory to the Committee (an "Agency Stock Award Agreement") and has
delivered a fully executed copy thereof to the Company. In the event an
Eligible Agency is awarded Agency Stock that is subject to sale or other
restrictions, the certificate registered in the name of the Eligible Agency
shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such award.
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The Committee shall require that any stock certificate issued in the name of
an Eligible Agency evidencing shares of Agency Stock that are subject to sale
or other restrictions be held in the custody of the Company until the
restrictions thereon shall have lapsed, and that, as a condition of such
issuance of a certificate for Agency Stock, the Eligible Agency shall have
delivered a stock power, endorsed in blank, relating to the shares covered by
such certificate.
SECTION 7. ADMINISTRATION.
The Plan shall be administered by the Committee.
The Committee shall have the power and authority to make awards of
Restricted Agency Stock and Agency Stock pursuant to the terms of the Plan.
In particular, the Committee shall have the authority:
(a) to select those Agencies that are Eligible Agencies;
(b) to determine the minimum Performance Plus that must be earned before a
Restricted Agency Stock award can be elected hereunder;
(c) to determine whether and to what extent Restricted Agency Stock is to
be granted to Eligible Agencies hereunder;
(d) to determine the minimum and maximum percentage of Performance Plus
payable in Restricted Agency Stock that can be elected hereunder;
(e) to select those Eligible Agencies that are to receive Agency Stock
hereunder;
(f) to determine whether and to what extent Agency Stock is to be granted
to Eligible Agencies hereunder;
(g) to determine the number of shares of Common Stock to be covered by
each award granted hereunder;
(h) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder; and
(i) to determine the terms and conditions, not inconsistent with the terms
of the Plan, which shall govern all written instructions evidencing the
Restricted Agency Stock and Agency Stock.
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The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan; and to otherwise
supervise the administration of the Plan. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company, Eligible Agencies and the
Participants. The Committee may delegate some or all of its authority over
the administration of the Plan to any other persons or a committee.
SECTION 8. ADJUSTMENTS UPON A CHANGE IN COMMON STOCK.
In the event of any change in the outstanding Common Stock of the Company
by reason of any stock split, stock dividend, distribution, recapitalization,
merger, consolidation, reorganization, combination or exchange of shares or
other similar event if in the determination of the Commmittee such change
equitably requires an adjustment in the number or kind of shares that may be
issued under the Plan pursuant to Section 4(c), such adjustment shall be made
by the Committee and shall be conclusive and binding for all purposes of the
Plan.
SECTION 9. AMENDMENT AND TERMINATION.
The Plan may be amended or terminated at any time and from time to time by
the Board. Neither an amendment to the Plan nor the termination of the Plan
shall adversely affect any right of any Eligible Agency with respect to any
Restricted Agency Stock or Agency Stock theretofore granted without such
Eligible Agency's written consent. Subject to the foregoing limitations, the
Committee shall have the authority to amend certain Plan provisions to the
extent necessary to permit participation in the Plan by Agencies that are
located outside of the United States on terms and conditions which are
comparable to those afforded to Agencies located within the United States.
SECTION 10. GENERAL PROVISIONS.
(a) All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any Agency any right to continue to represent the Insurance
Companies in the sale of insurance or otherwise, as the case may be, nor shall
it interfere in any way with the right of the Company or any of the Insurance
Companies to terminate the agency relationship with any of its Agencies at any
time. Nothing contained herein
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is intended or shall be construed to modify or supersede the terms of any
existing contracts between an Agency and the Insurance Companies, including
but not limited to any agency agreement, any profit sharing or performance
plus agreement or any agency benefits agreement.
(c) No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan.
(d) An Eligible Agency's rights and interest under the Plan may not be
assigned or transferred in whole or in part either directly or by operation of
law or otherwise including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner and no such
right or interest of any Eligible Agency in the Plan shall be subject to any
obligation or liability of such Eligible Agency. Notwithstanding the foregoing,
a Participant may designate a successor in interest to its rights and interest
under the Plan if such successor is an Eligible Agency or is designated by the
Committee as an Eligible Agency and agrees to all of the terms hereof, subject
to the Committee's consent.
(e) The Company and its Subsidiaries shall have the right to deduct from
any payment made under the Plan any federal, state or local income taxes or
other amounts required by law to be withheld with respect to such payment.
It shall be a condition to the obligation of the Company to issue Common
Stock upon the lapse of restrictions on Restricted Agency Stock or upon the
grant of an award of Agency Stock that the Eligible Agency pay to the
Company, upon its demand, such amount as may be requested by the Company for
the purpose of satisfying any liability to withhold federal, state or local
income taxes or other amounts. If the amount requested is not paid, the
Company may refuse to issue shares.
(f) Notwithstanding anything to the contrary contained herein, upon a
"Change of Control" (defined below), the restrictions on each award of
Restricted Agency Stock and Agency Stock (if any) shall immediately lapse.
"Change of Control" shall mean the occurrence of any of the following, unless
such occurrence shall have been approved or ratified by at least a two-thirds
(2/3) vote of the Continuing Directors (defined below): (A) any person within
the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than Travelers Group Inc. or any
affiliates thereof, shall have become the beneficial owner, within the
meaning of Rule 13d-3 under the Exchange Act, of shares of stock of the
Company having twenty five percent (25%) or more of the total number of votes
that may be cast for election of the directors of the Company, or (B) there
shall have been a change in the composition of the Board such that at any
time a majority of the Board shall have been members of the Board for less
than twenty-four (24) months, unless the election of each new director who
was not a director at the beginning of the period was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who were
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directors at the beginning of such period, or who were approved as directors
pursuant to the provisions of this paragraph (the "Continuing Directors").
(g) All claims and disputes between an Agency and the Company or any of
the Insurance Companies arising out of the Plan or any award granted hereunder
shall be submitted to arbitration in accordance with the rules and procedures of
the American Arbitration Association. Notice of demand for arbitration shall be
given in writing to the other party and shall be made within a reasonable time
after the claim or dispute has arisen. The award rendered by the arbitrator
shall be made in accordance with the Plan, shall be final, and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof. The provisions of this Section 10(g) shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.
(h) The validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the State of Delaware.
(i) No Common Stock or other securities shall be issued hereunder unless
counsel for the Company shall be satisfied that such issuance will be in
compliance with all applicable federal, state and international securities
statutes, rules and regulations. The appropriate officers of the Company or its
Subsidiaries shall cause to be filed any reports, returns or other information
regarding awards or Common Stock issued under the Plan as may be required by
Section 13 or 15(d) of the Exchange Act or any other applicable statute, rule or
regulation.
(j) If any term or provision of this Plan or the application thereof to
any person or circumstances shall, to any extent, be invalid or unenforceable,
then the remainder of the Plan, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision hereof
shall be valid and be enforced to the fullest extent permitted by applicable
law.
(k) Each Restricted Agency Stock Award Agreement and Agency Stock Award
Agreement, if any (together, the "Award Agreements"), is entered into by the
Agency and the Company, and the Agency's Producers are not a party to it and
have no rights thereunder or hereunder. Any arrangements or undertakings
entered into between an Agency and such Agency's Producers establish rights
and obligations solely between and among such parties and do not create any
obligations on the part of or bind the Company or any of its Subsidiaries or
affiliates, which shall have no liability thereunder. The Producers must
look to the Agencies, and not to the Company or any of its Subsidiaries or
affiliates, for the benefit of any obligations the Agencies may have
undertaken pursuant to any arrangement and the Producers bear all risk with
respect to the fulfillment by the Agencies of such obligations. This Plan
and the Award Agreements are for the protection and benefit of the Company
and the Eligible Agencies and no other person shall be a direct or indirect
beneficiary of or have any direct or indirect cause of action or claim in
connection therewith.
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SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on July 1, 1997. The Plan shall remain
effective until terminated by the Board in accordance with Section 9.
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