UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
_____________________
Date of Report (June 7, 1994): June 14, 1994
Alexander & Alexander Services Inc.
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(Exact name of registrant as specified in its charter)
Maryland 1-8282 52-0969822
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
1211 Avenue of the Americas 10036
New York, New York ------------
------------------------------------------ (Zip Code)
(Address of principal executive offices)
(212) 840-8500
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(Registrant's telephone number,
including area code:)
Not Applicable
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(Former name or former address,
if changed since last report.)
<PAGE>
Item 5. Other Events.
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On June 7, 1994, Alexander & Alexander Services Inc.
issued the following two press releases:
A&A TO SEEK SHAREHOLDER APPROVAL
OF $200 MILLION INVESTMENT BY AIG;
BOARD REDUCES QUARTERLY COMMON STOCK DIVIDEND TO $0.025
NEW YORK, June 7, 1994 -- Alexander & Alexander Services
Inc. (A&A) today announced that American International
Group, Inc. (AIG) has agreed to invest $200 million in a new
issue of Series B convertible preferred stock with an 8
percent annual dividend. The dividend will be paid in kind
through Dec. 15, 1996, and at A&A's option for an additional
three years.
A&A's Board of Directors also declared a quarterly
common stock dividend of $0.025 per share, payable June 30
to shareholders of record on June 17, 1994.
Dr. Robert E. Boni, chairman of the board, said, "A&A
intends to use most of the proceeds of the AIG investment to
strengthen our core businesses. Also, part of the proceeds
will finance a reinsurance arrangement to further protect
the company from previously disclosed exposures relating to
certain discontinued underwriting operations."
He added, "The AIG investment, together with the lower
dividend, would greatly strengthen the company's capital
base and cash flow, providing for significant new investment
in A&A's core businesses."
The new preferred stock is convertible into A&A's
common stock at $17 per share. Upon conversion of the
preferred shares into common stock, AIG would own
approximately 21 percent of A&A's common stock. Both this
stock and the
<PAGE>
common stock into which it is convertible are non-voting in
the hands of AIG.
AIG can exchange non-voting common stock for up to 9.9
percent of A&A's voting stock, but AIG does not intend to do
so. AIG will not be represented on the A&A board, and a
standstill agreement is in effect for eight years.
A&A will seek authorization for the transaction at a
special stockholders meeting to be called in the near
future. The transaction also is subject to customary
closing conditions, including appropriate government
approvals.
AIG Chairman Maurice R. Greenberg said, "A&A is a
leading insurance brokerage organization with a long
tradition of leadership in its industry. AIG strongly
believes in the independent broker system and has in the
past made investments in other brokerage firms to enable
them to continue the tradition of operating independently."
Dr. Boni added, "In January, we promised dramatic
action to improve operations and earnings. Today's steps
constitute an important installment on that promise. AIG's
investment is a welcome vote of confidence in A&A's future."
AIG is the leading U.S.-based international insurance
organization and the largest underwriter of commercial and
industrial insurance in the United States.
A&A Services Inc. [NYSE: AAL] is a global organization
of professional advisers providing risk management,
insurance brokerage and human resource management consulting
services from offices in more than 80 countries.
##
<PAGE>
A&A NAMES FRANK ZARB AS CHAIRMAN, CEO AND PRESIDENT
NEW YORK, June 7 -- The Board of Directors of Alexander &
Alexander Services Inc. (A&A) today named Frank G. Zarb as
chairman, CEO and president of the company.
Dr. Robert E. Boni, who has been non-executive chairman
of A&A's board of directors since January 1994, said, "We
are delighted to have an executive of Frank Zarb's calibre
to lead our company. He is one of the best known and most
talented leaders in the financial services industry, with
experience in insurance and a proven track record in
turnaround situations. His stature and success in the
global business community as well as the public sector
reinforce our confidence in A&A's business outlook as we
strengthen our operations."
Mr. Zarb, 59, said, "I believe very strongly in the
future of A&A. We will move quickly to improve
profitability and strengthen our core business. Today's
earlier announcement of the $200 million capital infusion
from AIG and the dividend reduction by the board are very
significant. They contribute to the process of revitalizing
our franchise and returning A&A to the path of growth,
profitability and, ultimately, increased value to
shareholders."
He added, "From my experience at Smith Barney, I know
this company. We have great opportunities to realize our
potential through focused management and better service to
our customers."
Mr. Zarb, who is presently vice chairman and group
chief executive of
<PAGE>
Travelers Inc., has a distinguished record in business
and public service. He had previously served as chairman
and chief executive officer of Smith Barney, Travelers'
brokerage and investment banking subsidiary, which he
joined in November 1988. He was named corporate group chief
executive in June 1993 and elected a vice chairman of
Travelers Inc. (formerly Primerica Corporation) in September
1991.
During his tenure at Smith Barney, Mr. Zarb oversaw
growth in the firm's business mix and clientele. Most
importantly, he directed a series of record performances by
the firm, from a pre-tax loss of $100 million in 1988 to
more than $200 million in after tax profits in 1993, prior
to the acquisition of Shearson.
Before joining Smith Barney, Mr. Zarb for 10 years had
been a senior partner of Lazard Freres & Co., with
responsibilities for a broad range of investment banking
activities, including international and domestic corporate
finance and mergers and acquisitions.
From 1974 through 1977, Mr. Zarb was the senior federal
official for all U.S. government energy-related activities.
He served as executive director of the Cabinet-level Energy
Resources Council, Administrator of the Federal Energy
Administration and Assistant to the President for Energy
Affairs. He was widely known during the Ford administration
as the national "energy czar."
Prior to those appointments, he had been associate
director of the Office of Management and Budget from 1973 to
1974 and served as assistant secretary of labor between 1971
and 1972.
Before entering public service, Mr. Zarb acquired
considerable experience
<PAGE>
in the securities industry, beginning his career with
Goodbody and Co. in 1962. He later served in various
capacities for predecessor firms to Shearson, as executive
vice president of marketing operations, and investment
banking as well as chairman of the Executive Committee.
Mr. Zarb continues to have a role in public service.
Since October 1993, he has been chairman of the New York
Stock Exchange Nominating Committee. He was nominated to
serve on the United States Enrichment Corporation's board of
directors by President Clinton, and his nomination was
confirmed by the U.S. Senate in February 1994. (USEC was
established in 1992 to take over the government's uranium
enrichment operations and eventually create a private
corporation to compete more aggressively in markets for
enriched uranium.)
Mr. Zarb, who earned his bachelor's and master's of art
degrees from Hofstra, was awarded an honorary law degree by
the university in 1975, and the school's Outstanding Scholar
Award in 1974. Hofstra recently named its business school
after Mr. Zarb.
With Mr. Zarb's appointment, Dr. Boni will continue as
an A&A board member and serve as chairman of the board's
Executive Committee. Michael K. White will step down as
A&A's president.
A&A Services Inc. [NYSE: AAL] is a global organization
of professional advisers providing risk management,
insurance brokerage and human resource management consulting
services from offices in more than 80 countries.
##
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934,
the registrant has duly caused this report to be signed on
its behalf by the
undersigned hereunto duly authorized.
ALEXANDER & ALEXANDER SERVICES INC.
By: /s/ Ronald J. Roessler
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Senior Vice President
and General Counsel
Date: June 14, 1994
