SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 1-9924
The Travelers Inc.
(Exact name of registrant as specified in its charter)
Delaware 52-1568099
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
65 East 55th Street, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 891-8900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date:
Common stock outstanding as of April 30, 1994: 325,497,250
<PAGE>
The Travelers Inc.
TABLE OF CONTENTS
-----------------
Part I - Financial Information
<TABLE> <CAPTION>
Item 1. Financial Statements: Page No.
--------
<S> <C>
Condensed Consolidated Statement of Income (Unaudited) -
Three Months Ended March 31, 1994 and 1993 3
Condensed Consolidated Statement of Financial Position -
March 31, 1994 (Unaudited) and December 31, 1993 4
Condensed Consolidated Statement of Changes in Stockholders' Equity
(Unaudited) - Three Months Ended March 31, 1994 5
Condensed Consolidated Statement of Cash Flows (Unaudited) -
Three Months Ended March 31, 1994 and 1993 6
Notes to Condensed Consolidated Financial Statements - (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II - Other Information
Item 1. Legal Proceedings 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 6. Exhibits and Reports on Form 8-K 21
Exhibit Index 22
Signatures 28
</TABLE>
2
<PAGE>
<TABLE> <CAPTION>
The Travelers Inc. and Subsidiaries
Condensed Consolidated Statement of Income (Unaudited)
(In millions of dollars, except per share amounts)
Three months ended March 31, 1994 1993
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues
Insurance premiums $1,999 $ 366
Commissions and fees 833 277
Net investment income 788 151
Finance related interest and other charges 246 232
Principal transactions 239 78
Asset management fees 182 38
Equity in income of old Travelers - 43
Other income 482 117
---------------------------------------------------------------------------------------------------
Total revenues 4,769 1,302
---------------------------------------------------------------------------------------------------
Expenses
Policyholder benefits and claims 2,075 210
Non-insurance compensation and benefits 888 305
Insurance underwriting, acquisition and operating 649 126
Interest 223 158
Provision for credit losses 39 35
Other operating 357 140
---------------------------------------------------------------------------------------------------
Total expenses 4,231 974
---------------------------------------------------------------------------------------------------
Gain on sale of stock of subsidiaries and affiliates - 6
---------------------------------------------------------------------------------------------------
Income before income taxes, minority interest and
cumulative effect of changes in accounting principles 538 334
Provision for income taxes 198 119
---------------------------------------------------------------------------------------------------
Income before minority interest and cumulative
effect of changes in accounting principles 340 215
Minority interest, net of income taxes - (8)
Cumulative effect of changes in accounting principles,
net of income taxes - (35)
----------------------------------------------------------------------------------------------------
Net income $ 340 $ 172
====================================================================================================
Net income per share of common stock
and common stock equivalents:
Before cumulative effect of changes in accounting principles $0.98 $0.89
Cumulative effect of changes in accounting principles - (0.15)
-----------------------------------------------------------------------------------------------------
Net income per share of common stock
and common stock equivalents $0.98 $0.74
=====================================================================================================
Weighted average number of common shares outstanding
and common stock equivalents 326.8 224.9
=====================================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
3
<PAGE>
<TABLE> <CAPTION>
The Travelers Inc. and Subsidiaries
Condensed Consolidated Statement of Financial Position
(In millions of dollars, except per share amounts)
March 31, December 31,
1994 1993
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets (Unaudited)
Cash and cash equivalents
(including $877 and $914 segregated under federal and other brokerage regulations) $ 1,463 $ 1,526
Investments:
Fixed maturities:
Available for sale (1994, cost - $28,340; 1993, market - $28,438) 27,474 28,109
Held to maturity (market $163 and $201) 141 177
Equity securities, at market (cost $498 and $513) 508 555
Mortgage loans 6,725 7,365
Real estate held for sale 979 1,049
Policy loans 1,365 1,367
Short-term and other 3,446 3,577
- - -------------------------------------------------------------------------------------------------------------------
Total investments 40,638 42,199
- - -------------------------------------------------------------------------------------------------------------------
Securities borrowed or purchased under agreements to resell 19,089 13,353
Brokerage receivables 8,072 8,167
Trading securities owned, at market value 6,423 5,863
Net consumer finance receivables 6,312 6,216
Reinsurance recoverables 5,153 4,999
Value of insurance in force and deferred policy acquisition costs 2,041 1,996
Cost of acquired businesses in excess of net assets 2,149 2,162
Separate and variable accounts 4,462 4,665
Other receivables 4,904 4,624
Other assets 7,324 5,590
- - -------------------------------------------------------------------------------------------------------------------
Total assets $108,030 $101,360
===================================================================================================================
Liabilities
Investment banking and brokerage borrowings $ 2,984 $ 3,454
Short-term borrowings 2,959 2,535
Long-term debt 7,063 6,991
Securities loaned or sold under agreements to repurchase 14,670 10,144
Brokerage payables 7,948 7,012
Trading securities sold not yet purchased, at market value 4,432 3,835
Contractholder funds 17,527 17,980
Insurance policy and claims reserves 27,014 26,651
Separate and variable accounts 4,436 4,642
Accounts payable and other liabilities 10,020 8,680
- - -------------------------------------------------------------------------------------------------------------------
Total liabilities 99,053 91,924
- - -------------------------------------------------------------------------------------------------------------------
ESOP Preferred stock - Series C 235 235
Guaranteed ESOP obligation (111) (125)
- - -------------------------------------------------------------------------------------------------------------------
124 110
- - -------------------------------------------------------------------------------------------------------------------
Stockholders' equity
Preferred stock ($1.00 par value; authorized shares: 30 million), at aggregate
liquidation value 800 800
Common stock ($.01 par value; authorized shares: 500 million
issued shares: 1994 - 368,244,075 shares and 1993 - 368,287,709 shares) 4 4
Additional paid-in capital 6,642 6,566
Retained earnings 3,419 3,140
Treasury stock, at cost (1994 - 42,647,897 shares, 1993 - 41,155,405 shares) (1,238) (1,121)
Other (774) (63)
- - -------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 8,853 9,326
- - -------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $108,030 $101,360
===================================================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
4
<PAGE>
<TABLE> <CAPTION>
The Travelers Inc. and Subsidiaries
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
(In millions of dollars, except per share amounts)
Three months ended March 31, 1994 Amount Shares
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Preferred Stock at aggregate liquidation value (in thousands)
Balance, beginning of year $ 800 11,200
- - -----------------------------------------------------------------------------------------------------------------
Balance, end of period 800 11,200
=================================================================================================================
Common Stock and Additional Paid-In Capital
Balance, beginning of year 6,570 368,287
Issuance of shares pursuant to employee benefit plans 76 -
Other - (43)
- - -----------------------------------------------------------------------------------------------------------------
Balance, end of period 6,646 368,244
- - -----------------------------------------------------------------------------------------------------------------
Retained Earnings
Balance, beginning of year 3,140
Net income 340
Common dividends (40)
Preferred dividends (21)
- - -----------------------------------------------------------------------------------------------
Balance, end of period 3,419
- - -----------------------------------------------------------------------------------------------
Treasury stock (at cost)
Balance, beginning of year (1,121) (41,155)
Issuance of shares pursuant to employee benefit plans, net of shares
tendered for payment of option exercise price and withholding taxes 65 3,357
Treasury stock acquired (179) (4,774)
Other (3) (76)
- - -----------------------------------------------------------------------------------------------------------------
Balance, end of period (1,238) (42,648)
- - -----------------------------------------------------------------------------------------------------------------
Other
Balance, beginning of year (63)
Net change in unrealized gains and losses on investment securities (599)
Net issuance of restricted stock (140)
Restricted stock amortization 28
- - -----------------------------------------------------------------------------------------------
Balance, end of period (774)
- - -----------------------------------------------------------------------------------------------
Total common stockholders' equity and common shares outstanding $8,053 325,596
================================================================================================================
Total stockholders' equity $8,853
==============================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
5
<PAGE>
<TABLE> <CAPTION>
The Travelers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In millions of dollars)
Three months ended March 31, 1994 1993
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Income before income taxes, minority interest and cumulative effect of changes in
accounting principles $ 538 $ 334
Adjustments to reconcile income before income taxes, minority interest and cumulative effect
of changes in accounting principles to net cash provided by (used in) operating activities:
Amortization of deferred policy acquisition costs and value of insurance in force 205 67
Additions to deferred policy acquisition costs (250) (129)
Depreciation and amortization 74 19
Provision for credit losses 39 35
Undistributed equity earnings - (28)
Changes in:
Trading securities, net 37 (384)
Securities borrowed, loaned and repurchase agreements, net (1,210) 1,023
Brokerage receivables net of brokerage payables 1,032 (399)
Insurance policy and claims reserves 363 (9)
Other, net (515) 128
- - ----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operations 313 657
Income taxes paid (46) (52)
- - ----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 267 605
- - ----------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Loans originated or purchased (684) (541)
Loans repaid or sold 524 485
Purchases of investments (3,438) (714)
Proceeds from sales of investments:
Fixed maturities, equity securities and other 1,748 366
Mortgage loans 123 -
Real estate and real estate joint ventures 222 -
Proceeds from maturities of investments:
Fixed maturities, equity securities and other 1,450 299
Mortgage loans 411 -
Business divestments - 15
Other, net (29) 10
- - ----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities 327 (80)
- - ----------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Dividends paid (61) (32)
Treasury stock acquired (179) (2)
Issuance of long-term debt 450 200
Payments and redemptions of long-term debt (363) (29)
Net change in short-term borrowings (including investment banking and brokerage borrowings) (46) (367)
Contractholder fund deposits 751 -
Contractholder fund withdrawals (1,208) -
Other, net (1) (17)
- - ----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (657) (247)
- - ----------------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents (63) 278
Cash and cash equivalents at beginning of period 1,526 272
- - ----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 1,463 $ 550
- - ----------------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 206 $ 138
================================================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
6
<PAGE>
The Travelers Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions of dollars, except per share amounts)
1. Basis of Presentation
---------------------
The accompanying condensed consolidated financial statements
as of March 31, 1994 and for the three-month periods ended
March 31, 1994 and 1993 are unaudited and include the
accounts of The Travelers Inc. (the Company) and its
subsidiaries. Results of operations for the three-month
period ended March 31, 1993 relate only to Primerica
Corporation (Primerica), and do not include earnings related
to the acquisition of the approximately 73% of The Travelers
Corporation (old Travelers) common stock acquired in December
1993 or the earnings related to the domestic retail brokerage
and asset management businesses (the Shearson Businesses) of
Shearson Lehman Brothers Holdings Inc. acquired in July 1993.
In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair
presentation have been reflected. The accompanying condensed
consolidated financial statements should be read in
conjunction with the consolidated financial statements and
related notes included in the Company's Annual Report to
Stockholders for the year ended December 31, 1993.
Certain financial information that is normally included in
financial statements prepared in accordance with generally
accepted accounting principles but is not required for
interim reporting purposes has been condensed or omitted.
Certain reclassifications have been made to prior years'
financial statements to conform to the current year's
presentation.
FAS 115. Effective January 1, 1994, the Company adopted
Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities," which addresses accounting and reporting for
investments in equity securities that have a readily
determinable fair value and for all debt securities. Debt
securities that the Company has the positive intent and
ability to hold to maturity have been classified as "held to
maturity" and have been reported at amortized cost.
Securities that are not classified as "held to maturity" have
been classified as "available for sale" and are reported at
fair value, with unrealized gains and losses, net of income
taxes, charged or credited directly to stockholders' equity.
Initial adoption of this standard resulted in a net increase
of $214 (net of taxes) to net unrealized gains on investment
securities in stockholders' equity.
Interpretation 39. Effective January 1, 1994, the Company
adopted Financial Accounting Standards Board Interpretation
No. 39, "Offsetting of Amounts Related to Certain Contracts"
(Interpretation 39). The general principle of Interpretation
39 states that amounts due from and due to another party may
not be offset in the balance sheet unless a right of setoff
exists and the parties intend to exercise the right of
setoff. Implementation of Interpretation 39 did not have a
material impact on the Company's financial position; however,
assets and liabilities were increased by approximately
$3,000.
7
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
2. Business Acquisitions
----------------------
The Travelers Merger
On December 31, 1993, Primerica acquired the approximately
73% of old Travelers common stock it did not already own.
Old Travelers was merged into Primerica, and concurrently,
Primerica changed its name to The Travelers Inc.
The Shearson Acquisition
On July 31, 1993, the Company acquired the Shearson
Businesses and combined them with the operations of Smith
Barney, Harris Upham & Co. Incorporated. The combined firm
was named Smith Barney Shearson Inc., and is a subsidiary of
Smith Barney Shearson Holdings Inc. (SBS).
The unaudited pro forma condensed results of operations
presented below assume the above transactions had occurred at
the beginning of the period presented:
Three months ended
March 31,
1993
Pro Forma
-------------------------------------------------------
Revenues $4,840
======
Income before cumulative effect of
changes in accounting principles $ 392
======
Net income $ 357
======
Net income per share:
Before cumulative effect of changes in
accounting principles $ 1.16
======
Net income $ 1.05
======
The unaudited pro forma condensed financial information is
not necessarily indicative either of the results of
operations that would have occurred had these transactions
been consummated at the beginning of the period presented or
of future operations of the combined companies.
3. Debt
----
Short-term borrowings consisted of the following:
March 31, 1994 December 31, 1993
-------------- -----------------
Commercial paper
The Travelers Inc. $ 425 $ 329
Commercial Credit Company 2,483 2,206
The Travelers Insurance
Company 51 -
------ ------
$2,959 $2,535
===== =====
The Travelers Inc. (the Parent), Commercial Credit Company
(CCC) and The Travelers Insurance Company (TIC) issue
commercial paper directly to investors. Each maintains
unused credit availability under its respective bank lines of
credit at least equal to the amount of its outstanding
commercial paper. Each may borrow under its revolving credit
facilities at various interest rate options and compensates
the banks for the facilities through commitment fees. The
Parent and CCC have agreements with certain banks totaling
$800 whereby the Parent, with the consent of CCC, may assign
certain revolving credit amounts (swing facilities) to CCC for
specific periods of time. At
8
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
March 31, 1994 $550 was allocated to CCC. The Parent and TIC
have an agreement amounting to $275 with certain banks whereby
both the Parent and TIC may access a revolving credit
facility.
At March 31, 1994, the Parent had committed and available
revolving credit facilities of $525 (which includes $275 that
may be accessed by TIC) of which $75 expires in 1994 and $450
expires in 1995. At March 31, 1994, CCC had committed and
available revolving credit facilities of $2,670, of which $250
expires in 1994, $920 expires in 1995 and $1,500 expires in
1997.
Long-term debt, including its current portion consisted of the
following:
March 31, 1994 December 31, 1993
-------------- -----------------
The Travelers Inc. 1,396 1,504
Commercial Credit Company 3,726 3,970
Smith Barney Shearson 1,825 1,375
The Travelers Insurance Group Inc.
116 142
----- -----
$7,063 $6,991
===== =====
During the first quarter of 1994, Smith Barney Shearson
issued $200 of 5 1/2% Notes due January 15, 1999 and $200 of 6%
Notes due March 15, 1997.
Investment banking and brokerage borrowings consisted of the
following:
March 31, 1994 December 31, 1993
-------------- -----------------
Commercial paper $1,486 $1,401
Secured borrowings 180 105
Unsecured borrowings 703 693
Notes to LBI 615 1,255
--- -----
$2,984 $3,454
===== =====
Investment banking and brokerage borrowings are short-term
and include commercial paper, secured and unsecured bank
loans used to finance operations, including the securities
settlement process, and notes issued to Lehman Brothers
Holdings Inc. (LBI) in connection with the Shearson
Businesses acquired. The secured and unsecured bank loans
bear interest at fluctuating rates based primarily on the
federal funds interest rate. Notes payable to LBI at
December 31, 1993 included a $586 variable rate note which
was paid in January 1994, and was issued as partial payment
for the businesses acquired. Also included in notes payable
to LBI is a non-interest bearing note (the Clearing Note)
outstanding in connection with LBI's activities under the
Clearing Agreement. The Clearing Note, which matures upon
termination of the Clearing Agreement, fluctuates daily based
on LBI's borrowing activities. In 1993, SBS put in place a
$1,500 commercial paper program that consists of both
discounted and interest bearing paper. At March 31, 1994,
SBS had unused committed and available short-term lines of
credit amounting to $270. In addition, SBS has substantial
borrowing arrangements consisting of facilities that it has
been advised are available, but where no contractual lending
obligation exist.
4. Reinsurance
-----------
The Company's insurance operations cede insurance in order to
limit losses, reduce exposure on large risks, provide
additional capacity for future growth, and effect business
sharing arrangements. Life reinsurance is accomplished
through various plans of reinsurance, primarily coinsurance,
9
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
modified coinsurance and yearly renewable term. Property-
casualty reinsurance is placed on both a quota-share and
excess basis. The property-casualty insurance subsidiaries
also participate as a servicing carrier for, and a member of,
several pools and associations. Reinsurance ceded
arrangements do not discharge the insurance subsidiaries or
the Company as the primary insurer. Reinsurance amounts
included in the Condensed Consolidated Statement of Income
were as follows:
<TABLE> <CAPTION>
Ceded to
Gross Other Net
Amount Companies Amount
------ --------- ------
Three months ended March 31, 1994
---------------------------------
<S> <C> <C> <C>
Premiums
Life insurance $ 474 $(73) $ 401
Accident and health insurance 654 (20) 634
Warranty, property and casualty insurance 1,305 (341) 964
----- ---- -----
$2,433 $(434) $1,999
===== ==== =====
Claims $1,952 $(354) $1,598
===== ==== =====
Three months ended March 31, 1993
---------------------------------
Premiums
Life insurance $290 $ (69) $221
Accident and health insurance 86 (4) 82
Warranty, property and casualty insurance 110 (47) 63
--- ---- ---
$486 $(120) $366
=== ==== ===
Claims $265 $(72) $193
=== === ===
</TABLE>
5. Contingencies
-------------
Certain of the Company's subsidiaries are involved in
litigation with respect to claims arising with regard to
insurance, which is taken into account in establishing
benefit reserves. On insurance contracts written many years
ago, old Travelers continues to receive claims asserting
alleged injuries and damages from asbestos and other
hazardous and toxic substances. In relation to these claims,
the Company carries on a continuing review of its overall
position, its reserving techniques and reinsurance
recoverable. In each of these areas of exposure, the Company
has endeavored to litigate individual cases and settle claims
on favorable terms. Given the vagaries of court coverage
decisions, plaintiff's expanded theories of liability, the
risks inherent in major litigation and other uncertainties,
it is not presently possible to quantify the ultimate
exposure represented by these claims. As a result, the
Company expects that future earnings may be adversely
affected by environmental and asbestos claims, although the
amounts cannot be reasonably estimated. However, it is not
likely these claims will have a material adverse effect on
the Company's financial condition.
In the ordinary course of business the Company and/or its
subsidiaries are defendants or co-defendants in various
litigation matters. Although there can be no assurances, the
Company believes, based on information currently available,
that the ultimate resolution of these legal proceedings
(other than environmental and asbestos claims) would not be
likely to have, but may have, a material adverse effect on
the results of operations.
10
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION
and RESULTS of OPERATIONS
Consolidated Results of Operations
Three Months Ended
March 31,
(in millions, except per share 1994 1993
amounts)
Revenues $4,769 $1,302
====== ======
Income before cumulative effect of
changes in accounting principles $ 340 $ 207
====== ======
Earnings per share:
Before cumulative effect of changes
in accounting principles $ 0.98 $0.89
====== ======
Net income $ 0.98 $0.74
====== ======
Weighted average number of common
shares outstanding and common stock
equivalents 326.8 224.9
====== ======
The Travelers Merger
On December 31, 1993, Primerica Corporation (Primerica) acquired
the approximately 73% of The Travelers Corporation (old
Travelers) common stock it did not already own (the Merger). Old
Travelers was merged into Primerica, and concurrently, Primerica
changed its name to The Travelers Inc. which, together with its
subsidiaries, is hereinafter referred to as the Company. The old
Travelers businesses acquired are hereinafter referred to as old
Travelers or The Travelers Insurance Group.
The Shearson Acquisition
On July 31, 1993, the Company acquired the domestic retail
brokerage and asset management businesses (the Shearson
Businesses) of Shearson Lehman Brothers Holdings Inc., a
subsidiary of American Express Company. The businesses acquired
were combined with the operations of Smith Barney, Harris Upham &
Co. Incorporated, and the combined firm was named Smith Barney
Shearson Inc., which is a subsidiary of Smith Barney Shearson
Holdings Inc. (SBS).
Results of Operations
The discussion of results of operations for the three-month
period ended March 31, 1993 relates only to old Primerica (which
excludes old Travelers and the Shearson Businesses). The assets
and liabilities of old Travelers and the Shearson Businesses are
reflected in the Condensed Consolidated Statement of Financial
Position at December 31, 1993 on a fully consolidated basis.
Net income for the quarter ended March 31, 1994 includes reported
after-tax net portfolio losses of $3 million, compared to
previously reported after-tax portfolio gains of $24 million and
an after-tax gain of $4 million from the sale of the Company's
remaining interest in Fingerhut Companies, Inc. (Fingerhut) in
the prior year period.
Also included in net income for the 1993 period is an after-tax
charge of $18 million resulting from the adoption of Statement of
Financial Accounting Standards No. 112 (FAS 112), "Employers'
Accounting for Postemployment Benefits," and an after-tax charge
of $17 million resulting from the adoption of Statement of
Financial Accounting Standards No. 106 (FAS 106), "Employers'
Accounting for Postretirement Benefits Other Than Pensions."
11
<PAGE>
Excluding these items, earnings for the three months ended March
31, 1994 increased by $164 million, or 92%, over the 1993 period,
reflecting primarily increased operating earnings from Smith
Barney Shearson (including earnings associated with the Shearson
Businesses), improved performance at Consumer Finance Services
and the inclusion of the additional 73% interest in the earnings
of The Travelers Insurance Group acquired on December 31, 1993,
offset by increased corporate expenses related to acquisitions.
The following discussion presents in more detail each segment's
performance.
<TABLE> <CAPTION>
Segment Results for the Three Months Ended March 31, 1994 and 1993
------------------------------------------------------------------
Investment Services
Three Months Ended March 31,
---------------------------------------
($ in millions) 1994 1993
--------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Smith Barney Shearson $1,453 $145 $466 $55
Mutual funds and asset management 40 8 37 8
--------------------------------------------------------------------------------------------
Total Investment Services $1,493 $153 $503 $63
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
</TABLE>
The Company's Investment Services segment includes SBS -
investment banking and securities brokerage; American Capital
Management & Research, Inc. (American Capital) - mutual funds;
and a limited partnership interest in RCM Capital Management
(RCM) - asset management.
SBS's earnings increased significantly to $145 million in the
quarter ended March 31, 1994, which includes the results of the
Shearson Businesses. This compares to $55 million reported by
Smith Barney alone in the prior year period, reflecting strong
retail, institutional sales and trading and investment banking
activity.
Smith Barney Shearson Revenues
<TABLE> <CAPTION>
Three Months Ended March 31,
----------------------------
($ in millions) 1994 1993
--------------------------------------------------------------------
<S> <C> <C>
Commissions $ 608 $152
Investment banking 196 121
Principal trading 239 78
Asset management fees 182 22
Interest income, net* 72 34
Other income 53 4
--------------------------------------------------------------------
Net revenues* $1,350 $411
--------------------------------------------------------------------
</TABLE>
*Net of interest expense of $103 and $55 for the three month
periods ended March 31, 1994 and 1993, respectively. Revenues
included in the consolidated statement of income are before
deductions for interest expense.
12
<PAGE>
Revenues from investment banking increased 62%, as a result of
growth in merger and acquisition advisory activity and in the
number of public offerings underwritten. Revenues from principal
trading more than tripled to $239 million, reflecting across-the-
board growth, led by a four-fold increase in over-the-counter
activity.
Asset management fees increased significantly as assets under
management rose to $77.3 billion at March 31, 1994 (which
reflects $55 billion acquired in the Shearson Acquisition)
compared to $17.2 billion at March 31, 1993. Furthermore, fees
related to "wrap fee" managed accounts, which represent 62% of
asset management fees earned, increased significantly. "Wrap
fee" managed accounts consist of customer accounts paying a
single asset-based fee for multiple services which may include
brokerage, custody and advisory services. The increase resulted
from the discretionary "wrap fee" managed accounts acquired in
the Shearson Acquisition as well as internal growth. The
inclusion of the Shearson businesses also increased net interest
income to $72 million for the quarter ended March 31, 1994.
SBS's business is significantly affected by the levels of
activity in the securities markets which were favorable during
the first quarter of 1994. Many factors have an impact on the
securities markets including the level and trend of interest
rates, the general state of the economy and the national and
worldwide political environments. Activity in the securities
markets in April 1994 was weaker than in the first quarter.
Should this trend continue, results will be negatively affected.
Mutual Funds and Asset Management
Net income from the Company's mutual funds and asset management
operations in 1994 was about even with the prior year period,
reflecting increased volume-related marketing expenses. American
Capital's mutual fund sales (at net asset value) increased 25% to
$867 million for the three month period ended March 31, 1994
compared to $694 million in the prior year period.
<TABLE> <CAPTION>
Assets Under Management
Three Months Ended March 31,
---------------------------
($ in billions) 1994 1993
------------------------------------------------------------------------------
<S> <C> <C>
Smith Barney Shearson $ 77.3 $17.2
RCM Capital Management 23.8 23.9
American Capital (1) 16.5 15.4
Travelers Life and Annuities (2) 20.6 -
------------------------------------------------------------------------------
Total Assets Under Management $138.2 $56.5
------------------------------------------------------------------------------
</TABLE>
(1) Includes the assets of the Common Sense Trust, marketed by
Primerica Financial Services.
(2) Part of Life Insurance Services segment.
13
<PAGE>
Consumer Finance Services
<TABLE> <CAPTION>
Three Months Ended March 31,
----------------------------------------
($ in millions) 1994 1993
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues Net income Revenues Net income
-----------------------------------------------------------------------------------
Consumer Finance Services $300 $51 $285 $48
-----------------------------------------------------------------------------------
</TABLE>
The 6% increase in Consumer Finance net income in the first
quarter of 1994 over the same period last year reflects continued
growth in receivables outstanding to $6.445 billion (before
allowance for losses and accrued interest receivable) at the end
of the period. During the first three months of 1994, 31 new
branch offices were added, bringing the total to 799 at March 31,
1994. About 40 more offices are planned to be opened by year-end
1994.
Charge-offs remained at low levels for the 1994 period -- 2.26%
versus 2.61% in the prior year quarter, while the 60+ day
delinquencies hit a record low of 2.00% versus 2.36% in the prior
year period.
The average yield on the portfolio declined to 15.22% from
15.91%, although net margins rose to 8.51%. This reflects a
shift in product mix toward more variable rate loans and lower
funding costs.
<TABLE> <CAPTION>
As of, and for, the
Three Months Ended March 31,
----------------------------
1994 1993
----------------------------
<S> <C> <C>
Allowance for losses as % of
consumer finance receivables 2.64% 2.87%
Charge-off rate 2.26% 2.61%
60 + days past due on a contractual
basis as % of gross consumer
finance receivables at quarter end 2.00% 2.36%
</TABLE>
Life Insurance Services
<TABLE> <CAPTION>
Three Months Ended March 31,
------------------------------------------
($ in millions) 1994 1993
-----------------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Primerica Financial Services $ 317 $ 50 $297 $47
Travelers Life and Annuities (1) 546 42 90 16
Managed Care and Employee Benefits 914 33 - -
- - -----------------------------------------------------------------------------------------------------------
Total Insurance Services $1,777 $125 $387 $63
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net income includes $10 of reported portfolio gains in 1993.
The Life Insurance Services segment includes the results of
Primerica Financial Services (PFS) for both periods presented and
the results of the Travelers Life and Annuities and the Managed
Care
14
<PAGE>
and Employee Benefits segments of old Travelers for 1994 only,
which were acquired on December 31, 1993.
Travelers Life and Annuities consists principally of individual
products marketed under the Travelers name (which was the
Financial Services business of old Travelers) and the accident
and health operations of old Primerica, as well as group annuity
operations (which was the Asset Management & Pension Services
business of old Travelers).
Managed Care and Employee Benefits consists of the old Travelers
businesses that market group accident and health and life
insurance, managed health care programs, and administrative
services associated with employee benefit plans to customers
ranging from large multinational corporations to small local
employers.
Primerica Financial Services
During the first quarter of 1994 PFS issued 69,300 policies
totaling $13.2 billion in face amount of individual life
insurance, compared to 59,000 policies totaling $11.0 billion in
face amount in the corresponding 1993 period. Insurance in force
was $312.5 billion at March 31, 1994, up from $309.3 billion at
December 31, 1993, reflecting positive sales trends as well as
better policy persistency. PFS's earnings are significantly
affected by the levels of insurance in force, and it is likely
that results would be negatively impacted in future periods
should insurance in force experience a substantial decline.
PFS has traditionally offered mutual funds to customers as a way
for them to invest the savings obtained through relatively low
cost term life insurance as compared to traditional whole life
insurance. Sales of mutual funds during the first quarter of
1994 increased 24% to $366 million, compared to first quarter
1993 sales of $294 million. Assets under management in the
proprietary Common Sense(R) Trust family of funds totaled $3.3
billion. Net receivables from $.M.A.R.T. and S.A.F.E. consumer
loans were $866 million, up 60% from $542 million at the end of
the prior year period, reflecting recent record levels of new
loan volume.
Travelers Life and Annuities
Travelers Life and Annuities operations issued $2.4 billion of
face amount of individual life insurance for net written premiums
and deposits of $65.9 million, bringing total life insurance in
force to $46.0 billion. Individual annuity production was strong
during the first quarter of 1994, compared to the prior period
levels and recent experience, reflecting sales of variable
annuities. Net written premiums and deposits totaled $317.1
million in the 1994 period, bringing total policyholder account
balances and benefit reserves to $10.2 billion. Annuity sales
activity has been helped by the ratings upgrades that accompanied
the merger of Primerica and old Travelers. In the group annuity
business, net written premiums and deposits were $424.7 million,
bringing policyholder account balances and benefit reserves to
$13.2 billion. Net written premiums for individual accident and
health products, primarily long-term care and supplementary
products, totaled $81.7 million in the first quarter of 1994.
Managed Care and Employee Benefits
Net income for the Managed Care and Employee Benefits operations
reflects reduced operating expenses resulting from restructuring
initiatives and improved underwriting partially offset by a
decline in premiums, deposits and equivalents.
New business production (in terms of premiums and equivalents) in
the life and health areas was $500 million for the quarter ended
March 31, 1994, and represents a decline over old Travelers' 1993
first quarter. This decline reflects increased emphasis on
improvements in underwriting designed to reduce financial risk.
15
<PAGE>
In the group life business, net premiums written, deposits and
equivalents totaled $206 million for the quarter ended March 31,
1994. The overall competitive group life market, as well as
shifting buying patterns in the marketplace, have negatively
impacted group life business volumes. Face amount of group life
insurance issued for the first quarter 1994 was $4.5 billion
versus $4.9 billion in the 1993 period, resulting in total group
life insurance in force of $136.4 billion.
In the group health business, net premiums written, deposits and
equivalents were $2.4 billion for the quarter ended March 31,
1994 and reflect a continued shift to administrative services
products and the cancellation of a number of large contracts.
The total lives covered by medical plans declined to 5.7 million
from 6.2 million a year ago, although participation in the
managed care component rose 10%.
Property and Casualty Insurance Services
<TABLE> <CAPTION>
Three Months Ended March 31,
---------------------------------------------
($ in millions) 1994 1993
----------------------------------------------------------------------------------------------------
Net Net
Revenues income Revenues income
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial (1) $ 836 $43 $85 $16
Minority Interest - Gulf - - - (8)
Personal 366 10 - -
- - ----------------------------------------------------------------------------------------------------
Total Property and Casualty Insurance Services $1,202 $53 $85 $ 8
- - ----------------------------------------------------------------------------------------------------
</TABLE>
(1) Net income includes $5 of reported portfolio losses in 1994
and $9 of reported portfolio gains in 1993.
The Property and Casualty Insurance Services segment consists of
the business lines of old Travelers as well as Gulf Insurance
Group (Gulf). Segment earnings for 1993 include only Gulf.
Commercial Lines
Net written premiums and equivalents for the first quarter of
1994 were up 3.5% to $1.5 billion. A significant component of
Commercial Lines is the national accounts division, which
provides insurance coverages and services, primarily workers'
compensation, to large corporations. Although premiums and
equivalents combined were comparable with the year ago period,
the premium revenue for this business declined 28%. This decline
resulted from an ongoing shift from premium business into non
risk-bearing business and efforts to help customers control
their loss costs, which has helped to build a 95% customer
retention ratio.
Commercial Lines' agency business serves small and mid-sized
businesses through brokers and approximately 2,500 independent
agents. Net written premiums increased 6% to $433 million, as
growth in industry-specific programs more than offset continued
soft market conditions.
The combined ratio for Commercial Lines was 111.5% at March 31,
1994. This compares to a combined ratio of 96.4% in the
corresponding 1993 period, representing Gulf only. Included in
the first quarter of 1994 are after-tax catastrophe losses of
$20.3 million, net of reinsurance, resulting principally from
severe storms in the Northeast during the winter of 1994. These
losses were largely offset, however, by favorable loss
development in certain workers' compensation lines and residual
markets.
16
<PAGE>
Personal Lines
Net written premiums for the first quarter of 1994 were $361.9
million, and reflects strong growth in targeted regions as well
as in the non-standard auto market.
Operating earnings reflected $19.7 million of catastrophe losses
(after taxes and net of reinsurance) related to the severe storms
in the Northeast, which were partially offset by favorable loss
reserve development in 1994 on prior years' business. The unit
continues to actively manage and reduce its exposure to
windstorms and hurricanes.
Despite cost control efforts that produced a one percentage point
decrease in the expense ratio, the period's catastrophe losses
caused the combined ratio for Personal Lines to increase to
109.0%.
<TABLE> <CAPTION>
Corporate and Other
Three Months Ended March 31,
-------------------------------------------------------
($ in millions) 1994 1993
--------------------------------------------------------------------------------------------------
Net income Net income
Revenues (expense) Revenues (expense)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net expenses $(42) $(11)
Equity in income of old Travelers - 32
Gain on sales of stock of
subsidiaries and affiliates - 4
--------------------------------------------------------------------------------------------------
Total Corporate and Other $(3) $(42) $42 $ 25
--------------------------------------------------------------------------------------------------
</TABLE>
The increase in Corporate and Other net expenses for the first
quarter of 1994 is primarily attributable to the assumption by
the parent company of old Travelers corporate debt and certain
corporate expenses and interest costs related to the July 1993
Shearson acquisition.
Included in Corporate and Other net income in the 1993 period is
$32 million which represented the then-27% equity in the income
of old Travelers and was comprised of $22 million of operating
earnings and $10 million of realized portfolio gains. The 1993
net gain on sales of stock of subsidiaries and affiliates
resulted from the sale of the Company's remaining interest in
Fingerhut.
Liquidity and Capital Resources
The Travelers Inc. (the Parent) services its obligations (i.e.,
debt service and dividends) primarily with dividends and other
advances that it receives from subsidiaries. The subsidiaries'
dividend paying ability is limited by certain covenant
restrictions in bank and/or credit agreements and/or by
regulatory requirements. The Parent believes it will have
sufficient funds to meet current and future commitments. Each of
the Company's major operating subsidiaries finances its
operations on a stand-alone basis consistent with its
capitalization and ratings.
The Parent
The Parent issues commercial paper directly to investors and
maintains unused credit availability under committed revolving
credit agreements at least equal to the amount of commercial
paper outstanding.
As of May 13, 1994, the Parent had $800 million available for
debt offerings under its shelf registration statement.
17
<PAGE>
As of March 31, 1994, the Parent had unused credit availability
of $525 million, of which up to $275 million may be accessed by
either the Parent or The Travelers Insurance Company, an indirect
subsidiary. The Parent may borrow under its revolving credit
facilities at various interest rate options and compensates the
banks for the facilities through commitment fees.
Commercial Credit Company (CCC)
CCC also issues commercial paper directly to investors and
maintains unused credit availability under committed revolving
credit agreements at least equal to the amount of commercial
paper outstanding. As of March 31, 1994, CCC had unused credit
availability of $2.670 billion. CCC may borrow under its
revolving credit facilities at various interest rate options and
compensates the banks for the facilities through commitment fees.
As of May 13, 1994, CCC had $850 million available for debt
offerings under its shelf registration statement.
Smith Barney Shearson Holdings Inc. (SBS)
SBS funds its day to day operations through the use of commercial
paper, collateralized and uncollateralized bank borrowings (both
committed and uncommitted), internally generated funds,
repurchase transactions, and securities lending arrangements.
The volume of SBS's borrowings generally fluctuates in response
to changes in the amount of reverse repurchase transactions
outstanding, the level of securities inventories, customer
balances and securities borrowing transactions. SBS has a
commitment from a bank syndicate for an $825 million revolving
credit facility, which consists of a 364-day revolving credit
facility in the amount of $200 million and a three-year revolving
credit facility in the amount of $625 million, both of which were
fully utilized at March 31, 1994. SBS also had unused committed
and available short-term lines of credit amounting to $270
million. In addition, SBS has substantial borrowing arrangements
consisting of facilities that it has been advised are available,
but where no contractual lending obligations exist.
SBS, through its subsidiary Smith Barney Shearson Inc., issues
commercial paper directly to investors. As a policy, SBS
maintains sufficient borrowing power of unencumbered securities
to cover unsecured borrowings and unsecured letters of credit.
In addition, SBS monitors its leverage and capital ratios on a
daily basis.
During 1994, SBS completed the following debt offerings and, as
of May 9, 1994, had $1.0 billion available for debt offerings
under its shelf registration statements:
- 5 1/2% Notes due January 15, 1999 $200 million
- 6% Notes due March 15, 1997 $200 million
The Travelers Insurance Group
At March 31, 1994, The Travelers Insurance Group had $24.4
billion of life and annuity product deposit funds and reserves.
Of that total, $11.5 billion are not subject to discretionary
withdrawal based on contract terms. The remaining $12.9 billion
are for life and annuity products that are subject to
discretionary withdrawal by the contractholder. Included in the
amount that is subject to discretionary withdrawal is $2.7
billion of liabilities that are surrenderable with market value
adjustments. An additional $5.7 billion of the life insurance
and individual annuity liabilities, subject to discretionary
withdrawal, have an average surrender charge of 5.3% and $1.5
billion of liabilities are surrenderable at book value over 5 to
10 years. In the payout phase, these funds are credited at
significantly reduced interest rates.
The remaining $3.0 billion of liabilities are surrenderable
without charge. More than half of these relate to individual
life products. These risks would have to be underwritten again
if transferred to another carrier, which is considered a
significant deterrent against withdrawal by long-term
policyholders.
18
<PAGE>
Insurance liabilities that are surrendered or withdrawn from The
Travelers Insurance Group are reduced by outstanding policy loans
and related accrued interest prior to payout.
The Travelers Insurance Company (TIC), a direct subsidiary of The
Travelers Insurance Group Inc., issues commercial paper to
investors and maintains unused committed, revolving credit
facilities at least equal to the amount of commercial paper
outstanding. As of March 31, 1994, TIC has unused credit
availability of $275 million, all of which may be accessed by
either TIC or the Parent.
As part of the process of accreditation by the National
Association of Insurance Commissioners, state insurance
regulators have been recommending the adoption of new statutory
standards for the payment of dividends by insurance companies
without prior approval. As part of this effort, the Connecticut
General Assembly passed legislation in 1992 which is effective
for dividends paid on and after December 1, 1993. Under this
legislation, statutory surplus of The Travelers Insurance Group
is not available in 1994 for dividends to the Parent without
prior approval.
Investment Portfolio
The Company's $41 billion investment portfolio consists primarily
of fixed income investments with an average quality rating of A1.
The average duration of the fixed income portfolio, including
short-term fixed income investments, is 4.8 years.
The mortgage loans and real estate that comprise a large part of
the portfolio supporting the company's "Travelers Life and
Annuities" segment are down to $7.7 billion at March 31, 1994
versus $8.4 billion at year-end 1993. Underperforming mortgages
and real estate accounted for $2.2 billion of the total at March
31, 1994, down from $2.5 billion at year-end 1993.
The Company is continuing to maintain a brisk program of real
estate sales, with the goal of reducing its exposure to a level
that would not be considered meaningful in relation to the size
of its equity base. Proceeds from the sales of real estate, real
estate joint ventures, and mortgage loans (including discounted
payoffs) during the first quarter of 1994 amounted to
approximately $345 million.
Accounting Standards Not Yet Adopted
FAS 114
Statement of Financial Accounting Standards No. 114, "Accounting
by Creditors for Impairment of a Loan," describes how impaired
loans should be measured when determining the amount of a loan
loss accrual. The Statement also amends existing guidance on the
measurement of restructured loans in a troubled debt
restructuring involving a modification of terms. The Company has
not yet determined the impact, if any, this statement will have
on its financial statements. The Statement has an effective date
of January 1, 1995.
19
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
For information concerning a purported class action against the Company and
others in connection with certain changes in the retirement
benefits of retirees of Primerica Corporation, a New Jersey
corporation formerly known as American Can Company, see the
description that appears in the fourth paragraph of page 31 of
the Company's filing on Form 10-K for the year ended December 31,
1989, and the description that appears in the fourth full
paragraph of page 26 of the Company's filing on Form 10-K for the
year ended December 31, 1991, which descriptions are incorporated
by reference herein. A copy of the pertinent paragraphs of such
filings is included as an exhibit to this Form 10-Q. In June
1992, the United States Court of Appeals for the Third Circuit
reversed the trial court's grant of summary judgment in favor of
the Company and the other defendants in the class action, and
remanded the case to the District Court to determine certain
factual matters. The trial is expected to begin in May 1994.
The Securities and Exchange Commission (the "Commission")
has conducted a nonpublic inquiry pursuant to an order of
investigation with respect to the accounting, reporting and
disclosure treatment of The Travelers Corporation in connection
with its lending and loss recognition practices pertaining to
real estate investments and related matters going back to January
1, 1988. The Travelers Corporation was merged into the Company
on December 31, 1993. In May 1994, The Travelers Corporation and
The Travelers Insurance Company entered into an agreement with
the Commission requiring them to restate their consolidated
financial statements for the fiscal year ended December 31, 1989.
The restatement will modify the companies' implementation in 1989
of Statement of Financial Accounting Standards No. 97, applicable
to insurance companies in accounting for certain products and
realized gains and losses. The consolidated balance sheets of
the companies at December 31, 1989 will not change as a result of
the restatement. The agreement does not affect the Company's
consolidated financial statements.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Stockholders was held on
April 27, 1994. At the meeting, (i) seven persons were elected
as Class III directors of the Company, (ii) the selection of KPMG
Peat Marwick to serve as the independent auditors of the Company
for 1994 was ratified, (iii) the Employee Discount Stock Purchase
Plan, pursuant to which eligible employees can purchase shares of
Common Stock of the Company at a discount, was approved and
adopted and (iv) the Executive Performance Compensation Plan,
which establishes performance criteria for determining the
maximum amount of bonus compensation available for the chief
executive officer and the four other most highly compensated
executive officers of the Company and its subsidiaries, was
approved and adopted. The number of votes cast for, against or
withheld, and the number of abstentions with respect to each such
matter is set forth below. There were no broker non-votes in
connection with the matters voted upon at the meeting.
20
<PAGE>
<TABLE> <CAPTION>
For Against/Withheld Abstained
--- ---------------- ---------
Election of Directors:
Nominee
----------------------
<S> <C> <C> <C>
Douglas D. Danforth 273,677,582 2,598,313
Robert F. Daniell 273,729,368 2,546,527
Leslie B. Disharoon 273,881,264 2,394,631
Gerald R. Ford 271,150,211 5,125,684
Robert I. Lipp 271,596,382 4,679,513
Andrall E. Pearson 271,698,328 4,577,567
Linda J. Wachner 271,104,322 5,171,573
Ratification of Auditors: 273,735,690 1,347,429 1,192,776
Approval of Employee
Discount Stock Purchase
Plan: 268,585,929 6,109,096 1,580,870
Approval of Executive
Performance
Compensation Plan: 258,163,842 15,598,848 2,513,205
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See Exhibit Index.
(b) Reports on Form 8-K:
On January 13, 1994, the Company filed a Current
Report on Form 8-K, dated December 31, 1993, reporting under Item 2
thereof the consummation of its merger with The Travelers
Corporation and including under Item 7 thereof certain financial
information.
On January 26, 1994, the Company filed a Current
Report on Form 8-K, dated January 24, 1994, reporting under Item
5 thereof the results of its operations for the three months and
twelve months ended December 31, 1993, and certain other selected
financial data.
On March 1, 1994, the Company filed a Current
Report on Form 8-K, dated March 1, 1994, reporting under Item 5
thereof the status of certain legal proceedings involving the
Company.
No other Current Reports on Form 8-K were filed
during the quarter ended March 31, 1994.
21
<PAGE>
<TABLE> <CAPTION>
EXHIBIT INDEX
-------------
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
3.01 Restated Certificate of Incorporation of The Travelers Inc. (the Electronic
"Company") and Certificate of Designation of Cumulative Adjustable Rate
Preferred Stock, Series Y.
3.02 By-Laws of The Travelers Inc. as amended through April 27, 1994. Electronic
10.01 Employment Protection Agreement, dated as of December 31, 1987, between
the Company (as successor to Commercial Credit Company ("CCC")), and
Sanford I. Weill, incorporated by reference to Exhibit 10.03 to CCC's
Annual Report on Form 10-K for the fiscal year ended December 31, 1987
(File No. 1-6594).
10.02.1 Stock Option Plan of the Company, as amended through April 26, 1989,
incorporated by reference to Annex A to the prospectus contained in the
Company's Registration Statement on Form S-8 (No. 33-29711).
10.02.2 Amendment to the Company's Stock Option Plan, dated October 23, 1991,
incorporated by reference to Exhibit 10.02.2 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1991 (File
No. 1-9924) (the "Company's 1991 10-K").
10.02.3 Amendments to the Company's Stock Option Plan, approved by the
Company's stockholders on April 22, 1992, incorporated by reference to
Exhibit 10.02.3 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 (File No.1-9924) (the "Company's
1992 10-K").
10.02.4 Amendment to the Company's Stock Option Plan, dated July 22, 1992,
incorporated by reference to Exhibit 10.02.4 to the Company's 1992 10-K.
10.02.5 Amendment No. 11 to the Company's Stock Option Plan,
incorporated by reference to Exhibit 10.02.5 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 (File No. 1-9924)
(the "Company's 1993 10-K").
22
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.02.6 Amendment No. 12 to the Company's Stock Option Plan,
incorporated by reference to Exhibit 10.02.6 to the
Company's 1993 10-K.
10.03 Retirement Benefit Equalization Plan of the Company (as successor to
Primerica Holdings, Inc.), as amended,
incorporated by reference to Exhibit 10.03 to the Company's
1993 10-K.
10.04 Letter Agreement between Joseph A. Califano, Jr. and the Company, dated
December 14, 1988, incorporated by reference to Exhibit 10.21.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1988 (File No. 1-9924) (the "Company's 1988 10-K").
10.05.1 The Company's Deferred Compensation Plan for Directors, incorporated by
reference to Exhibit 10.21.2 to the Company's 1988 10-K.
10.05.2 Amendment to the Company's Deferred Compensation Plan for Directors,
dated July 22, 1992, incorporated by reference to Exhibit 10.06.2 of
the Company's 1992 10-K.
10.06.1 Supplemental Retirement Plan of the Company, incorporated by reference
to Exhibit 10.23 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990 (File No. 1-9924) (the "Company's
1990 10-K").
10.06.2 Amendment to the Company's Supplemental Retirement Plan,
incorporated by reference to Exhibit 10.06.2 to the
Company's 1993 10-K.
10.07 Long-Term Incentive Plan of the Company, as amended, incorporated by
reference to Exhibit 10.08 to the Company's 1992 10-K.
10.08.1 Capital Accumulation Plan of the Company (the "CAP Plan"), as amended
to January 31, 1993, incorporated by reference to Exhibit 10.09 to the
Company's 1992 10-K.
10.08.2 Amendment No. 8 to the Company's CAP Plan, incorporated
by reference to Exhibit 10.08.2 to the Company's 1993 10-K.
23
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.09.1 Employment Agreement dated as of December 16, 1988 among Smith Barney
Shearson Inc. (formerly Smith Barney, Harris Upham & Co. Incorporated;
hereinafter "SBS"), the Company and Frank G. Zarb (the "FGZ Employment
Agreement"), incorporated by reference to Exhibit 10.01 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1989 (File No. 1-9924).
10.09.2 Assignment Agreement and Amendment No. One to FGZ Employment Agreement,
incorporated by reference to Exhibit 10.09.2 to the Company's 1993 10-K.
10.10 Restated Stockholder Rights and Support Agreement dated as of November
1, 1989 by and among the Company and Arthur L. Williams, Jr., Angela
H. Williams, A.L. Williams & Associates, Inc. and The A.L. Williams &
Associates, Inc. Pension and Profit Sharing Plan, incorporated by
reference to Exhibit 10.13 to the Company's 1990 10-K.
10.11 Amended and Restated Exclusive Marketing Agreement dated as of November
1, 1989 by and among the Company, A.L. Williams & Associates, Inc. and
Arthur L. Williams, Jr., incorporated by reference to Exhibit 10.14 to
the Company's 1990 10-K.
10.12 Restated Second Amended General Agency Agreement ("SAGAA") dated as of
November 1, 1989 by and among Primerica Life Insurance Company
(formerly Massachusetts Indemnity Life Insurance Company; hereinafter
"Primerica Life"), A.L. Williams & Associates, Inc. and Arthur L.
Williams, Jr., incorporated by reference to Exhibit 10.15 to the
Company's 1990 10-K.
10.13 Restated First Amendment to SAGAA dated as of November 1, 1989 by and
among Primerica Life, A.L. Williams & Associates, Inc. and Arthur L.
Williams, Jr., incorporated by reference to Exhibit 10.16 to the
Company's 1990 10-K.
10.14 Restated and Amended Agreement of Charles D. Adams dated as of November
1, 1989 for the benefit of each of the Company, A.L. Williams &
Associates, Inc. and The A.L. Williams Corporation, incorporated by
reference to Exhibit 10.17 to the Company's 1990 10-K.
24
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.15 Restated and Amended Agreement of Angela H. Williams dated as of
November 1, 1989 for the benefit of each of the Company, A.L. Williams
& Associates, Inc. and The A.L. Williams Corporation, incorporated by
reference to Exhibit 10.18 to the Company's 1990 10-K.
10.16.1 Asset Purchase Agreement dated as of March 12, 1993, by and among
Shearson Lehman Brothers Inc., SBS, the Company, American Express
Company and Shearson Lehman Brothers Holdings Inc. (the "SLB
Agreement"), incorporated by reference to Exhibit 10.21 to the
Company's 1992 10-K.
10.16.2 Amendment No. 1, dated as of July 31, 1993, to the SLB Agreement,
incorporated by reference to Exhibit 10.01 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1993 (File
No. 1-9924) (the "Company's June 30, 1993 10-Q").
10.16.3 Amendment No. 2 dated as of July 31, 1993, to the SLB Agreement,
incorporated by reference to Exhibit 10.02 to the Company's June 30,
1993 10-Q.
10.17.1 Employment Agreement dated June 23, 1993, by and among SBS, the Company
and Robert F. Greenhill (the "RFG Employment Agreement"), incorporated
by reference to Exhibit 10.01 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1993 (File No. 1-9924)
(the "Company's September 30, 1993 10-Q").
10.17.2 Amendment to the RFG Employment Agreement. Electronic
10.18 Memorandum of Sale dated June 23, 1993, between the Company and Robert
F. Greenhill, incorporated by reference to Exhibit 10.02 to the
Company's September 30, 1993 10-Q.
10.19 Registration Rights Agreement dated June 23, 1993, between the Company
and Robert F. Greenhill, incorporated by reference to Exhibit 10.03 to
the Company's September 30, 1993 10-Q.
10.20 Restricted Shares Agreement dated June 23, 1993, by and between the
Company and Robert F. Greenhill, incorporated by reference to Exhibit
10.04 to the Company's September 30, 1993 10-Q.
25
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.21 Agreement and Plan of Merger, dated as of September 23, 1993, between
the Company and The Travelers Corporation ("old Travelers"),
incorporated by reference to Exhibit 2.1 to the Current Report on Form
8-K of old Travelers, dated September 23, 1993 and filed with the
Commission on October 8, 1993 (File No. 1-5799).
10.22 Agreement dated December 21, 1993 between the Company and Edward H.
Budd, incorporated by reference to Exhibit 10.22 to the Company's 1993
10-K.
10.23 Employment Agreement dated December 31, 1993 between The Travelers
Insurance Group Inc. and Richard H. Booth, incorporated by reference
to Exhibit 10.23 to the Company's 1993 10-K.
10.24 Employment Agreement dated December 31, 1993 between The Travelers
Insurance Group Inc. and Robert W. Crispin, incorporated by reference
to Exhibit 10.24 to the Company's 1993 10-K.
10.25 The Travelers Corporation 1982 Stock Option Plan, as amended January
10, 1992, incorporated by reference to Exhibit 10(a) to the Annual
Report on Form 10-K of old Travelers for the fiscal year ended December
31, 1991 (File No. 1-5799) (the "old Travelers' 1991 10-K").
10.26 The Travelers Corporation 1988 Stock Incentive Plan, as amended April
7, 1992, incorporated by reference to Exhibit 10(b) to the Annual
Report on Form 10-K of old Travelers for the fiscal year ended December
31, 1992 (File No. 1-5799) (the "old Travelers' 1992 10-K").
10.27 The Travelers Corporation 1984 Management Incentive Plan, as amended
effective January 1, 1991, incorporated by reference to Exhibit 10(c)
to the Annual Report on Form 10-K of old Travelers for the fiscal year
ended December 31, 1990 (File No. 1-5799).
10.28 The Travelers Corporation Supplemental Benefit Plan, effective December
20, 1992, incorporated by reference to Exhibit 10(d) to the Annual
Report on the old Travelers' 1992 10-K.
26
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.29 The Travelers Corporation TESIP Restoration and Non-
Qualified Savings Plan, effective January 1, 1991,
incorporated by reference to Exhibit 10(e) to the old Travelers'
1991 10-K.
10.30 The Travelers Severance Plan of Officers, as amended
September 23, 1993, incorporated by reference to Exhibit
10.30 to the Company's 1993 Form 10-K.
10.31 The Travelers Corporation Directors' Deferred Compensation
Plan, as amended November 7, 1986, incorporated by
reference to Exhibit 10(d) to the Annual Report on Form 10-K
of old Travelers for the fiscal year ended December 31, 1986
(File No. 1-5799).
11.01 Computation of Earnings Per Share. Electronic
12.01 Computation of Ratio of Earnings to Fixed Charges. Electronic
99.01 Fourth paragraph of page 31 of the Company's filing on Form 10-K for Electronic
the year ended December 31, 1989, and fourth full paragraph of page 26
of the Company's 1991 10-K.
The total amount of securities authorized pursuant to any instrument defining rights of
holders of long-term debt of the Company does not exceed 10% of the total assets of the
Company and its consolidated subsidiaries. The Company will furnish copies of any such
instrument to the Securities and Exchange Commission upon request.
</TABLE>
27
<PAGE>
SIGNATURES
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 thereunto duly authorized.
The Travelers Inc.
Date: May 13, 1994 By /s/ James Dimon
------------------------------
James Dimon
President and
Chief Financial Officer
(Principal Financial Officer)
Date: May 13, 1994 By /s/ Irwin Ettinger
-------------------------------
Irwin Ettinger
Senior Vice President
(Chief Accounting Officer)
28
<PAGE>
<TABLE> <CAPTION>
EXHIBIT INDEX
-------------
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
3.01 Restated Certificate of Incorporation of The Travelers Inc. (the Electronic
"Company") and Certificate of Designation of Cumulative Adjustable Rate
Preferred Stock, Series Y.
3.02 By-Laws of The Travelers Inc. as amended through April 27, 1994. Electronic
10.01 Employment Protection Agreement, dated as of December 31, 1987, between
the Company (as successor to Commercial Credit Company ("CCC")), and
Sanford I. Weill, incorporated by reference to Exhibit 10.03 to CCC's
Annual Report on Form 10-K for the fiscal year ended December 31, 1987
(File No. 1-6594).
10.02.1 Stock Option Plan of the Company, as amended through April 26, 1989,
incorporated by reference to Annex A to the prospectus contained in the
Company's Registration Statement on Form S-8 (No. 33-29711).
10.02.2 Amendment to the Company's Stock Option Plan, dated October 23, 1991,
incorporated by reference to Exhibit 10.02.2 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1991 (File
No. 1-9924) (the "Company's 1991 10-K").
10.02.3 Amendments to the Company's Stock Option Plan, approved by the
Company's stockholders on April 22, 1992, incorporated by reference to
Exhibit 10.02.3 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 (File No.1-9924) (the "Company's
1992 10-K").
10.02.4 Amendment to the Company's Stock Option Plan, dated July 22, 1992,
incorporated by reference to Exhibit 10.02.4 to the Company's 1992 10-K.
10.02.5 Amendment No. 11 to the Company's Stock Option Plan,
incorporated by reference to Exhibit 10.02.5 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 (File No. 1-9924)
(the "Company's 1993 10-K").
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.02.6 Amendment No. 12 to the Company's Stock Option Plan,
incorporated by reference to Exhibit 10.02.6 to the
Company's 1993 10-K.
10.03 Retirement Benefit Equalization Plan of the Company (as successor to
Primerica Holdings, Inc.), as amended,
incorporated by reference to Exhibit 10.03 to the Company's
1993 10-K.
10.04 Letter Agreement between Joseph A. Califano, Jr. and the Company, dated
December 14, 1988, incorporated by reference to Exhibit 10.21.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1988 (File No. 1-9924) (the "Company's 1988 10-K").
10.05.1 The Company's Deferred Compensation Plan for Directors, incorporated by
reference to Exhibit 10.21.2 to the Company's 1988 10-K.
10.05.2 Amendment to the Company's Deferred Compensation Plan for Directors,
dated July 22, 1992, incorporated by reference to Exhibit 10.06.2 of
the Company's 1992 10-K.
10.06.1 Supplemental Retirement Plan of the Company, incorporated by reference
to Exhibit 10.23 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990 (File No. 1-9924) (the "Company's
1990 10-K").
10.06.2 Amendment to the Company's Supplemental Retirement Plan,
incorporated by reference to Exhibit 10.06.2 to the
Company's 1993 10-K.
10.07 Long-Term Incentive Plan of the Company, as amended, incorporated by
reference to Exhibit 10.08 to the Company's 1992 10-K.
10.08.1 Capital Accumulation Plan of the Company (the "CAP Plan"), as amended
to January 31, 1993, incorporated by reference to Exhibit 10.09 to the
Company's 1992 10-K.
10.08.2 Amendment No. 8 to the Company's CAP Plan, incorporated
by reference to Exhibit 10.08.2 to the Company's 1993 10-K.
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.09.1 Employment Agreement dated as of December 16, 1988 among Smith Barney
Shearson Inc. (formerly Smith Barney, Harris Upham & Co. Incorporated;
hereinafter "SBS"), the Company and Frank G. Zarb (the "FGZ Employment
Agreement"), incorporated by reference to Exhibit 10.01 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1989 (File No. 1-9924).
10.09.2 Assignment Agreement and Amendment No. One to FGZ Employment Agreement,
incorporated by reference to Exhibit 10.09.2 to the Company's 1993 10-K.
10.10 Restated Stockholder Rights and Support Agreement dated as of November
1, 1989 by and among the Company and Arthur L. Williams, Jr., Angela
H. Williams, A.L. Williams & Associates, Inc. and The A.L. Williams &
Associates, Inc. Pension and Profit Sharing Plan, incorporated by
reference to Exhibit 10.13 to the Company's 1990 10-K.
10.11 Amended and Restated Exclusive Marketing Agreement dated as of November
1, 1989 by and among the Company, A.L. Williams & Associates, Inc. and
Arthur L. Williams, Jr., incorporated by reference to Exhibit 10.14 to
the Company's 1990 10-K.
10.12 Restated Second Amended General Agency Agreement ("SAGAA") dated as of
November 1, 1989 by and among Primerica Life Insurance Company
(formerly Massachusetts Indemnity Life Insurance Company; hereinafter
"Primerica Life"), A.L. Williams & Associates, Inc. and Arthur L.
Williams, Jr., incorporated by reference to Exhibit 10.15 to the
Company's 1990 10-K.
10.13 Restated First Amendment to SAGAA dated as of November 1, 1989 by and
among Primerica Life, A.L. Williams & Associates, Inc. and Arthur L.
Williams, Jr., incorporated by reference to Exhibit 10.16 to the
Company's 1990 10-K.
10.14 Restated and Amended Agreement of Charles D. Adams dated as of November
1, 1989 for the benefit of each of the Company, A.L. Williams &
Associates, Inc. and The A.L. Williams Corporation, incorporated by
reference to Exhibit 10.17 to the Company's 1990 10-K.
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.15 Restated and Amended Agreement of Angela H. Williams dated as of
November 1, 1989 for the benefit of each of the Company, A.L. Williams
& Associates, Inc. and The A.L. Williams Corporation, incorporated by
reference to Exhibit 10.18 to the Company's 1990 10-K.
10.16.1 Asset Purchase Agreement dated as of March 12, 1993, by and among
Shearson Lehman Brothers Inc., SBS, the Company, American Express
Company and Shearson Lehman Brothers Holdings Inc. (the "SLB
Agreement"), incorporated by reference to Exhibit 10.21 to the
Company's 1992 10-K.
10.16.2 Amendment No. 1, dated as of July 31, 1993, to the SLB Agreement,
incorporated by reference to Exhibit 10.01 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1993 (File
No. 1-9924) (the "Company's June 30, 1993 10-Q").
10.16.3 Amendment No. 2 dated as of July 31, 1993, to the SLB Agreement,
incorporated by reference to Exhibit 10.02 to the Company's June 30,
1993 10-Q.
10.17.1 Employment Agreement dated June 23, 1993, by and among SBS, the Company
and Robert F. Greenhill (the "RFG Employment Agreement"), incorporated
by reference to Exhibit 10.01 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1993 (File No. 1-9924)
(the "Company's September 30, 1993 10-Q").
10.17.2 Amendment to the RFG Employment Agreement. Electronic
10.18 Memorandum of Sale dated June 23, 1993, between the Company and Robert
F. Greenhill, incorporated by reference to Exhibit 10.02 to the
Company's September 30, 1993 10-Q.
10.19 Registration Rights Agreement dated June 23, 1993, between the Company
and Robert F. Greenhill, incorporated by reference to Exhibit 10.03 to
the Company's September 30, 1993 10-Q.
10.20 Restricted Shares Agreement dated June 23, 1993, by and between the
Company and Robert F. Greenhill, incorporated by reference to Exhibit
10.04 to the Company's September 30, 1993 10-Q.
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.21 Agreement and Plan of Merger, dated as of September 23, 1993, between
the Company and The Travelers Corporation ("old Travelers"),
incorporated by reference to Exhibit 2.1 to the Current Report on Form
8-K of old Travelers, dated September 23, 1993 and filed with the
Commission on October 8, 1993 (File No. 1-5799).
10.22 Agreement dated December 21, 1993 between the Company and Edward H.
Budd, incorporated by reference to Exhibit 10.22 to the Company's 1993
10-K.
10.23 Employment Agreement dated December 31, 1993 between The Travelers
Insurance Group Inc. and Richard H. Booth, incorporated by reference
to Exhibit 10.23 to the Company's 1993 10-K.
10.24 Employment Agreement dated December 31, 1993 between The Travelers
Insurance Group Inc. and Robert W. Crispin, incorporated by reference
to Exhibit 10.24 to the Company's 1993 10-K.
10.25 The Travelers Corporation 1982 Stock Option Plan, as amended January
10, 1992, incorporated by reference to Exhibit 10(a) to the Annual
Report on Form 10-K of old Travelers for the fiscal year ended December
31, 1991 (File No. 1-5799) (the "old Travelers' 1991 10-K").
10.26 The Travelers Corporation 1988 Stock Incentive Plan, as amended April
7, 1992, incorporated by reference to Exhibit 10(b) to the Annual
Report on Form 10-K of old Travelers for the fiscal year ended December
31, 1992 (File No. 1-5799) (the "old Travelers' 1992 10-K").
10.27 The Travelers Corporation 1984 Management Incentive Plan, as amended
effective January 1, 1991, incorporated by reference to Exhibit 10(c)
to the Annual Report on Form 10-K of old Travelers for the fiscal year
ended December 31, 1990 (File No. 1-5799).
10.28 The Travelers Corporation Supplemental Benefit Plan, effective December
20, 1992, incorporated by reference to Exhibit 10(d) to the Annual
Report on the old Travelers' 1992 10-K.
<PAGE>
<CAPTION>
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
<S> <C> <C>
10.29 The Travelers Corporation TESIP Restoration and Non-
Qualified Savings Plan, effective January 1, 1991,
incorporated by reference to Exhibit 10(e) to the old Travelers'
1991 10-K.
10.30 The Travelers Severance Plan of Officers, as amended
September 23, 1993, incorporated by reference to Exhibit
10.30 to the Company's 1993 Form 10-K.
10.31 The Travelers Corporation Directors' Deferred Compensation
Plan, as amended November 7, 1986, incorporated by
reference to Exhibit 10(d) to the Annual Report on Form 10-K
of old Travelers for the fiscal year ended December 31, 1986
(File No. 1-5799).
11.01 Computation of Earnings Per Share. Electronic
12.01 Computation of Ratio of Earnings to Fixed Charges. Electronic
99.01 Fourth paragraph of page 31 of the Company's filing on Form 10-K for Electronic
the year ended December 31, 1989, and fourth full paragraph of page 26
of the Company's 1991 10-K.
The total amount of securities authorized pursuant to any instrument defining rights of
holders of long-term debt of the Company does not exceed 10% of the total assets of the
Company and its consolidated subsidiaries. The Company will furnish copies of any such
instrument to the Securities and Exchange Commission upon request.
</TABLE>
Exhibit 3.01
RESTATED
CERTIFICATE OF INCORPORATION
OF
THE TRAVELERS INC.
The Travelers Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:
The name of the corporation is The Travelers Inc.
(hereinafter the "Corporation") and the date of filing of its original
Certificate of Incorporation with the Delaware Secretary of State is March
8, 1988. The name under which the Corporation filed its Certificate of
Incorporation is Commercial Credit Group, Inc.
The text of the Certificate of Incorporation as amended or
supplemented heretofore is hereby restated and integrated, but not amended,
to read as herein set forth in full:
FIRST: The name of the Corporation is:
THE TRAVELERS INC.
SECOND: The registered office of the Corporation is to be located at
the Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, in the county of New Castle, in the State of Delaware. The
name of its registered agent at that address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is:
To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: A. The total number of shares of Common Stock which the
Corporation shall have authority to issue is Five Hundred Million
(500,000,000) shares of Common Stock having a par value of one cent ($.01)
per share. The total number of shares of Preferred Stock which the
Corporation shall have the authority to issue is Thirty Million
(30,000,000) shares having a par value of one dollar ($1.00) per share.
B. The Board of Directors is authorized, subject to
limitations prescribed by law and the provisions of this Article FOURTH, to
provide for the issuance of the shares of Preferred Stock in series, and by
filing a certificate pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof. The authority of the
Board of Directors with respect to each series shall include, but not be
limited to, determination of the following:
<PAGE>
(i) The number of shares constituting that series and the
distinctive designation of that series.
(ii) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so, from which
date or dates, and the relative rights of priority, if any, of
payment of dividends on shares of that series;
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of such voting rights;
(iv) Whether that series shall have conversion or exchange
privileges, and, if so, the terms and conditions of such
conversion or exchange, including provision for adjustment of
the conversion or exchange rate in such events as the Board of
Directors shall determine;
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the manner of selecting shares for
redemption if less than all shares are to be redeemed, the date
or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption
dates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
(vii) The right of the shares of that series to the benefit
of conditions and restrictions upon the creation of indebtedness
of the Corporation or any subsidiary, upon the issue of any
additional stock (including additional shares of such series or
any other series) and upon the payment of dividends or the
making of other distributions on, and the purchase, redemption
or other acquisition by the Corporation or any subsidiary of any
outstanding stock of the Corporation;
(viii) The rights of the shares of that series in the
event of voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, and the relative rights of
priority, if any, of payment of shares of that series; and
(ix) Any other relative, participating, optional or other
special rights, qualifications, limitations or restrictions of
that series.
C. Dividends on outstanding shares of Preferred Stock shall be
paid, or declared and set apart for payment, before any dividends shall be
paid or declared and set apart for payment on outstanding shares of Common
2
<PAGE>
Stock. If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets available for distribution to
holders of shares of Preferred Stock of all series shall be insufficient to
pay such holders the full preferential amount to which they are entitled,
then such assets shall be distributed ratably among the shares of all
series of Preferred Stock in accordance with the respective preferential
amounts (including unpaid cumulative dividends, if any) payable with
respect thereto.
D. Shares of any series of Preferred Stock which have been
redeemed (whether through the operation of a sinking fund or otherwise) or
which, if convertible or exchangeable, have been converted into or
exchanged for shares of stock of any other class or classes shall have the
status of authorized and unissued shares of Preferred Stock of the same
series and may be reissued as a part of the series of which they were
originally a part or may be reclassified and reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors or as part of any other series of Preferred Stock, all
subject to the conditions and the restrictions on issuance set forth in the
resolution or resolutions adopted by the Board of Directors providing for
the issue of any series of Preferred Stock.
E. Subject to the provisions of any applicable law or except as
otherwise provided by the resolution or resolutions providing for the issue
of any series of Preferred Stock, the holders of outstanding shares of
Common Stock shall exclusively possess voting power for the election of
directors and for all other purposes, each holder of record of shares of
Common Stock being entitled to one vote for each share of Common Stock
standing in his name on the books of the Corporation.
F. Except as otherwise provided by the resolution or resolutions
providing for the issue of any series of Preferred Stock, after payment
shall have been made to the holders of Preferred Stock of the full amount
of dividends to which they shall be entitled pursuant to the resolution or
resolutions providing for the issue of any series of Preferred Stock, the
holders of Common Stock shall be entitled, to the exclusion of the holders
of Preferred Stock of any and all series, to receive such dividends as from
time to time may be declared by the Board of Directors.
G. Except as otherwise provided by the resolution or resolutions
providing for the issue of any series of Preferred Stock, in the event of
any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, after payment shall have been made to the holders
of Preferred Stock of the full amount to which they shall be entitled
pursuant to the resolution or resolutions providing for the issue of any
series of Preferred Stock, the holders of Common Stock shall be entitled,
to the exclusion of the holders of Preferred Stock of any and all series,
to share ratably according to the number of shares of Common Stock held by
them, in all remaining assets of the Corporation available for
distribution.
3
<PAGE>
H. The issuance of any shares of Common Stock or Preferred Stock
authorized hereunder and any other actions permitted to be taken by the
Board of Directors pursuant to this Article FOURTH must be authorized by
the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of
the entire Board of Directors or by a committee of the Board of Directors
constituted by the affirmative vote of at least sixty-six and two-thirds
percent (66 2/3%) of the entire Board of Directors.
I. Notwithstanding any other provision of this Certificate of
Incorporation, the affirmative vote of the holders of at least seventy-five
percent (75%) of the voting power of the shares entitled to vote at an
election of directors shall be required to amend, alter, change or repeal,
or adopt any provision as part of this Certificate of Incorporation
inconsistent with the purpose and intent of, section B through I of this
Article FOURTH.
J. 8.125% CUMULATIVE PREFERRED STOCK, SERIES A
1. Designation and Number of Shares. The designation of such
series shall be 8.125% Cumulative Preferred Stock, Series A (the "Series A
Preferred Stock"), and the number of shares constituting such series shall
be 1,200,000. The number of authorized shares of Series A Preferred Stock
may be reduced (but not below the number of shares thereof then
outstanding) by further resolution duly adopted by the Board of Directors
or the Executive Committee and by the filing of a certificate pursuant to
the provisions of the General Corporation Law of the State of Delaware
stating that such reduction has been so authorized, but the number of
authorized shares of Series A Preferred Stock shall not be increased.
2. Dividends. Dividends on each share of Series A Preferred
Stock shall be cumulative from the date of original issue of such share and
shall be payable, when and as declared by the Board of Directors out of
funds legally available therefor, in cash on March 1, June 1, September 1
and December 1 of each year, commencing September 1, 1992.
Each quarterly period beginning on February 15, May 15, August
15 and November 15 in each year and ending on and including the day next
preceding the first day of the next such quarterly period shall be a
"Dividend Period." If a share of Series A Preferred Stock is outstanding
during an entire Dividend Period, the dividend payable on such share on the
first day of the calendar month immediately following the last day of such
Dividend Period shall be $5.078125 (or one-fourth of 8.125% of the
Liquidation Preference (as defined in Section 7) for such share). If a
share of Series A Preferred Stock is outstanding for less than an entire
Dividend Period, the dividend payable on such share on the first day of the
calendar month immediately following the last day of such Dividend Period
on which such share shall be outstanding shall be the product of $5.078125
multiplied by the ratio (which shall not exceed one) that the number of
days that such share was outstanding during such Dividend Period bears to
the number of days in such Dividend Period.
4
<PAGE>
Each dividend on the shares of Series A Preferred Stock shall be
paid to the holders of record of shares of Series A Preferred Stock as they
appear on the stock register of the Corporation on such record date, not
more than 60 days nor less than 10 days preceding the payment date of such
dividend, as shall be fixed in advance by the Board of Directors. Dividends
on account of arrears for any past Dividend Periods may be declared and
paid at any time, without reference to any regular dividend payment date,
to holders of record on such date, not exceeding 45 days preceding the
payment date thereof, as may be fixed in advance by the Board of Directors.
If there shall be outstanding shares of any other class or
series of preferred stock of the Corporation ranking on a parity as to
dividends with the Series A Preferred Stock, the Corporation, in making any
dividend payment on account of arrears on the Series A Preferred Stock or
such other class or series of preferred stock, shall make payments ratably
upon all outstanding shares of Series A Preferred Stock and such other
class or series of preferred stock in proportion to the respective amounts
of dividends in arrears upon all such outstanding shares of Series A
Preferred Stock and such other class or series of preferred stock to the
date of such dividend payment.
Holders of shares of Series A Preferred Stock shall not be
entitled to any dividend, whether payable in cash, property or stock, in
excess of full cumulative dividends on such shares. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend
payment that is in arrears.
3. Redemption. The Series A Preferred Stock is not subject to
any mandatory redemption pursuant to a sinking fund or otherwise. The
Corporation, at its option, may redeem shares of Series A Preferred Stock,
as a whole or in part, at any time or from time to time on or after July
28, 1997, at a price of $250 per share, plus accrued and accumulated but
unpaid dividends thereon to but excluding the date fixed for redemption
(the "Redemption Price").
If the Corporation shall redeem shares of Series A Preferred
Stock pursuant to this Section 3, notice of such redemption shall be given
by first class mail, postage prepaid, not less than 30 or more than 90 days
prior to the redemption date, to each holder of record of the shares to be
redeemed, at such holder's address as shown on the stock register of the
Corporation. Each such notice shall state: (a) the redemption date; (b) the
number of shares of Series A Preferred Stock to be redeemed and, if less
than all such shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (c) the Redemption Price;
(d) the place or places where certificates for such shares are to be
surrendered for payment of the Redemption Price; and (e) that dividends on
the shares to be redeemed will cease to accrue on such redemption date.
Notice having been mailed as aforesaid, from and after the redemption date
(unless default shall be made by the Corporation in providing money for the
payment of the Redemption Price) dividends on the shares of Series A
Preferred Stock so called for redemption shall cease to accrue, and such
shares shall no longer be deemed to be outstanding, and all rights of the
5
<PAGE>
holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the Redemption Price) shall cease. Upon
surrender in accordance with such notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors shall so require and the notice shall so state), the Corporation
shall redeem such shares at the Redemption Price. If less than all the
outstanding shares of Series A Preferred Stock are to be redeemed, the
Corporation shall select those shares to be redeemed from outstanding
shares of Series A Preferred Stock not previously called for redemption by
lot or pro rata (as nearly as may be) or by any other method determined by
the Board of Directors to be equitable.
The Corporation shall not redeem less than all the outstanding
shares of Series A Preferred Stock pursuant to this Section 3, or purchase
or acquire any shares of Series A Preferred Stock otherwise than pursuant
to a purchase or exchange offer made on the same terms to all holders of
shares of Series A Preferred Stock, unless full cumulative dividends shall
have been paid or declared and set apart for payment upon all outstanding
shares of Series A Preferred Stock for all past Dividend Periods, and
unless all matured obligations of the Corporation with respect to all
sinking funds, retirement funds or purchase funds for all series of
Preferred Stock then outstanding have been met.
4. Shares to be Retired. All shares of Series A Preferred Stock
redeemed by the Corporation shall be retired and canceled and shall be
restored to the status of authorized but unissued shares of Preferred
Stock, without designation as to series, and may thereafter be reissued.
5. Conversion or Exchange. The holders of shares of Series A
Preferred Stock shall not have any rights to convert any such shares into
or exchange any such shares for shares of any other class or series of
capital stock of the Corporation.
6. Voting. Except as otherwise provided in this Section 6 or as
otherwise required by law, the Series A Preferred Stock shall have no
voting rights.
If six quarterly dividends (whether or not consecutive) payable
on shares of Series A Preferred Stock are in arrears at the time of the
record date to determine stockholders for any annual meeting of
stockholders of the Corporation, the number of directors of the Corporation
shall be increased by two, and the holders of shares of Series A Preferred
Stock (voting separately as a class with the holders of shares of any one
or more other series of Preferred Stock upon which like voting rights have
been conferred and are exercisable) shall be entitled at such annual
meeting of stockholders to elect two directors of the Corporation, with the
remaining directors of the Corporation to be elected by the holders of
shares of any other class or classes or series of stock entitled to vote
therefor. In any such election, holders of shares of Series A Preferred
Stock shall have one vote for each share held.
6
<PAGE>
At all meetings of stockholders at which holders of Preferred
Stock shall be entitled to vote for Directors as a single class, the
holders of a majority of the outstanding shares of all classes and series
of capital stock of the Corporation having the right to vote as a single
class shall be necessary to constitute a quorum, whether present in person
or by proxy, for the election by such single class of its designated
Directors. In any election of Directors by stockholders voting as a class,
such Directors shall be elected by the vote of at least a plurality of
shares held by such stockholders present or represented at the meeting. At
any such meeting, the election of Directors by stockholders voting as a
class shall be valid notwithstanding that a quorum of other stockholders
voting as one or more classes may not be present or represented at such
meeting.
Any director who has been elected by the holders of shares of
Series A Preferred Stock (voting separately as a class with the holders of
shares of any one or more other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable) may be removed at
any time, with or without cause, only by the affirmative vote of the
holders of the shares at the time entitled to cast a majority of the votes
entitled to be cast for the election of any such director at a special
meeting of such holders called for that purpose, and any vacancy thereby
created may be filled by the vote of such holders. If a vacancy occurs
among the Directors elected by such stockholders voting as a class, other
than by removal from office as set forth in the preceding sentence, such
vacancy may be filled by the remaining Director so elected, or his
successor then in office, and the Director so elected to fill such vacancy
shall serve until the next meeting of stockholders for the election of
Directors.
The voting rights of the holders of the Series A Preferred Stock
to elect Directors as set forth above shall continue until all dividend
arrearages on the Series A Preferred Stock have been paid or declared and
set apart for payment. Upon the termination of such voting rights, the
terms of office of all persons who may have been elected pursuant to such
voting rights shall immediately terminate, and the number of directors of
the Corporation shall be decreased by two.
Without the consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of the
total number of shares of Preferred Stock then outstanding, voting
separately as a class without regard to series, with the holders of shares
of Series A Preferred Stock being entitled to cast one vote per share, the
Corporation may not:
(i) create any class of stock that shall have preference
as to dividends or distributions of assets over the Series A
Preferred Stock; or
(ii) alter or change the provisions of the Certificate of
Incorporation (including any Certificate of Amendment or
Certificate of Designation relating to the Series A Preferred
7
<PAGE>
Stock) so as to adversely affect the powers, preferences or
rights of the holders of shares of Series A Preferred Stock;
provided, however, that if such creation or such alteration or change would
adversely affect the powers, preferences or rights of one or more, but not
all, series of Preferred Stock at the time outstanding, such alteration or
change shall require consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of all of
the shares of all such series so affected, voting as a class.
7. Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, voluntary or involuntary, the
holders of Series A Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to stockholders,
before any distribution of assets shall be made to the holders of the
Common Stock or of any other shares of stock of the Corporation ranking as
to such distribution junior to the Series A Preferred Stock, a liquidating
distribution in an amount equal to $250 per share (the "Liquidation
Preference") plus an amount equal to any accrued and accumulated but unpaid
dividends thereon to the date of final distribution. The holders of the
Series A Preferred Stock shall not be entitled to receive the Liquidation
Preference and such accrued dividends, however, until the liquidation
preference of any other class of stock of the Corporation ranking senior to
the Series A Preferred Stock as to rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.
If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the assets available for distribution are
insufficient to pay in full the amounts payable with respect to the Series
A Preferred Stock and any other shares of stock of the Corporation ranking
as to any such distribution on a parity with the Series A Preferred Stock,
the holders of the Series A Preferred Stock and of such other shares shall
share ratably in any distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they are
entitled.
After payment to the holders of the Series A Preferred Stock of
the full preferential amounts provided for in this Section 7, the holders
of the Series A Preferred Stock shall be entitled to no further
participation in any distribution of assets by the Corporation.
Consolidation or merger of the Corporation with or into one or
more other corporations, or a sale, whether for cash, shares of stock,
securities or properties, of all or substantially all of the assets of the
Corporation, shall not be deemed or construed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this
Section 7 if the preferences or special voting rights of the holders of
shares of Series A Preferred Stock are not impaired thereby.
8. Limitation on Dividends on Junior Stock. So long as any
Series A Preferred Stock shall be outstanding the Corporation shall not
8
<PAGE>
declare any dividends on the Common Stock or any other stock of the
Corporation ranking as to dividends or distributions of assets junior to
the Series A Preferred Stock (the Common Stock and any such other stock
being herein referred to as "Junior Stock"), or make any payment on account
of, or set apart money for, a sinking fund or other similar fund or
agreement for the purchase, redemption or other retirement of any shares of
Junior Stock, or make any distribution in respect thereof, whether in cash
or property or in obligations or stock of the Corporation, other than a
distribution of Junior Stock (such dividends, payments, setting apart and
distributions being herein called "Junior Stock Payments"), unless the
following conditions shall be satisfied at the date of such declaration in
the case of any such dividend, or the date of such setting apart in the
case of any such fund, or the date of such payment or distribution in the
case of any other Junior Stock Payment:
(i) full cumulative dividends shall have been paid or
declared and set apart for payment on all outstanding shares of
Preferred Stock other than Junior Stock; and
(ii) the Corporation shall not be in default or in arrears
with respect to any sinking fund or other similar fund or
agreement for the purchase, redemption or other retirement of
any shares of Preferred Stock other than Junior Stock;
provided, however, that any funds theretofore deposited in any sinking fund
or other similar fund with respect to any Preferred Stock in compliance
with the provisions of such sinking fund or other similar fund may
thereafter be applied to the purchase or redemption of such Preferred Stock
in accordance with the terms of such sinking fund or other similar fund
regardless of whether at the time of such application full cumulative
dividends upon shares of Series A Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set apart for
payment by the Corporation.
K. 5.50% CONVERTIBLE PREFERRED STOCK, SERIES B
1. Designation and Number of Shares. The designation of such
series shall be 5.50% Convertible Preferred Stock, Series B (the "Series B
Convertible Preferred Stock"), and the number of shares constituting such
series shall be 2,500,000. The number of authorized shares of Series B
Convertible Preferred Stock may be reduced (but not below the number of
shares thereof then outstanding) by further resolution duly adopted by the
Board of Directors or the Executive Committee and by the filing of a
certificate pursuant to the provisions of the General Corporation Law of
the State of Delaware stating that such reduction has been so authorized,
but the number of authorized shares of Series B Convertible Preferred Stock
shall not be increased.
2. Dividends. Dividends on each share of Series B Convertible
Preferred Stock shall be cumulative from the date of original issue of such
share and shall be payable, when and as declared by the Board of Directors
9
<PAGE>
out of funds legally available therefor, in cash on March 1, June 1,
September 1 and December 1 of each year, commencing September 1, 1993.
Each quarterly period beginning on February 15, May 15, August
15 and November 15 in each year and ending on and including the day next
preceding the first day of the next such quarterly period shall be a
"Dividend Period." If a share of Series B Convertible Preferred Stock is
outstanding during an entire Dividend Period, the dividend payable on such
share on the first day of the calendar month immediately following the last
day of such Dividend Period shall be $.6875 (or one-fourth of 5.50% of the
Liquidation Preference (as defined in Section 6) for such share). If a
share of Series B Convertible Preferred Stock is outstanding for less than
an entire Dividend Period, the dividend payable on such share on the first
day of the calendar month immediately following the last day of such Divi-
dend Period on which such share shall be outstanding shall be the product
of $.6875 multiplied by the ratio (which shall not exceed one) that the
number of days that such share was outstanding during such Dividend Period
bears to the number of days in such Dividend Period.
Each dividend on the shares of Series B Convertible Preferred
Stock shall be paid to the holders of record of shares of Series B Con-
vertible Preferred Stock as they appear on the stock register of the
Corporation on such record date, not more than 60 days nor less than 10
days preceding the payment date of such dividend, as shall be fixed in
advance by the Board of Directors. Dividends on account of arrears for any
past Dividend Periods may be declared and paid at any time, without
reference to any regular dividend payment date, to holders of record on
such date, not exceeding 45 days preceding the payment date thereof, as may
be fixed in advance by the Board of Directors.
If there shall be outstanding shares of any other class or
series of preferred stock of the Corporation ranking on a parity as to
dividends with the Series B Convertible Preferred Stock, the Corporation,
in making any dividend payment on account of arrears on the Series B
Convertible Preferred Stock or such other class or series of preferred
stock, shall make payments ratably upon all outstanding shares of Series B
Convertible Preferred Stock and such other class or series of preferred
stock in proportion to the respective amounts of dividends in arrears upon
all such outstanding shares of Series B Convertible Preferred Stock and
such other class or series of preferred stock to the date of such dividend
payment.
Holders of shares of Series B Convertible Preferred Stock shall
not be entitled to any dividend, whether payable in cash, property or
stock, in excess of full cumulative dividends on such shares. No interest,
or sum of money in lieu of interest, shall be payable in respect of any
dividend payment that is in arrears.
3. Redemption. The Series B Convertible Preferred Stock is not
subject to any mandatory redemption pursuant to a sinking fund or
otherwise. The Corporation, at its option, may redeem shares of Series B
Convertible Preferred Stock, as a whole or in part, at any time or from
10
<PAGE>
time to time on or after July 30, 1996 at the following redemption prices
per share (expressed as a percentage of the Liquidation Preference (as
defined in Section 6 hereof)), if redeemed during the 12-month period
beginning July 30 of the year indicated:
Year Redemption Price
---- ----------------
1996 103.85%
1997 103.30%
1998 102.75%
1999 102.20%
2000 101.65%
2001 101.10%
2002 100.55%
and thereafter at a price of $50.00 per share, plus, in each case, accrued
and accumulated but unpaid dividends thereon to but excluding the date
fixed for redemption (the "Redemption Price").
If the Corporation shall redeem shares of Series B Convertible
Preferred Stock pursuant to this Section 3, notice of such redemption shall
be given by first class mail, postage prepaid, not less than 30 or more
than 90 days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as shown on the stock
register of the Corporation. Each such notice shall state: (a) the
redemption date; (b) the number of shares of Series B Convertible Preferred
Stock to be redeemed and, if less than all such shares held by such holder
are to be redeemed, the number of such shares to be redeemed from such
holder; (c) the Redemption Price; (d) the place or places where certifi-
cates for such shares are to be surrendered for payment of the Redemption
Price; and (e) that dividends on the shares to be redeemed will cease to
accrue on such redemption date. Notice having been mailed as aforesaid,
from and after the redemption date (unless default shall be made by the
Corporation in providing money for the payment of the Redemption Price)
dividends on the shares of Series B Convertible Preferred Stock so called
for redemption shall cease to accrue, and such shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the Redemption Price) shall cease. Upon surrender in accor-
dance with such notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state), the Corporation shall
redeem such shares at the Redemption Price. If less than all the outstand-
ing shares of Series B Convertible Preferred Stock are to be redeemed, the
Corporation shall select those shares to be redeemed from outstanding
shares of Series B Convertible Preferred Stock not previously called for
redemption by lot or pro rata (as nearly as may be) or by any other method
reasonably determined by the Board of Directors in good faith to be
equitable.
The Corporation shall not redeem less than all the outstanding
shares of Series B Convertible Preferred Stock pursuant to this Section 3,
or purchase or acquire any shares of Series B Convertible Preferred Stock
11
<PAGE>
otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of shares of Series B Convertible Preferred Stock,
unless full cumulative dividends shall have been paid or declared and set
apart for payment upon all outstanding shares of Series B Convertible
Preferred Stock for all past Dividend Periods, and unless all matured
obligations of the Corporation with respect to all sinking funds,
retirement funds or purchase funds for all series of Preferred Stock then
outstanding have been met.
4. Shares to be Retired. All shares of Series B Convertible
Preferred Stock redeemed by the Corporation shall be retired and canceled
and shall be restored to the status of authorized but unissued shares of
Preferred Stock, without designation as to series, and may thereafter be
reissued.
5. Voting. Except as otherwise provided in this Section 5 or as
otherwise required by law, the Series B Convertible Preferred Stock shall
have no voting rights.
If six quarterly dividends (whether or not consecutive) payable
on shares of Series B Convertible Preferred Stock are in arrears at the
time of the record date to determine stockholders for any annual meeting of
stockholders of the Corporation, the number of directors of the Corporation
shall be increased by two, and the holders of shares of Series B
Convertible Preferred Stock (voting separately as a class with the holders
of shares of any one or more other series of Preferred Stock upon which
like voting rights have been conferred and are exercisable) shall be enti-
tled at such annual meeting of stockholders to elect two directors of the
Corporation, with the remaining directors of the Corporation to be elected
by the holders of shares of any other class or classes or series of stock
entitled to vote therefor. In any such election, holders of shares of
Series B Convertible Preferred Stock shall have one vote for each share
held.
At all meetings of stockholders at which holders of Preferred
Stock shall be entitled to vote for Directors as a single class, the
holders of a majority of the outstanding shares of all classes and series
of capital stock of the Corporation having the right to vote as a single
class shall be necessary to constitute a quorum, whether present in person
or by proxy, for the election by such single class of its designated
Directors. In any election of Directors by stockholders voting as a class,
such Directors shall be elected by the vote of at least a plurality of
shares held by such stockholders present or represented at the meeting. At
any such meeting, the election of Directors by stockholders voting as a
class shall be valid notwithstanding that a quorum of other stockholders
voting as one or more classes may not be present or represented at such
meeting.
Any director who has been elected by the holders of shares of
Series B Convertible Preferred Stock (voting separately as a class with the
holders of shares of any one or more other series of Preferred Stock upon
which like voting rights have been conferred and are exercisable) may be
12
<PAGE>
removed at any time, with or without cause, only by the affirmative vote of
the holders of the shares at the time entitled to cast a majority of the
votes entitled to be cast for the election of any such director at a
special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If a vacancy
occurs among the Directors elected by such stockholders voting as a class,
other than by removal from office as set forth in the preceding sentence,
such vacancy may be filled by the remaining Director so elected, or his
successor then in office, and the Director so elected to fill such vacancy
shall serve until the next meeting of stockholders for the election of
Directors.
The voting rights of the holders of the Series B Convertible
Preferred Stock to elect Directors as set forth above shall continue until
all dividend arrearages on the Series B Convertible Preferred Stock have
been paid or declared and set apart for payment. Upon the termination of
such voting rights, the terms of office of all persons who may have been
elected pursuant to such voting rights shall immediately terminate, and the
number of directors of the Corporation shall be decreased by two.
Without the consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of the
total number of shares of Preferred Stock then outstanding, voting
separately as a class without regard to series, with the holders of shares
of Series B Convertible Preferred Stock being entitled to cast one vote per
share, the Corporation may not:
(i) create any class of stock that shall have preference
as to dividends or distributions of assets over the Series B
Convertible Preferred Stock; or
(ii) alter or change the provisions of the Certificate of
Incorporation (including any Certificate of Amendment or Certif-
icate of Designation relating to the Series B Convertible Pre-
ferred Stock) so as to adversely affect the powers, preferences
or rights of the holders of shares of Series B Convertible Pre-
ferred Stock;
provided, however, that if such creation or such alteration or change would
adversely affect the powers, preferences or rights of one or more, but not
all, series of Preferred Stock at the time outstanding, such alteration or
change shall require consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of all of
the shares of all such series so affected, voting as a class.
6. Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, voluntary or involuntary, the
holders of Series B Convertible Preferred Stock shall be entitled to re-
ceive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the
holders of the Common Stock or of any other shares of stock of the
Corporation ranking as to such distribution junior to the Series B Convert-
ible Preferred Stock, a liquidating distribution in an amount equal to
13
<PAGE>
$50.00 per share (the "Liquidation Preference") plus an amount equal to any
accrued and accumulated but unpaid dividends thereon to the date of final
distribution. The holders of the Series B Convertible Preferred Stock
shall not be entitled to receive the Liquidation Preference and such
accrued dividends, however, until the liquidation preference of any other
class of stock of the Corporation ranking senior to the Series B Con-
vertible Preferred Stock as to rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.
If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the assets available for distribution are
insufficient to pay in full the amounts payable with respect to the Series
B Convertible Preferred Stock and any other shares of stock of the
Corporation ranking as to any such distribution on a parity with the Series
B Convertible Preferred Stock, the holders of the Series B Convertible Pre-
ferred Stock and of such other shares shall share ratably in any
distribution of assets of the Corporation in proportion to the full respec-
tive preferential amounts to which they are entitled.
After payment to the holders of the Series B Convertible Pre-
ferred Stock of the full preferential amounts provided for in this Section
6, the holders of the Series B Convertible Preferred Stock shall be
entitled to no further participation in any distribution of assets by the
Corporation.
Consolidation or merger of the Corporation with or into one or
more other corporations, or a sale, whether for cash, shares of stock,
securities or properties, of all or substantially all of the assets of the
Corporation, shall not be deemed or construed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this
Section 6 if the preferences or special voting rights of the holders of
shares of Series B Convertible Preferred Stock are not impaired thereby.
7. Limitation on Dividends on Junior Stock. So long as any
Series B Convertible Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock of
the Corporation ranking as to dividends or distributions of assets junior
to the Series B Convertible Preferred Stock (the Common Stock and any such
other stock being herein referred to as "Junior Stock"), or make any
payment on account of, or set apart money for, a sinking fund or other
similar fund or agreement for the purchase, redemption or other retirement
of any shares of Junior Stock, or make any distribution in respect thereof,
whether in cash or property or in obligations or stock of the Corporation,
other than a distribution of Junior Stock (such dividends, payments,
setting apart and distributions being herein called "Junior Stock
Payments"), unless the following conditions shall be satisfied at the date
of such declaration in the case of any such dividend, or the date of such
setting apart in the case of any such fund, or the date of such payment or
distribution in the case of any other Junior Stock Payment:
14
<PAGE>
(i) full cumulative dividends shall have been paid or de-
clared and set apart for payment on all outstanding shares of
Preferred Stock other than Junior Stock; and
(ii) the Corporation shall not be in default or in arrears
with respect to any sinking fund or other similar fund or agree-
ment for the purchase, redemption or other retirement of any
shares of Preferred Stock other than Junior Stock;
provided, however, that any funds theretofore deposited in any sinking fund
or other similar fund with respect to any Preferred Stock in compliance
with the provisions of such sinking fund or other similar fund may
thereafter be applied to the purchase or redemption of such Preferred Stock
in accordance with the terms of such sinking fund or other similar fund re-
gardless of whether at the time of such application full cumulative
dividends upon shares of Series B Convertible Preferred Stock outstanding
to the last dividend payment date shall have been paid or declared and set
apart for payment by the Corporation.
8. Conversion Rights. The shares of Series B Convertible Pre-
ferred Stock shall be convertible, in whole or in part, at the option of
the holder(s) thereof, into shares of Common Stock subject to the following
terms and conditions:
(a) The shares of Series B Convertible Preferred Stock
shall be convertible at the office of any transfer agent of the
Corporation, and at such other office or offices, if any, as the
Board of Directors may designate, into fully paid and nonassess-
able shares (calculated as to each conversion to the nearest
1/100 of a share) of common stock, $.01 par value per share, of
the Corporation ("Common Stock") at the rate of that number of
shares of Common Stock for each share of Series B Convertible
Preferred Stock that is equal to $50.00 divided by the Conver-
sion Price applicable per share of Common Stock at the time of
conversion (the "Conversion Price"). The Conversion Price shall
initially be $49.00. The Conversion Price shall be adjusted in
certain instances as provided below.
(b) In order to convert shares of Series B Convertible
Preferred Stock into Common Stock, the holder thereof shall
surrender the certificate or certificates evidencing such shares
of Series B Convertible Preferred Stock at the office of the
transfer agent for the Series B Convertible Preferred Stock,
which certificate or certificates, if the Corporation shall so
require, shall be duly endorsed to the Corporation or in blank,
or accompanied by proper instruments of transfer to the Corpora-
tion or in blank, accompanied by (i) an irrevocable written
notice to the Corporation that the holder elects so to convert
such shares of Series B Convertible Preferred Stock and specify-
ing the name or names (with address or addresses) in which a
certificate or certificates evidencing shares of Common Stock
are to be issued and (ii) if required pursuant to paragraph (p)
15
<PAGE>
of this Section 8, an amount sufficient to pay any transfer or
similar tax (or evidence reasonably satisfactory to the Corpora-
tion demonstrating that such taxes have been paid).
A payment or adjustment shall not be made by the Corpora-
tion upon any conversion on account of any dividends accrued on
the shares of Series B Convertible Preferred Stock surrendered
for conversion or on account of any dividends on the Common
Stock issued upon conversion.
Shares of Series B Convertible Preferred Stock shall be
deemed to have been converted immediately prior to the close of
business on the day of the surrender of such shares for
conversion in accordance with the foregoing provisions, and the
person or persons entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the
Corporation shall issue and shall deliver at such office a
certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with
payment in lieu of any fraction of a share, as hereinafter
provided, to the person or persons entitled to receive the same.
In case shares of Series B Convertible Preferred Stock are
called for redemption, the right to convert such shares shall
cease and terminate at the close of business on the date fixed
for redemption, unless default shall be made in payment of the
Redemption Price.
(c) In case the Corporation shall pay or make a dividend
or other distribution on any class of capital stock of the
Corporation in Common Stock, the Conversion Price in effect at
the close of business on the date fixed for the determination of
stockholders entitled to receive such dividend or other distri-
bution shall be reduced to a price determined by multiplying
such Conversion Price by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the
total number of shares constituting such dividend or other
distribution, such reduction to become effective at the opening
of business on the day following the date fixed for such deter-
mination. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjust-
ed to be the Conversion Price which would then be in effect if
such date fixed for the determination of stockholders entitled
to receive such dividend or other distribution had not been
fixed, but such subsequent adjustment shall not affect the
number of shares of Common Stock issued upon any conversion of
the Series B Convertible Preferred Stock prior to the date such
subsequent adjustment is made. For the purposes of this para-
graph (c), the number of shares of Common Stock at any time
16
<PAGE>
outstanding shall not include shares held in the treasury of the
Corporation, but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of
Common Stock.
(d) In case the Corporation shall issue rights or warrants
to all holders of its Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less
than the Average Market Price (as defined below) of Common Stock
on the date fixed for the determination of stockholders entitled
to receive such rights or warrants, the Conversion Price in ef-
fect at the close of business on the date fixed for such
determination shall be reduced to a price determined by multi-
plying such Conversion Price by a fraction of which the numera-
tor shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of
the offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such
Average Market Price and the denominator shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase, such
reduction to become effective at the opening of business on the
day following the date fixed for such determination. To the
extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Price
shall be readjusted to the Conversion Price which would then be
in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the
event that such rights or warrants are not so issued, the Con-
version Price shall again be adjusted to be the Conversion Price
which would then be in effect if the date fixed for the determi-
nation of stockholders entitled to receive such rights or war-
rants had not been fixed, but such subsequent adjustment shall
not affect the number of shares of Common Stock issued upon any
conversion of the Series B Convertible Preferred Stock prior to
the date such subsequent adjustment is made. For the purposes
of this paragraph (d), the number of shares of Common Stock at
any time outstanding shall not include shares held in the
treasury of the Corporation, but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. As used herein the term "Average Market
Price" of the Common Stock shall mean the average of the daily
reported closing sales prices, regular way, per share of the
Common Stock on the New York Stock Exchange (the "NYSE") or, if
the Common Stock is not principally traded on the NYSE, such
other market on which the Common Stock is listed or principally
traded, for the 10 consecutive trading days prior to the date of
determination.
17
<PAGE>
(e) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the close of business on the date
upon which such subdivision becomes effective shall be propor-
tionately reduced, and, conversely, in case outstanding shares
of Common Stock shall each be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the
close of business on the date upon which such combination be-
comes effective shall be proportionately increased, such reduc-
tion or increase, as the case may be, to become effective at the
opening of business on the day following the date upon which
such subdivision or combination becomes effective.
(f) In case the Corporation shall, by dividend or other-
wise, distribute to all holders of its Common Stock evidences of
its indebtedness or assets (including securities, but excluding
(i) any rights or warrants referred to in paragraph (d) of this
Section 8, (ii) any dividend or distribution paid in cash or
other property out of the retained earnings of the Corporation
and (iii) any dividend or distribution referred to in paragraph
(c) of this Section 8), then either (at the option of the Corpo-
ration) (A) the Corporation shall elect to include in such
distribution the holders of Series B Convertible Preferred Stock
(as of the record date for such distribution) as if such holders
had converted all shares of Series B Convertible Preferred Stock
into Common Stock immediately prior to such record date (such
conversion assumed to be made at the Conversion Price in effect
without regard to the adjustment provided in the following
clause (B)), or (B) the Conversion Price shall be reduced to a
price determined by multiplying the Conversion Price in effect
at the close of business on the date fixed for the determination
of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Average Market
Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as reasonably
determined in good faith by the Board of Directors) on such date
of the portion of the assets or evidences of indebtedness so to
be distributed applicable to one share of Common Stock and the
denominator shall be such Average Market Price per share of the
Common Stock, such adjustment to become effective at the opening
of business on the day following the date fixed for the
determination of stockholders entitled to receive such
distribution. In the event that such dividend or distribution
is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in
effect if such date fixed for the determination of stockholders
entitled to receive such dividend or other distribution had not
been fixed, but such subsequent adjustment shall not affect the
number of shares of Common Stock issued upon any conversion of
the Series B Convertible Preferred Stock prior to the date such
subsequent adjustment is made. If the Corporation makes an
election under clause (A) of this paragraph (f) with respect to
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any such distribution payable on the Series B Convertible
Preferred Stock (an "Elected Corporation Dividend"), the
Corporation may in lieu of such distribution elect to pay to the
holder of any share of Series B Convertible Preferred Stock the
fair market value (determined as provided above) of such Elected
Corporation Dividend in cash (the "Cash Equivalent").
(g) The reclassification (including any reclassification
upon a consolidation or merger in which the Corporation is the
continuing corporation, but not including any transactions for
which an adjustment is provided in paragraph (i) below) of
Common Stock into securities including other than Common Stock
shall be deemed to involve (i) a distribution of such securities
other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such
determination" within the meaning of paragraph (f) of this
Section 8) and (ii) a subdivision or combination, as the case
may be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and
the effective date of such reclassification shall be deemed to
be "the date upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective," as the
case may be, and "the date upon which such subdivision or combi-
nation becomes effective" within the meaning of paragraph (e) of
this Section 8).
(h) The Corporation may make such reductions in the Con-
version Price, in addition to those required by paragraphs (c),
(d), (e), (f) and (g) above, as it considers to be advisable in
order that any event treated for Federal income tax purposes as
a dividend of stock or stock rights shall not be taxable to the
recipients.
(i) In case of any consolidation of the Corporation with,
or merger of the Corporation into, any other corporation, part-
nership, joint venture, association or other entity (a "Per-
son"), any merger of another Person into the Corporation (other
than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of
Common Stock) or any sale or transfer of all or substantially
all of the assets of the Corporation, then each share of Series
B Convertible Preferred Stock shall be convertible only into the
kind and amount (if any) of securities, cash or other property
receivable upon such consolidation, merger, sale or transfer by
a holder of the number of shares of Common Stock into which such
share of Series B Convertible Preferred Stock was convertible
immediately prior to such consolidation, merger, sale or trans-
fer. The above provisions of this paragraph (i) shall similarly
apply to successive consolidations, mergers, sales or transfers.
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<PAGE>
(j) No adjustment in the Conversion Price shall be re-
quired unless such adjustment would require an increase or
decrease of at least 1% in the Conversion Price; provided,
however, that any adjustments which by reason of this subpara-
graph (j) are not required to be made shall be carried forward
and taken into account in determining whether any subsequent
adjustment shall be required.
(k) Notwithstanding any other provision of this Section 8,
no adjustment to the Conversion Price shall reduce the Conver-
sion Price below the then par value per share of the Common
Stock, and any such purported adjustment shall instead reduce
the Conversion Price to such par value.
(l) Whenever the Conversion Price is adjusted as herein
provided the Corporation shall compute the adjusted Conversion
Price in accordance with this Section 8 and shall prepare a
certificate signed by the Treasurer of the Corporation setting
forth the adjusted Conversion Price and showing in reasonable
detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the transfer agent or
agents for the Series B Convertible Preferred Stock and a copy
mailed as soon as practicable to the holders of record of the
shares of Series B Convertible Preferred Stock.
(m) In case:
(i) the Corporation shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise
than in cash out of its retained earnings; or
(ii) the Corporation shall authorize the granting to
the holders of its Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any
class or of any other rights; or
(iii) of any reclassification of the capital stock of
the Corporation (other than a subdivision or combination of
its outstanding shares of Common Stock), or of any
consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation
is required, or of the sale or transfer of all or
substantially all of the assets of the Corporation; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any such case, the Corporation shall cause to be filed
with the transfer agent or agents, if any, for the Series B
Convertible Preferred Stock, and shall cause to be mailed to the
holders of record of the outstanding shares of Series B Convert-
ible Preferred Stock, at least 30 days (or 15 days in any case
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specified in clause (i) or (ii) above) prior to the applicable
record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (y) the date on
which such reclassification, consolidation, merger, sale, trans-
fer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up
(but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate
action required to be specified in such notice).
(n) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the
conversion of shares of Series B Convertible Preferred Stock,
the full number of shares of Common Stock then deliverable upon
the conversion of all shares of Series B Convertible Preferred
Stock then outstanding.
(o) No fractional shares of Common Stock shall be issued
upon conversion, but, instead of any fraction of a share which
would otherwise be issuable, the Corporation shall pay a cash
adjustment in respect of such fraction in an amount equal to the
same fraction of the market price per share of Common Stock (as
determined in good faith by the Board of Directors or in any
manner prescribed by the Board of Directors) at the close of
business on the day of conversion.
(p) The Corporation will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common
Stock on conversion of shares of Series B Convertible Preferred
Stock pursuant hereto. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common
Stock in a name other than that in which the shares of Series B
Convertible Preferred Stock so converted were registered, and no
such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Corporation the amount of
any such tax, or has established to the satisfaction of the
Corporation that such tax has been paid.
(q) For the purpose of this Section 8, the term "Common
Stock" shall include any stock of any class of the Corporation
which has no preference in respect of dividends or of amounts
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<PAGE>
payable in the event of any voluntary or involuntary liquida-
tion, dissolution or winding up of the Corporation and which is
not subject to redemption by the Corporation. However, shares
issuable on conversion of shares of Series B Convertible Pre-
ferred Stock shall include only shares of the class designated
as Common Stock of the Corporation as of July 31, 1993, or
shares of any class or classes resulting from any reclassifica-
tion or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation and which are not subject to redemption by
the Corporation; provided that if at any time there shall be
more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion
which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.
(r) In any case in which this Section 8 shall require that
an adjustment shall become effective on the day following a
record date for an event, the Corporation may defer until the
occurrence of such event (i) issuing to the holder of any share
of Series B Convertible Preferred Stock, if such share is con-
verted after such record date and before the occurrence of such
event, the additional Common Stock (and associated Elected
Corporation Dividend or Cash Equivalent, if any) issuable upon
such conversion by reason of the adjustment required by such
event over and above Common Stock (and associated Elected Corpo-
ration Dividend or Cash Equivalent, if any) issuable upon such
conversion before giving effect to such adjustment and (ii) pay-
ing to such holders any amount in cash in lieu of a fractional
share of Common Stock pursuant to paragraph (p) of this Section
8; provided that upon request of any such holder, the Corpo-
ration shall deliver to such holder a due bill or other ap-
propriate instrument evidencing such holder's right to receive
such additional Common Stock and such cash, upon the occurrence
of the event requiring such adjustment.
9. Sinking Fund. The Series B Convertible Preferred Stock shall
not be subject to any right of mandatory payment or prepayment (except for
liquidation, dissolution or winding up of the Corporation) or to any
sinking fund.
10. Ranking. The Series B Convertible Preferred Stock shall
rank on a parity with the Corporation's 8.125% Cumulative Preferred Stock,
Series A and $45,000 Cumulative Redeemable Preferred Stock, Series Z with
respect to dividends and distributions of assets upon liquidation,
dissolution or winding up of the Corporation.
11. Exchanges. Certificates representing shares of Series B
Convertible Preferred Stock shall be exchangeable, at the option of the
holder, for a new certificate or certificates of the same or different
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denominations representing in the aggregate the same number of shares of
Series B Convertible Preferred Stock.
L. $ 4.53 ESOP CONVERTIBLE PREFERRED STOCK, SERIES C
1. Designation, Issuance and Transfer. (a) There shall be a
series of Preferred Stock, the designation of which shall be
"$4.53 ESOP Convertible Preferred Stock, Series C" (hereinafter
called the "Series C Preferred Stock") and the number of
authorized shares constituting the Series C Preferred Stock
shall be eight million (8,000,000). Shares of the Series C
Preferred Stock shall have a stated value of $53.25 per share.
The number of authorized shares of the Series C Preferred Stock
may be reduced by resolution duly adopted by the Board of
Directors, or by a duly authorized committee thereof, and by the
filing, pursuant to the provisions of the General Corporation
Law of the State of Delaware, of a certificate of amendment to
the Certificate of Incorporation of the Corporation, as
theretofore amended, stating that such reduction has been so
authorized, but the number of authorized shares of the Series C
Preferred Stock shall not be increased.
(b) Shares of Series C Preferred Stock shall be issued
only to Shawmut Bank Connecticut, National Association, as
trustee (the "Trustee") acting on behalf of the employee stock
ownership feature of The Travelers Savings, Investment and Stock
Ownership Plan, as amended from time to time or any successor to
such plan (the "Plan"), or any successor trustee under the Plan.
In the event of any transfer of shares of Series C Preferred
Stock to any person other than the Trustee, other than a pledge
of the shares of Series C Preferred Stock by the Trust in
connection with the financing or refinancing of the purchase by
the Trustee of shares of $4.53 Series A ESOP Convertible
Preference Stock (without par value) of The Travelers
Corporation (the "Series A Preference Stock"; such shares of
Series A Preference Stock having been assumed by the Corporation
and become shares of Series C Preferred Stock pursuant to the
terms of such Series A Preference Stock) or of shares of Series
C Preferred Stock, the shares of the Series C Preferred Stock so
transferred, upon such transfer and without any further action
by the Corporation or the holder, shall be automatically
converted into shares of Common Stock on the terms otherwise
provided for the conversion of shares of Series C Preferred
Stock into shares of Common Stock pursuant to paragraph 4 of
this Section L and no such transferee shall have any of the
voting powers, preferences or rights of shares of Series C
Preferred Stock hereunder, but rather, only the powers and
rights pertaining to the Common Stock into which such shares of
Series C Preferred Stock shall be so converted. Notwithstanding
the foregoing provisions of this paragraph 1(b), shares of
Series C Preferred Stock may be converted into shares of Common
Stock as provided by paragraph 4 of this Section L and the
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<PAGE>
shares of Common Stock issued upon such conversion may be
transferred by the holder thereof as permitted by law.
2. Dividend Rate. (a) Dividends on each share of the Series
C Preferred Stock shall accrue from the date of its original
issue (for purposes of this paragraph 2(a), the date of original
issue of the Series C Preferred Stock shall be the date of
commencement of the full quarterly period ending April 1, 1994)
in the amount of $4.53 per annum per share (the "Rate"). Such
dividends shall be cumulative from the date of original issue
and shall be payable, when and as declared by the Board of
Directors, out of assets legally available for such purpose, on
January 1, April 1, July 1 and October 1 of each year,
commencing April 1, 1994 (each such date being hereinafter
individually a "Dividend Payment Date" and collectively the
"Dividend Payment Dates"), except that if such date is a Sunday
or legal holiday then such dividend shall be payable on the
first immediately succeeding calendar day which is not a Sunday
or legal holiday. Each such dividend shall be paid to the
holders of record of shares of the Series C Preferred Stock as
they appear on the books of the Corporation on such Dividend
Payment Date, or such other date as shall be fixed by the Board
of Directors as the record date. Dividends in arrears may be
declared and paid at any time, without reference to any regular
Dividend Payment Date, to holders of record on the payment date
(which payment date may be fixed by the Board of Directors as
the record date), or such other date as may be fixed by the
Board of Directors as the record date.
(b) Except as hereinafter provided, no dividends shall be
declared or paid or set apart for payment on Preferred Stock of
any other series ranking on a parity with the Series C Preferred
Stock as to dividends and upon liquidation for any period unless
full cumulative dividends have been or contemporaneously are
declared and paid on the Series C Preferred Stock through the
latest Dividend Payment Date. When dividends are not paid in
full, as aforesaid, upon the shares of the Series C Preferred
Stock and any such other series of Preferred Stock, all
dividends declared upon shares of the Series C Preferred Stock
and such other series of Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share on the
Series C Preferred Stock and such other series of Preferred
Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of the Series C
Preferred Stock and such other series of Preferred Stock bear to
each other. Holders of shares of the Series C Preferred Stock
shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as
herein provided, on the Series C Preferred Stock. No interest,
or sum of money in lieu of interest, shall be payable in respect
of any dividend payment or payments on the Series C Preferred
Stock which may be in arrears.
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<PAGE>
(c) So long as any shares of the Series C Preferred Stock
are outstanding, no dividend (other than a dividend in Common
Stock or in any other stock of the Corporation ranking junior to
the Series C Preferred Stock as to dividends and upon
liquidation and other than as provided in paragraph 2(b) of this
Section L) shall be declared or paid or set aside for payment,
and no other distribution shall be declared or made upon the
Common Stock or upon any other stock of the Corporation ranking
junior to or on a parity with the Series C Preferred Stock as to
dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a
parity with the Series C Preferred Stock as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock)
by the Corporation (except by conversion into or exchange for
stock of the Corporation ranking junior to the Series C
Preferred Stock as to dividends and upon liquidation), unless,
in each case, the full cumulative dividends on all outstanding
shares of the Series C Preferred Stock shall have been paid or
contemporaneously are declared and paid through the latest
Dividend Payment Date.
(d) Dividends payable on the Series C Preferred Stock for
any full quarterly period shall be computed by dividing the Rate
by four (for purposes of this paragraph 2(d), the Series C
Preferred Stock shall be deemed to have been outstanding for the
full quarterly period ending April 1, 1994). Subject to the
preceding sentence, dividends payable on the Series C Preferred
Stock for any period less than a full quarterly period shall be
computed on the basis of a 360-day year of 30-day months.
3. Redemption. (a) The shares of Series C Preferred Stock
shall not be redeemable before January 1, 1998 except as set
forth in paragraphs 3(b), 3(c), 3(d) and 3(e) of this Section L.
On or after January 1, 1998, the Corporation, at its sole
option, may redeem the Series C Preferred Stock as a whole or in
part at a price of $53.25 per share plus accrued and unpaid
dividends thereon to the date fixed for redemption.
(b) The shares of Series C Preferred Stock shall be
redeemable by the Corporation, at its sole option, at any time
and from time to time if there is a change in the Federal tax
law of the United States of America which has the effect of
precluding the Corporation from claiming any of the tax
deductions for dividends paid on the Series C Preferred Stock
when such dividends are used as provided under Section 404(k)(2)
of the Internal Revenue Code of 1986, as amended, and as in
effect on the date shares of Series C Preferred Stock are
initially issued (for this purpose, such date of initial
issuance being the date of the original issuance of the Series A
Preference Stock), at the higher of (i) $53.25 per share plus
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accrued and unpaid dividends thereon to the date fixed for
redemption or (ii) the fair market value per share of the Series
C Preferred Stock as determined by an independent appraiser,
appointed by the Trustee in accordance with the provisions of
the Plan, as of the most recent Valuation Date, as defined in
the Plan.
(c) The shares of Series C Preferred Stock shall be
redeemable in whole at any time upon the commencement of any
action by a governmental authority having jurisdiction which may
result in the divestiture or other material change in the
business of the Corporation or any subsidiary by reason of the
issuance of the Series C Preferred Stock. At such time as the
shares of Series C Preferred Stock shall be redeemable pursuant
to this paragraph 3(c), the Corporation, at its sole option, may
redeem the Series C Preferred Stock at the following redemption
prices per share plus, in each case, accrued and unpaid
dividends thereon to the date fixed for redemption.
If redeemed during the twelve-month period beginning January 1,
Year Price
---- -----
1994 $55.52
1995 $54.95
1996 $54.38
1997 $53.82
and $53.25 if redeemed on or after January 1, 1998.
(d) The shares of Series C Preferred Stock shall be
redeemed by the Corporation at a redemption price which shall
be the higher of (i) $53.25 per share plus accrued and unpaid
dividends thereon to the date fixed for redemption or (ii) the
fair market value per share of the Series C Preferred Stock as
determined by an independent appraiser appointed by the Trustee
in accordance with the provisions of the Plan, as of the most
recent Valuation Date, as defined in the Plan, at the option of
the holder, at any time and from time to time upon notice to
the Corporation given not less than five business days prior to
the date fixed by the holder in such notice for such
redemption, upon certification by such holder to the
Corporation, when and to the extent necessary for such holder
to provide for distributions required to be made to
participants under, or to satisfy an investment election
provided to participants in accordance with, the Plan.
(e) At the option of the holder, the shares of Series C
Preferred Stock shall be redeemed in whole by the Corporation
at a redemption price of $53.25 per share plus accrued and
unpaid dividends thereon to the date fixed for redemption, at
any time (i) upon a Change in Control of the Corporation or
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<PAGE>
(ii) in the event that the Plan is not initially determined by
the Internal Revenue Service to be qualified within the meaning
of Sections 401(a) and 4975(e)(7) of the Internal Revenue Code
of 1986, as amended, upon notice to the Corporation given not
less than five business days prior to the date fixed by the
holder in such notice for such redemption.
For purposes of this paragraph (e), a "Change in Control" will
be deemed to have occurred upon either of the following:
(i) The date of public disclosure that any person
or group of persons (excluding persons or entities
affiliated with the Corporation) directly or indirectly
acquires actual or beneficial ownership of 30% or more of
the combined voting power of the Corporation's outstanding
securities entitled to vote in the election of members of
the Board of Directors, or the right to obtain such
ownership; or
(ii) The date Incumbent Directors cease to
constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to (i) above solely because 30% or
more of the combined voting power of the Corporation's
outstanding securities entitled to vote in the election of
members of the Board of Directors is acquired by a person, the
majority interest in which is held, directly or indirectly, by
the Corporation, or by one or more employee benefit plans
maintained by the Corporation or an affiliated employer, the
majority interest in which is held, directly or indirectly, by
the Corporation.
For the purposes of this definition, the term "person" shall
have the same meaning as set forth in Section 3(a) of the
Securities Exchange Act of 1934, as amended, and in the
regulations promulgated thereunder.
For purposes of this definition, the term "Incumbent Directors"
shall mean the Board of Directors on December 31, 1993, to the
extent that they continue to serve as members thereof. Any
individual who becomes a member of such Board after December
31, 1993, if his or her election or nomination for election as
a director was approved by a majority of the then Incumbent
Directors, is an Incumbent Director.
(f) Except with respect to subparagraph 3(e)(i) of this
Section L, the Corporation, at its option, may make payment of
the redemption price required upon redemption of shares of
Series C Preferred Stock in cash or in shares of Common Stock,
or in a combination of such shares and cash, any such shares of
Common Stock to be valued for such purpose at the current
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market price as determined pursuant to paragraphs 4(d) and 9 of
this Section L, provided, however, that in calculating the
current market price, the five consecutive business days
preceding and including the date of redemption shall be used.
Payment of the redemption price required upon redemption of
shares of Series C Preferred Stock pursuant to subparagraph
3(e)(i) of this Section L shall be made in cash.
(g) In the event the Corporation shall redeem shares of
the Series C Preferred Stock, notice of such redemption shall
be given by first class mail, postage prepaid, mailed not less
than 20 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such
holder's address as the same appears on the books of the
Corporation. Each such notice shall state: (i) the redemption
date; (ii) the number of shares of the Series C Preferred Stock
to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price; (iv)
whether such payment shall be in cash or shares of Common
Stock, or in a combination of such shares and cash; (v) the
place or places where certificates for such shares are to be
surrendered for payment of the redemption price; (vi) that
dividends on the shares to be redeemed will cease to accrue on
such redemption date; and (vii) the conversion rights of the
shares to be redeemed, the period within which conversion
rights may be exercised, the conversion price and the number of
shares of Common Stock issuable upon conversion of a share of
Series C Preferred Stock at the time.
(h) Notice having been mailed as aforesaid, from and
after the redemption date (unless default shall be made by the
Corporation in providing money or shares of Common Stock for
the payment of the redemption price of the shares called for
redemption) dividends on the shares of the Series C Preferred
Stock so called for redemption shall cease to accrue, and said
shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as preferred stockholders of the
Corporation (except the right to receive from the Corporation
the redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of
Directors shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption
price aforesaid. In case fewer than all the shares represented
by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares without cost to
the holder thereof.
(i) Any shares of the Series C Preferred Stock which
shall at any time have been redeemed or repurchased by the
Corporation, or surrendered to the Corporation upon conversion
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<PAGE>
or otherwise acquired by the Corporation shall, upon such
redemption, repurchase, surrender or other acquisition, be
retired and thereafter have the status of authorized but
unissued shares of Preferred Stock, without designation as to
series until such shares are once more designated as part of a
particular series by the Board of Directors or a duly
authorized committee thereof.
(j) Notwithstanding the foregoing provisions of this
paragraph 3, unless the full cumulative dividends on all
outstanding shares of the Series C Preferred Stock shall have
been paid or contemporaneously are declared and paid through
the latest Dividend Payment Date, no shares of the Series C
Preferred Stock shall be redeemed, except at the option of the
holder pursuant to paragraph 3(d) and paragraph 3(e) of this
Section L, unless all outstanding shares of the Series C
Preferred Stock are simultaneously redeemed, and the
Corporation shall not purchase or otherwise acquire any shares
of the Series C Preferred Stock; provided, however, that the
foregoing shall not prevent the purchase or acquisition of
shares of the Series C Preferred Stock pursuant to a purchase
or exchange offer made on the same terms to holders of all
outstanding shares of the Series C Preferred Stock.
(k) Any redemption, repurchase or other acquisition by,
or any surrender upon conversion to, the Corporation of shares
of Series C Preferred Stock may, to the extent required to be
made out of funds legally available for such purpose, be made
to the extent of any unreserved and unrestricted capital
surplus attributable to such shares in addition to any other
surplus, profits, earnings or other funds or amounts legally
available for such purpose.
4. Conversion. (a) The holder of any shares of the Series
C Preferred Stock at his option may at any time (except that if
any such shares shall have been called for redemption, then, as
to such shares, such right shall terminate at the close of
business on the date fixed for such redemption, unless default
shall be made by the Corporation in providing money or shares
of Common Stock for the payment of the redemption price of the
shares called for redemption) convert the stated value of all
such shares into a number of fully paid and nonassessable
shares of Common Stock determined by dividing the stated value
of the shares surrendered for conversion by the Conversion
Price fixed or determined pursuant to paragraph 4(d) and
paragraph 9 of this Section L. Such right shall be exercised by
the surrender of the shares so to be converted to the
Corporation at any time during normal business hours at the
office of the Corporation, accompanied by written notice of
such holder's election to convert and (if so required by the
Corporation) by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the registered holder or
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by his duly authorized attorney, and transfer tax stamps or
funds therefor, if required pursuant to paragraph 4(i) of this
Section L.
(b) As promptly as practicable after the surrender for
conversion of the shares of the Series C Preferred Stock in the
manner provided in paragraph 4(a) of this Section L and the
payment in cash of any amount required by the provisions of
paragraphs 4(a) and 4(h) of this Section L, the Corporation
will deliver or cause to be delivered to or upon the written
order of the holder of such shares, certificates representing
the number of full shares of Common Stock issuable upon such
conversion, issued in such name or names as such holder may
direct. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such
surrender of the shares, and all rights of the holder of such
shares as a holder of such shares shall cease at such time and
the person or persons in whose name or names the certificates
for such shares of Common Stock are to be issued shall be
treated for all purposes as having become the record holder or
holders thereof at such time and such conversion shall be at
the Conversion Price (as hereinafter defined) in effect at such
time; provided, however, that any such surrender and payment on
any date when the stock transfer books of the Corporation shall
be closed shall constitute the person or persons in whose name
or names the certificates for such shares of Common Stock are
to be issued as the record holder or holders thereof for all
purposes immediately prior to the close of business on the next
succeeding day on which such stock transfer books are opened
and such conversion shall be at the Conversion Price in effect
at such time on such succeeding day.
If the last day for the exercise of the conversion right shall
be other than a business day, then such conversion right may be
exercised on the next succeeding business day.
(c) No adjustments in respect of dividends shall be
made upon the conversion of the shares of the Series C
Preferred Stock.
(d) The initial Conversion Price shall be $66.21 per
share of the Common Stock. The Conversion Price shall be
subject to adjustment as provided in paragraph 9.
(e) No fractional shares of stock shall be issued upon
the conversion of shares of the Series C Preferred Stock. If
any fractional interest in a share of Common Stock would,
except for the provisions of this paragraph 4(e), be
deliverable upon the conversion of shares, the Corporation
shall in lieu of delivering the fractional share therefor,
adjust such fractional interest by payment to the holder of
such surrendered share or shares of an amount in cash equal
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(computed to the nearest cent) to the current market value of
such fractional interest, computed on the basis of the last
reported sale price regular way of Common Stock on the New York
Stock Exchange, or, if not reported for such Exchange, on the
Composite Tape, on the business day prior to the date of
conversion, or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked
quotations on the New York Stock Exchange, or, if the Common
Stock is not listed on such Exchange or no such quotations are
available, the last sale price in the over-the-counter market
reported by the National Association of Securities Dealers
Automated Quotations System, or if not reported by such System,
the average of the high bid and low asked quotations in the
over-the-counter market as reported by National Quotation
Bureau, Incorporated, or similar organization, or if no such
quotations are available, the fair market price as determined
by the Corporation (whose determination shall be conclusive).
(f) The Corporation covenants that it will at all times
reserve and keep available, solely for the purpose of issue
upon conversion of the outstanding shares of the Series C
Preferred Stock, such number of shares of Common Stock as shall
be issuable upon the conversion of all such outstanding shares,
provided that nothing contained herein shall be construed to
preclude the Corporation from satisfying its obligations in
respect of (i) such reservation by reserving purchased shares
of Common Stock which are held in the treasury of the
Corporation and (ii) conversion of any shares of the Series C
Preferred Stock by delivery of purchased shares of Common Stock
which are held in the treasury of the Corporation.
The Corporation covenants that if any shares of Common Stock
required to be reserved for purposes of conversion of the
shares hereunder require registration with or approval of any
governmental authority under any Federal or state law before
such shares may be issued upon conversion, the Corporation will
cause such shares to be duly registered or approved, as the
case may be.
The Corporation will endeavor to list the shares of Common
Stock required to be delivered upon conversion of shares prior
to such delivery upon each national securities exchange upon
which the outstanding Common Stock is listed at the time of
such delivery.
The Corporation covenants that all shares of Common Stock which
shall be issued upon conversion of the shares of Series C
Preferred Stock will upon issue be fully paid and
nonassessable.
(g) Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par
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value of the Common Stock, the Corporation will take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of Common Stock at
the Conversion Price as so adjusted.
(h) The issuance of certificates for shares of Common
Stock upon conversion or payment of the redemption price shall
be made without charge for any stamp or other similar tax in
respect of such issuance. However, if any such certificate is
to be issued in a name other than that of the holder of the
share or shares converted, the person or persons requesting the
issuance thereof shall pay to the Corporation the amount of any
tax which may be payable in respect of any transfer involved in
such issuance or shall establish to the satisfaction of the
Corporation that such tax has been paid.
(i) Notwithstanding anything elsewhere contained in
this Certificate of Incorporation, any funds which at any time
shall have been deposited or set aside by the Corporation or on
its behalf with any paying agent or otherwise for the purpose
of paying dividends on or the redemption price of any of the
shares of the Series C Preferred Stock and which shall not be
required for such purposes because of the conversion of such
shares, as provided in this paragraph 4, shall, upon delivery
to the paying agent of evidence satisfactory to it of such
conversion, after such conversion be repaid to the Corporation
by the paying agent.
(j) In case:
(i) the Corporation shall take any action which
would require an adjustment in the Conversion Price
pursuant to paragraph 9 of this Section L; or
(ii) the Corporation shall authorize the
granting to the holders of its Common Stock of rights or
warrants to subscribe for or purchase any shares of stock
of any class or of any other rights and notice thereof
shall be given to holders of Common Stock; or
(iii) there shall be any capital reorganization
or reclassification of the Common Stock (other than a
subdivision or combination of the outstanding Common Stock
and other than a change in par value or from par value to
no par value or from no par value to par value of the
Common Stock), or any consolidation or merger to which the
Corporation is a party and for which approval of any
stockholders of the Corporation is required, or any sale or
transfer of all or substantially all of the assets of the
Corporation; or
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(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be given to the holders of
the shares of the Series C Preferred Stock at least ten days
prior to the applicable date hereinafter specified, a notice of
(x) the date on which a record is to be taken for the purpose
of any distribution or grant to holders of Common Stock, or, if
a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such distribution
or grant are to be determined or (y) the date on which such
reorganization, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding up. Failure to give such notice or any defect
therein shall not affect the legality or validity of any
proceedings described in clauses (i), (ii), (iii) or (iv) of
this paragraph 4(j).
5. Voting. The shares of the Series C Preferred Stock shall be
entitled to vote for the election of directors and on all other matters
submitted to a vote of stockholders of the Corporation. Each share of the
Series C Preferred Stock shall be entitled to 1.3 votes per share when
voting together as a single class with shares of Common Stock, such voting
rights to be adjusted as the Conversion Price is adjusted pursuant to
paragraphs 4(d) and 9 of this Section L. Such shares shall vote jointly as
a single class with shares of Common Stock and not as a separate class
except as otherwise expressly provided for in the General Corporation Law
of the State of Delaware; provided, however, that whether or not the
General Corporation Law of the State of Delaware so provides, the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of the Series C Preferred Stock and all other series of Preferred
Stock ranking on a parity with the Series C Preferred Stock as to dividends
and upon liquidation, voting together as a class, shall be required for the
Corporation to create a new class or increase an existing class of stock
having rights in respect of the payment of dividends or in liquidation
prior to the Series C Preferred Stock or any other series of Preferred
Stock ranking on a parity with the Series C Preferred Stock as to dividends
and upon liquidation, to issue any preferred stock of the Corporation
ranking prior to the Series C Preferred Stock either as to dividends or
upon liquidation, or to change the terms, limitations or relative rights or
preferences of the Series C Preferred Stock or any other series of
Preferred Stock ranking on a parity with the Series C Preferred Stock as to
dividends and upon liquidation, either directly or by increasing the
relative rights of the shares of another class. When the shares of Series C
Preferred Stock are entitled to vote together with any other series of
Preferred Stock, shares of Series C Preferred Stock shall be entitled to
one vote per share.
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6. Liquidation Rights. (a) Upon the dissolution, liquidation
or winding up of the Corporation, whether voluntary or
involuntary, the holders of the shares of the Series C
Preferred Stock shall be entitled to receive out of the assets
of the Corporation available for distribution to stockholders,
before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to the
Preferred Stock upon liquidation, the amount of $53.25 per
share, plus accrued and unpaid dividends thereon to the date of
final distribution.
(b) Neither the sale, lease or exchange (for cash,
shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation
nor the merger or consolidation of the Corporation into or with
any other corporation or the merger or consolidation of any
other corporation into or with the Corporation, shall be deemed
to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this paragraph 6.
(c) After the payment to the holders of the shares of
the Series C Preferred Stock of the full preferential amounts
provided for in this paragraph 6, the holders of the Series C
Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.
(d) In the event the assets of the Corporation
available for distribution to the holders of shares of the
Series C Preferred Stock upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts
to which such holders are entitled pursuant to paragraph 6(a)
of this Section L, no such distribution shall be made on
account of any shares of any other series of Preferred Stock or
any other class of stock of the Corporation, in either case
ranking on a parity with the shares of the Series C Preferred
Stock upon such dissolution, liquidation or winding up, unless
proportionate distributive amounts shall be paid on account of
the shares of the Series C Preferred Stock, ratably, in
proportion to the full distributable amounts to which holders
of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
7. Ranking. For purposes of the foregoing paragraphs 1 through
6 of this Section L, any stock of any class or classes of the Corporation
shall be deemed to rank:
(a) prior to the shares of the Series C Preferred
Stock, either as to dividends or upon liquidation, if the
holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation,
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whether voluntary or involuntary, as the case may be, in
preference or priority to the holders of shares of the Series C
Preferred Stock;
(b) on a parity with shares of the Series C Preferred
Stock, either as to dividends or upon liquidation, whether or
not the dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if
any, be different from those of the Series C Preferred Stock,
if the holders of such stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, whether voluntary
or involuntary, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the
holders of such stock and the holders of shares of the Series C
Preferred Stock; and
(c) junior to shares of the Series C Preferred Stock,
either as to dividends or upon liquidation, if such class or
classes shall be Common Stock or if the holders of shares of
the Series C Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, whether voluntary
or involuntary, as the case may be, in preference or priority
to the holders of shares of such class or classes.
Notwithstanding any other provision of this Section L or of Section M, the
Series C Preferred Stock shall rank on a parity (within the meaning of
paragraph 7(b) of this Section L) with the Corporation's 8.125% Cumulative
Preferred Stock, Series A, 5.50% Convertible Preferred Stock, Series B,
$45,000 Cumulative Redeemable Preferred Stock, Series Z and 9.25% Preferred
Stock, Series D as to dividends and distributions of assets.
8. Consolidation, Merger, etc. (a) In the event that the
Corporation shall consummate any consolidation or merger or
similar business combination, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged solely
for or changed, reclassified or converted solely into stock of
any successor or resulting corporation (including the
Corporation) that constitutes "qualifying employer securities"
with respect to a holder of Series C Preferred Stock within the
meaning of Section 409(1) of the Internal Revenue Code of 1986,
as amended, and Section 407(d)(5) of the Employee Retirement
Income Security Act of 1974, as amended, or any successor
provisions of law, and, if applicable, for a cash payment in
lieu of fractional shares, if any, the Series C Preferred Stock
of such holder shall, in connection with such consolidation,
merger or similar business combination, be assumed by and shall
become preferred stock of such successor or resulting
corporation, having in respect of such corporation, insofar as
possible, the same powers, preferences and relative,
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<PAGE>
participating, optional or other special rights (including the
redemption rights provided by paragraph 3 of this Section L),
and the qualifications, limitations or restrictions thereon,
that the Series C Preferred Stock had immediately prior to such
transaction, except that after such transaction each share of
Series C Preferred Stock shall be convertible, otherwise on the
terms and conditions provided by paragraph 4 of this Section L,
into the number and kind of qualifying employer securities so
receivable by a holder of the number of shares of Common Stock
into which such Series C Preferred Stock could have been
converted immediately prior to such transaction; provided,
however, that if by virtue of the structure of such
transaction, a holder of Common Stock is required to make an
election with respect to the nature and kind of consideration
to be received in such transaction, which election cannot
practicably be made by the holders of the Series C Preferred
Stock, then the Series C Preferred Stock shall, by virtue of
such transaction and on the same terms as apply to the holders
of Common Stock, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property
(payable in kind) receivable by a holder of the number of
shares of Common Stock into which such Series C Preferred Stock
could have been converted immediately prior to such transaction
if such holder of Common Stock failed to exercise any rights of
election to receive any kind or amount of stock, securities,
cash or other property (other than such qualifying employer
securities and a cash payment, if applicable, in lieu of
fractional shares) receivable upon such transaction (provided
that, if the kind or amount of qualifying employer securities
receivable upon such transaction is not the same for each
non-electing share, then the kind and amount so receivable upon
such transaction for each non-electing share shall be the kind
and amount so receivable per share by the plurality of the
non-electing shares). The rights of the Series C Preferred
Stock as preferred stock of such successor or resulting
corporation shall successively be subject to adjustments
pursuant to paragraphs 4 and 9 of this Section L after any such
transaction as nearly equivalent as practicable to the
adjustment provided for by such paragraph prior to such
transaction. The Corporation shall not consummate any such
merger, consolidation or similar transaction unless all then
outstanding Series C Preferred Stock shall be assumed and
authorized by the successor or resulting corporation as
aforesaid.
(b) In the event that the Corporation shall consummate
any consolidation or merger or similar business combination,
pursuant to which the outstanding shares of Common Stock are by
operation of law exchanged for or changed, reclassified or
converted into other stock or securities or cash or any other
property, or any combination thereof, other than any such
consideration which is constituted solely of qualifying
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employer securities (as referred to in paragraph 8(a) of this
Section L) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series C Preferred
Stock shall, without any action on the part of the Corporation
or any holder thereof (but subject to paragraph 8(c) of this
Section L), be automatically converted by virtue of such
merger, consolidation or similar transaction immediately prior
to such consummation into the number of shares of Common Stock
into which such Series C Preferred Stock could have been
converted at such time so that each share of Series C Preferred
Stock shall, by virtue of such transaction and on the same
terms as apply to the holders of Common Stock, be converted
into or exchanged for the aggregate amount of stock,
securities, cash or other property (payable in like kind)
receivable by a holder of the number of shares of Common Stock
into which such shares of Series C Preferred Stock could have
been converted immediately prior to such transaction; provided,
however, that if by virtue of the structure of such
transaction, a holder of Common Stock is required to make an
election with respect to the nature and kind of consideration
to be received in such transaction, which election cannot
practicably be made by the holder of the Series C Preferred
Stock, then the Series C Preferred Stock shall, by virtue of
such transaction and on the same terms as apply to the holders
of Common Stock, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property
(payable in kind) receivable by a holder of the number of
shares of Common Stock into which such Series C Preferred Stock
could have been converted immediately prior to such transaction
if such holder of Common Stock failed to exercise any rights of
election as to the kind or amount of stock, securities, cash or
other property receivable upon such transaction (provided that,
if the kind or amount of stock, securities, cash or other
property receivable upon such transaction is not the same for
each non-electing share, then the kind and amount of stock,
securities, cash or other property receivable upon such
transaction for each non-electing share shall be the kind and
amount so receivable per share by a plurality of the
non-electing shares).
(c) In the event the Corporation shall enter into any
agreement providing for any consolidation or merger or similar
business combination described in paragraph 8(b) of this
Section L, then the Corporation shall as soon as practicable
thereafter (and in any event at least ten business days before
consummation of such transaction) give notice of such agreement
and the material terms thereof to each holder of Series C
Preferred Stock and each such holder shall have the right to
elect, by written notice to the Corporation, to receive, upon
consummation of such transaction (if and when such transaction
is consummated), from the Corporation or the successor of the
Corporation, in redemption of such Series C Preferred Stock, a
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cash payment equal to the following redemption prices per
share, plus, in each case, accrued and unpaid dividends thereon
to the date fixed for redemption.
If redeemed during the twelve-month period beginning January 1,
Year Price
---- -----
1994 . . . . $ 55.52
1995 . . . . $ 54.95
1996 . . . . $ 54.38
1997 . . . . $ 53.82
and $53.25 if redeemed on or after January 1, 1998.
No such notice of redemption shall be effective unless given to the
Corporation prior to the close of business on the fifth business day prior
to consummation of such transaction, unless the Corporation or the
successor of the Corporation shall waive such prior notice, but any notice
of redemption so given prior to such time may be withdrawn by notice of
withdrawal given to the Corporation prior to the close of business on the
fifth business day prior to consummation of such transaction.
9. Anti-dilution Adjustments. (a) In the event the
Corporation shall, at any time or from time to time while any
of the Series C Preferred Stock is outstanding, (i) pay a
dividend or make a distribution in respect of the Common Stock
in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock or (iii) combine the outstanding shares
of Common Stock into a smaller number of shares, in each case
whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger
or consolidation to which paragraph 8 of this Section L does
not apply) or otherwise, the Conversion Price in effect
immediately prior to such action shall be adjusted by
multiplying such Conversion Price by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately before such event, and the denominator of which is
the number of shares of Common Stock outstanding immediately
after such event. An adjustment made pursuant to this paragraph
9(a) shall be given effect, upon payment of such a dividend or
distribution, as of the record date for the determination of
stockholders entitled to receive such dividend or distribution
(on a retroactive basis) and in the case of a subdivision or
combination shall become effective immediately as of the
effective date thereof.
(b) In the event that the Corporation shall, at any
time or from time to time while any of the Series C Preferred
Stock is outstanding, issue to holders of shares of Common
Stock as a dividend or distribution, including by way of a
reclassification of shares or a recapitalization of the
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Corporation, any right or warrant to purchase shares of Common
Stock (but not including as such a right or warrant any
security convertible into or exchangeable for shares of Common
Stock) at a purchase price per share less than the Fair Market
Value (as hereinafter defined) of a share of Common Stock on
the date of issuance of such right or warrant, then, subject to
the provisions of paragraphs 9(e) and 9(f) of this Section L,
the Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants plus the number of
shares of Common Stock which could be purchased at the Fair
Market Value of a share of Common Stock at the time of such
issuance for the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants, and the
denominator of which shall be the number of shares of Common
Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock that
could be acquired upon exercise in full of all such rights and
warrants.
(c) In the event the Corporation shall, at any time or
from time to time while any of the shares of Series C Preferred
Stock are outstanding, issue, sell or exchange shares of Common
Stock (other than pursuant to any right or warrant to purchase
or acquire shares of Common Stock (including as such a right or
warrant any security convertible into or exchangeable for
shares of Common Stock) and other than pursuant to any employee
or director incentive or benefit plan or arrangement, including
any employment, severance or consulting agreement, of the
Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted) for a consideration having a Fair Market
Value, on the date of such issuance, sale or exchange, less
than the Fair Market Value of such shares on the date of
issuance, sale or exchange, then, subject to the provisions of
paragraphs 9(e) and 9(f) of this Section L, the Conversion
Price shall be adjusted by multiplying such Conversion Price by
a fraction, the numerator of which shall be the sum of (i) the
Fair Market Value of all the shares of Common Stock outstanding
on the day immediately preceding the first public announcement
of such issuance, sale or exchange plus (ii) the Fair Market
Value of the consideration received by the Corporation in
respect of such issuance, sale or exchange of shares of Common
Stock, and the denominator of which shall be the product of (x)
the Fair Market Value of a share of Common Stock on the day
immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (y) the sum of the
number of shares of Common Stock outstanding on such day plus
the number of shares of Common Stock so issued, sold or
exchanged by the Corporation. In the event the Corporation
shall, at any time or from time to time while any Series C
Preferred Stock is outstanding, issue, sell or exchange any
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right or warrant to purchase or acquire shares of Common Stock
(including as such a right or warrant any security convertible
into or exchangeable for shares of Common Stock), other than
any such issuance to holders of shares of Common Stock as a
dividend or distribution (including by way of a
reclassification of shares or a recapitalization of the
Corporation) and other than pursuant to any employee or
director incentive or benefit plan or arrangement (including
any employment, severance or consulting agreement) of the
Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted, for a consideration having a Fair Market
Value, on the date of such issuance, sale or exchange, less
than the Non-Dilutive Amount (as hereinafter defined), then,
subject to the provisions of paragraphs 9(e) and 9(f) of this
Section L, the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction, the numerator
of which shall be the sum of (i) the Fair Market Value of all
the shares of Common Stock outstanding on the day immediately
preceding the first public announcement of such issuance, sale
or exchange plus (ii) the Fair Market Value of the
consideration received by the Corporation in respect of such
issuance, sale or exchange of such right or warrant plus (iii)
the Fair Market Value at the time of such issuance of the
consideration which the Corporation would receive upon exercise
in full of all such rights or warrants, and the denominator of
which shall be the product of (x) the Fair Market Value of a
share of Common Stock on the day immediately preceding the
first public announcement of such issuance, sale or exchange
multiplied by (y) the sum of the number of shares of Common
Stock outstanding on such day plus the maximum number of shares
of Common Stock which could be acquired pursuant to such right
or warrant at the time of the issuance, sale or exchange of
such right or warrant (assuming shares of Common Stock could be
acquired pursuant to such right or warrant at such time).
(d) In the event the Corporation shall, at any time or
from time to time while any of the Series C Preferred Stock is
outstanding, make an Extraordinary Distribution (as hereinafter
defined) in respect of the Common Stock, whether by dividend,
distribution, reclassification of shares or recapitalization of
the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which
paragraph 8 of this Section L does not apply) or effect a Pro
Rata Repurchase (as hereinafter defined) of Common Stock, the
Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall,
subject to paragraphs 9(e) and 9(f) of this Section L, be
adjusted by multiplying such Conversion Price by a fraction,
the numerator of which is the difference between (i) the
product of (x) the number of shares of Common Stock outstanding
immediately before such Extraordinary Distribution or Pro Rata
Repurchase multiplied by (y) the Fair Market Value of a share
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of Common Stock on the day before the ex-dividend date with
respect to an Extraordinary Distribution which is paid in cash
and on the distribution date with respect to an Extraordinary
Distribution which is paid other than in cash, or on the
applicable expiration date (including all extensions thereof)
of any tender offer which is a Pro Rata Repurchase, or on the
date of purchase with respect to any Pro Rata Repurchase which
is not a tender offer, as the case may be, and (ii) the Fair
Market Value of the Extraordinary Distribution minus the
aggregate amount of regularly scheduled quarterly dividends
declared by the Board of Directors and paid by the Corporation
in the twelve months immediately preceding such Extraordinary
Distribution or the aggregate purchase price of the Pro Rata
Repurchase, as the case may be, and the denominator of which
shall be the product of (a) the number of shares of Common
Stock outstanding immediately before such Extraordinary
Distribution or Pro Rata Repurchase minus, in the case of a Pro
Rata Repurchase, the number of shares of Common Stock
repurchased by the Corporation multiplied by (b) the Fair
Market Value of a share of Common Stock on the day before the
ex-dividend date with respect to an Extraordinary Distribution
which is paid in cash and on the distribution date with respect
to an Extraordinary Distribution which is paid other than in
cash, or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata
Repurchase or on the date of purchase with respect to any Pro
Rata Repurchase which is not a tender offer, as the case may
be. The Corporation shall send each holder of Series C
Preferred Stock (i) notice of its intent to make any
Extraordinary Distribution and (ii) notice of any offer by the
Corporation to make a Pro Rata Repurchase, in each case at the
same time as, or as soon as practicable after, such offer is
first communicated (including by announcement of a record date
in accordance with the rules of any stock exchange on which the
Common Stock is listed or admitted to trading) to holders of
Common Stock. Such notice shall indicate the intended record
date and the amount and nature of such dividend or
distribution, or the number of shares subject to such offer for
a Pro Rata Repurchase and the purchase price payable by the
Corporation pursuant to such offer, as well as the Conversion
Price and the number of shares of Common Stock into which a
share of Series C Preferred Stock may be converted at such
time.
(e) Notwithstanding any other provisions of this
paragraph 9, the Corporation shall not be required to make any
adjustment to the Conversion Price unless such adjustment would
require an increase or decrease of at least one percent (1%) in
the Conversion Price. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and
together with, the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall
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amount to an increase or decrease of at least one percent (1%)
in the Conversion Price.
(f) If the Corporation shall make any dividend or
distribution on the Common Stock or issue any Common Stock,
other capital stock or other security of the Corporation or any
rights or warrants to purchase or acquire any such security,
which transaction does not result in an adjustment to the
Conversion Price pursuant to the foregoing provisions of this
paragraph 9, the Board of Directors shall consider whether such
action is of such a nature that an adjustment to the Conversion
Price should equitably be made in respect of such transaction.
If in such case the Board of Directors determines that an
adjustment to the Conversion Price should be made, an
adjustment shall be made effective as of such date, as
determined by the Board of Directors. The determination of the
Board of Directors as to whether an adjustment to the
Conversion Price should be made pursuant to the foregoing
provisions of this paragraph 9(f), and, if so, as to what
adjustment should be made and when, shall be final and binding
on the Corporation and all stockholders of the Corporation. The
Corporation shall be entitled to make such additional
adjustments in the Conversion Price, in addition to those
required by the foregoing provisions of this paragraph 9, as
shall be necessary in order that any dividend or distribution
in shares of capital stock of the Corporation, subdivision,
reclassification or combination of shares of stock of the
Corporation or any recapitalization of the Corporation shall
not be taxable to the holders of the Common Stock.
(g) For purposes of this paragraph 9 the following
definitions shall apply:
"Business Day" shall mean each day that is not a
Saturday, Sunday or a day on which state or federally chartered
banking institutions in New York, New York are not required to
be open.
"Current Market Price" of publicly traded shares of
Common Stock or any other class of capital stock or other
security of the Corporation or any other issuer for any day
shall mean the last reported sales price, regular way, or, in
the event that no sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, in
either case as reported on the New York Stock Exchange
Composite Tape or, if such security is not listed or admitted
to trading on the New York Stock Exchange, on the principal
national securities exchange on which such security is listed
or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the NASDAQ National
Market System or, if such security is not quoted on such
National Market System, the average of the closing bid and
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asked prices on each such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such
security on each such day shall not have been reported through
NASDAQ, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm regularly
making a market in such security selected for such purpose by
the Board of Directors or a committee thereof, in each case, on
each trading day during the Adjustment Period.
"Adjustment Period" shall mean the period of five
consecutive trading days preceding, and including, the date as
of which the Fair Market Value of a security is to be
determined. The "Fair Market Value" of any security which is
not publicly traded or of any other property shall mean the
fair value thereof as determined by an independent investment
banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of
Directors or a committee thereof, or, if no such investment
banking or appraisal firm is in the good faith judgment of the
Board of Directors or such committee available to make such
determination, as determined in good faith by the Board of
Directors or such committee.
"Extraordinary Distribution" shall mean any dividend or
other distribution to holders of Common Stock (effected while
any shares of the Series C Preferred Stock are outstanding) (i)
of cash, where the aggregate amount of such cash dividend or
distribution together with the amount of all cash dividends and
distributions made during the preceding period of 12 months,
when combined with the aggregate amount of all Pro Rata
Repurchases (for this purpose, including only that portion of
the aggregate purchase price of such Pro Rata Repurchases which
is in excess of the Fair Market Value of the Common Stock
repurchased as determined on the applicable expiration date
(including all extensions thereof) of any tender offer or
exchange offer which is a Pro Rata Repurchase, or the date of
purchase with respect to any other Pro Rata Repurchase which is
not a tender offer or exchange offer made during such period),
exceeds twelve and one-half percent (12 1/2%) of the aggregate
Fair Market Value of all shares of Common Stock outstanding on
the day before the ex-dividend date with respect to such
Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution
which is paid other than in cash, and/or (ii) of any shares of
capital stock of the Corporation (other than shares of Common
Stock), other securities of the Corporation (other than
securities of the type referred to in paragraphs 9(b) or 9(c)
of this Section L), evidences of indebtedness of the
Corporation or any other person or any other property
(including shares of any subsidiary of the Corporation) or any
combination thereof. The Fair Market Value of an Extraordinary
Distribution for purposes of paragraph 9(d) of this Section L
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shall be equal to the sum of the Fair Market Value of such
Extraordinary Distribution plus the amount of any cash
dividends which are not Extraordinary Distributions made during
such 12-month period and not previously included in the
calculation of an adjustment pursuant to paragraph 9(d) of this
Section L.
"Fair Market Value" shall mean, as to shares of Common
Stock or any other class of capital stock or securities of the
Corporation or any other issuer which are publicly traded, the
average of the Current Market Prices of such shares or
securities for each day of the Adjustment Period.
"Non-Dilutive Amount" in respect of an issuance, sale
or exchange by the Corporation of any right or warrant to
purchase or acquire shares of Common Stock (including any
security convertible into or exchangeable for shares of Common
Stock) shall mean the difference between (i) the product of the
Fair Market Value of a share of Common Stock on the day
preceding the first public announcement of such issuance, sale
or exchange multiplied by the maximum number of shares of
Common Stock which could be acquired on such date upon the
exercise in full of such rights and warrants (including upon
the conversion or exchange of all such convertible or
exchangeable securities), whether or not exercisable (or
convertible or exchangeable) at such date, and (ii) the
aggregate amount payable pursuant to such right or warrant to
purchase or acquire such maximum number of shares of Common
Stock; provided, however, that in no event shall the
Non-Dilutive Amount be less than zero. For purposes of the
foregoing sentence, in the case of a security convertible into
or exchangeable for shares of Common Stock, the amount payable
pursuant to a right or warrant to purchase or acquire shares of
Common Stock shall be the Fair Market Value of such security on
the date of the issuance, sale or exchange of such security by
the Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares
of Common Stock by the Corporation or any subsidiary thereof,
whether for cash, shares of capital stock of the Corporation,
other securities of the Corporation, evidences of indebtedness
of the Corporation or any other person or any other property
(including shares of a subsidiary of the Corporation), or any
combination thereof, effected while any of the shares of Series
C Preferred Stock are outstanding, pursuant to any tender offer
or exchange offer subject to Section 13(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor provision of law, or pursuant to any other offer
available to substantially all holders of Common Stock;
provided, however, that no purchases of shares by the
Corporation or any subsidiary thereof made in open market
transactions shall be deemed a Pro Rata Repurchase. For
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purposes of this paragraph 9(g), shares shall be deemed to have
been purchased by the Corporation or any subsidiary thereof "in
open market transactions" if they have been purchased
substantially in accordance with the requirements of Rule
10b-18 as in effect under the Exchange Act, on the date Series
C Preferred Stock is initially issued by the Corporation or on
such other terms and conditions as the Board of Directors or a
committee thereof shall have determined are reasonably designed
to prevent such purchases from having a material effect on the
trading market for the Common Stock.
(h) Whenever an adjustment to the Conversion Price and
the related voting rights of the Series C Preferred Stock is
required pursuant to this paragraph 9, the Corporation shall
forthwith place on file with the transfer agent for the Common
Stock and with the Secretary of the Corporation, a statement
signed by two officers of the Corporation stating the adjusted
Conversion Price determined as provided herein and the
resulting conversion ratio, and the voting rights (as
appropriately adjusted), of the Series C Preferred Stock. Such
statement shall set forth in reasonable detail such facts as
shall be necessary to show the reason and the manner of
computing such adjustment, including any determination of Fair
Market Value involved in such computation. Promptly after each
adjustment to the Conversion Price and the related voting
rights of the Series C Preferred Stock, the Corporation shall
mail a notice thereof and of the then prevailing conversion
ratio to each holder of Series C Preferred Stock.
M. 9.25% PREFERRED STOCK, SERIES D
1. Designation; Issuance and Transfer. There shall be a series
of Preferred Stock, the designation of which shall be "9.25% Preferred
Stock, Series D" (hereinafter called the "Series D Preferred Stock") and
the number of authorized shares constituting the Series D Preferred Stock
shall be 7,500,000. Shares of the Series D Preferred Stock shall have a
stated value of $50.00 per share. The number of authorized shares of the
Series D Preferred Stock may be reduced by resolution duly adopted by the
Board of Directors, or by a duly authorized committee thereof, and by the
filing, pursuant to the provisions of the General Corporation Law of the
State of Delaware, of a certificate of amendment to the Certificate of
Incorporation, as theretofore amended, stating that such reduction has been
so authorized, but the number of authorized shares of the Series D
Preferred Stock shall not be increased.
2. Dividend Rate. (a) Dividends on each share of the Series D
Preferred Stock shall accrue from the date of its original
issue (for purposes of this paragraph 2(a), the date of
original issue of the Series D Preferred Stock shall be the
date of commencement of the full quarterly period ending April
1, 1994) at a rate of 9.25% per annum per share (the "Rate")
applied to the stated value of each such share. Such dividends
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shall be cumulative from the date of original issue and shall
be payable, when and as declared by the Board of Directors, out
of assets legally available for such purpose, on January 1,
April 1, July 1 and October 1 of each year, commencing April 1,
1994 (each such date being hereinafter individually a "Dividend
Payment Date" and collectively the "Dividend Payment Dates"),
except that if such date is a Sunday or legal holiday then such
dividend shall be payable on the first immediately succeeding
calendar day which is not a Sunday or legal holiday. Each such
dividend shall be paid to the holders of record of shares of
the Series D Preferred Stock as they appear on the books of the
Corporation on such record date, not exceeding 45 days
preceding the payment date thereof, as shall be fixed by the
Board of Directors. Dividends in arrears may be declared and
paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such record date, not
exceeding 45 days preceding the payment date thereof, as may be
fixed by the Board of Directors.
(b) Except as hereinafter provided, no dividends shall
be declared or paid or set apart for payment on Preferred Stock
of any other series ranking on a parity with the Series D
Preferred Stock as to dividends and upon liquidation for any
period unless full cumulative dividends have been or
contemporaneously are declared and paid on the Series D
Preferred Stock through the latest Dividend Payment Date. When
dividends are not paid in full, as aforesaid, upon the shares
of the Series D Preferred Stock and any such other series of
Preferred Stock, all dividends declared upon shares of the
Series D Preferred Stock and such other series of Preferred
Stock shall be declared pro rata so that the amount of
dividends declared per share on the Series D Preferred Stock
and such other series of Preferred Stock shall in all cases
bear to each other the same ratio that accrued dividends per
share on the shares of the Series D Preferred Stock and such
other series of Preferred Stock bear to each other. Holders of
shares of the Series D Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the
Series D Preferred Stock. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend
payment or payments on the Series D Preferred Stock which may
be in arrears.
(c) So long as any shares of the Series D Preferred
Stock are outstanding, no dividend (other than a dividend in
Common Stock or in any other stock of the Corporation ranking
junior to the Series D Preferred Stock as to dividends and upon
liquidation and other than as provided in paragraph 2(b) of
this Section M) shall be declared or paid or set aside for
payment, and no other distribution shall be declared or made
upon the Common Stock or upon any other stock of the
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Corporation ranking junior to or on a parity with the Series D
Preferred Stock as to dividends or upon liquidation, nor shall
any Common Stock nor any other stock of the Corporation ranking
junior to or on a parity with the Series D Preferred Stock as
to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid
to or made available for a sinking fund for the redemption of
any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation
ranking junior to the Series D Preferred Stock as to dividends
and upon liquidation) unless, in each case, the full cumulative
dividends on all outstanding shares of the Series D Preferred
Stock shall have been paid or contemporaneously are declared
and paid through the latest Dividend Payment Date.
(d) Dividends payable on each share of Series D
Preferred Stock for any full quarterly period shall be computed
by dividing the Rate by four and multiplying the quotient by
the stated value of such share (for purposes of this paragraph
2(d), the Series D Preferred Stock shall be deemed to have been
outstanding for the full quarterly period ending April 1,
1994). Subject to the preceding sentence, dividends payable on
the Series D Preferred Stock for any period less than a full
quarterly period shall be computed on the basis of a 360-day
year of 30-day months.
3. Redemption. (a) The shares of Series D Preferred Stock
shall not be redeemable before July 1, 1997. On or after July
1, 1997, the Corporation, at its sole option, may redeem the
Series D Preferred Stock as a whole or in part at a price of
$50.00 per share plus accrued and unpaid dividends thereon to
the date fixed for redemption.
(b) In the event that fewer than all the outstanding
shares of the Series D Preferred Stock are to be redeemed, the
number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be
determined by lot or pro rata as may be determined by the Board
of Directors or by any other method as may be determined by the
Board of Directors in its sole discretion to be equitable,
except that, notwithstanding such method of determination, the
Corporation may redeem all shares of the Series D Preferred
Stock owned by all stockholders of a number of shares not to
exceed 100 as may be specified by the Corporation.
(c) In the event the Corporation shall redeem shares of
the Series D Preferred Stock, notice of such redemption shall
be given by first class mail, postage prepaid, mailed not less
than 30 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such
holder's address as the same appears on the books of the
Corporation. Each such notice shall state: (i) the redemption
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date; (ii) the number of shares of the Series D Preferred Stock
to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price; (iv) the
place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on
such redemption date.
(d) Notice having been mailed as aforesaid, from and
after the redemption date (unless default shall be made by the
Corporation in providing money for the payment of the
redemption price of the shares called for redemption) dividends
on the shares of the Series D Preferred Stock so called for
redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Corporation (except the
right to receive from the Corporation the redemption price)
shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Board of Directors shall so
require and the notice shall so state), such shares shall be
redeemed by the Corporation at the redemption price aforesaid.
In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder
thereof.
(e) Any shares of the Series D Preferred Stock which
shall at any time have been redeemed, repurchased or otherwise
acquired by the Corporation shall, upon such redemption,
repurchase or other acquisition, be retired and thereafter have
the status of authorized but unissued shares of Preferred
Stock, without designation as to series until such shares are
once more designated as part of a particular series by the
Board of Directors or a duly authorized committee thereof.
(f) Notwithstanding the foregoing provisions of this
paragraph 3, unless the full cumulative dividends on all
outstanding shares of the Series D Preferred Stock shall have
been paid or contemporaneously are declared and paid through
the last Dividend Payment Date, no shares of the Series D
Preferred Stock shall be redeemed unless all outstanding shares
of the Series D Preferred Stock are simultaneously redeemed,
and the Corporation shall not purchase or otherwise acquire any
shares of the Series D Preferred Stock; provided, however, that
the foregoing shall not prevent the purchase or acquisition of
shares of the Series D Preferred Stock pursuant to a purchase
or exchange offer made on the same terms to holders of all
outstanding shares of the Series D Preferred Stock.
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(g) Any redemption, repurchase or other acquisition by
the Corporation of shares of Series D Preferred Stock may, to
the extent required to be made out of funds legally available
for such purpose, be made to the extent of any unreserved and
unrestricted capital surplus attributable to such shares in
addition to any other surplus, profits, earnings or other funds
or amounts legally available for such purpose.
4. Voting. The shares of the Series D Preferred Stock shall
not have any voting powers, either general or special, except that:
(a) If on the date used to determine stockholders of
record for any annual meeting of stockholders at which
directors are to be elected, a Default in Preferred Dividends
(as hereinafter defined) on the Series D Preferred Stock shall
exist, the number of directors constituting the Board of
Directors shall be increased by two, and the holders of the
Series D Preferred Stock and all other series of Preferred
Stock ranking on a parity with the Series D Preferred Stock as
to dividends and upon liquidation and upon which like voting
rights have been conferred and are exercisable (whether or not
the holders of such other series of Preferred Stock would be
entitled to vote for the election of directors if such Default
in Preferred Dividends did not exist) shall have the right at
such meeting, voting together as a single class without regard
to series, to the exclusion of the holders of Common Stock, to
elect two directors of the Corporation to fill such newly
created directorships. Each director elected by the holders of
shares of the Preferred Stock (herein called a "Preferred
Director") as aforesaid shall continue to serve as such
director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a
Default in Preferred Dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed
except by, the vote of the holders of record of the outstanding
shares of the Series D Preferred Stock and all other series of
Preferred Stock ranking on a parity with the Series D Preferred
Stock as to dividends and upon liquidation, voting together as
a single class without regard to series, at a meeting of the
stockholders, or of the holders of shares of such Preferred
Stock, called for the purpose. So long as a Default in
Preferred Dividends on the Preferred Stock shall exist (i) any
vacancy in the office of a Preferred Director may be filled
(except as provided in the following clause (ii)) by an
instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (ii) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock entitled to vote with respect to the removal of
such Preferred Director, voting together as a single class
without regard to series, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by
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the remaining Preferred Director shall be deemed, for all
purposes hereof, to be a Preferred Director. Whenever the term
of office of the Preferred Directors shall end and no Default
in Preferred Dividends shall exist, the number of directors
constituting the Board of Directors shall be reduced by two.
For the purposes hereof, a "Default in Preferred Dividends" on
any series of Preferred Stock shall be deemed to have occurred
whenever the amount of accrued and unpaid dividends upon such
series of the Preferred Stock shall be equivalent to six full
quarterly dividends or more, and, having so occurred, such
default shall be deemed to exist thereafter until, but only
until, all accrued dividends on all shares of the Preferred
Stock of such series then outstanding shall have been paid
through the last Dividend Payment Date;
(b) Whether or not the General Corporation Law of the
State of Delaware so provides, the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
Series D Preferred Stock and all other series of Preferred
Stock ranking on a parity with the Series D Preferred Stock as
to dividends and upon liquidation, voting together as a single
class without regard to series, shall be required for the
Corporation to create a new class or increase an existing class
of stock having rights in respect of the payment of dividends
or in liquidation prior to the Series D Preferred Stock or any
other series of Preferred Stock ranking on a parity with the
Series D Preferred Stock as to dividends and upon liquidation,
or to change the terms, limitations or relative rights or
preferences of the Series D Preferred Stock or any other series
of Preferred Stock ranking on a parity with the Series D
Preferred Stock as to dividends and upon liquidation, either
directly or by increasing the relative rights of the shares of
another class; and
(c) Whether or not the General Corporation Law of the
State of Delaware so provides, the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
Series D Preferred Stock voting together as a single class
without regard to series with the holders of any one or more
other series of Preferred Stock ranking on a parity with the
Series D Preferred Stock as to dividends and upon liquidation
and similarly affected shall be required for authorizing,
effecting, or validating the amendment, alteration or repeal of
any of the provisions of the Certificate of Incorporation or of
any Certificate of Amendment thereof or any similar document
(including any Certificate of Amendment or any similar document
relating to any series of the Preferred Stock) which would
adversely affect the preferences, rights or privileges of the
Series D Preferred Stock.
(d) Whether or not the General Corporation Law of the
State of Delaware so provides, the affirmative vote of the
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holders of at least two-thirds of the outstanding shares of the
Series D Preferred Stock and all other series of Preferred
Stock ranking on a parity with the Series D Preferred Stock as
to dividends and upon liquidation and upon which like voting
rights have been conferred, voting together as a single class
without regard to series, shall be required for the Corporation
to issue any authorized shares of preferred stock of the
Corporation ranking prior to the Series D Preferred Stock
either as to dividends or upon liquidation.
5. Liquidation Rights. (a) Upon the dissolution, liquidation
or winding up of the Corporation, whether voluntary or
involuntary, the holders of the shares of the Series D
Preferred Stock shall be entitled to receive and to be paid out
of the assets of the Corporation available for distribution to
stockholders, before any payment or distribution shall be made
on the Common Stock or on any other class of stock ranking
junior to the Preferred Stock upon liquidation, the amount of
$50.00 per share, plus accrued and unpaid dividends thereon to
the date of final distribution.
(b) Neither the sale, lease or exchange (for cash,
shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation
nor the merger or consolidation of the Corporation into or with
any other corporation or the merger or consolidation of any
other corporation into or with the Corporation, shall be deemed
to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this paragraph 5.
(c) After the payment to the holders of the shares of
the Series D Preferred Stock of the full preferential amounts
provided for in this paragraph 5, the holders of the Series D
Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.
(d) In the event the assets of the Corporation
available for distribution to the holders of shares of the
Series D Preferred Stock upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts
to which such holders are entitled pursuant to paragraph 5(a)
of this Section M, no such distribution shall be made on
account of any shares of any other series of the Preferred
Stock or any other class of stock of the Corporation ranking on
a parity with the shares of the Series D Preferred Stock upon
such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of
the shares of the Series D Preferred Stock, ratably, in
proportion to the full distributable amounts to which holders
of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
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6. Ranking. For purposes of the foregoing paragraphs 1 through
5 of this Section M, any stock of any class or classes of the Corporation
shall be deemed to rank:
(a) prior to the shares of the Series D Preferred
Stock, either as to dividends or upon liquidation, if the
holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, as the case may be, in
preference or priority to the holders of shares of the Series D
Preferred Stock;
(b) on a parity with shares of the Series D Preferred
Stock, either as to dividends or upon liquidation, whether or
not the dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if
any, be different from those of the Series D Preferred Stock,
if the holders of such stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, whether voluntary
or involuntary, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the
holders of such stock and the holders of shares of the Series D
Preferred Stock; and
(c) junior to shares of the Series D Preferred Stock,
either as to dividends or upon liquidation, if such class or
classes shall be Common Stock or if the holders of shares of
the Series D Preferred Stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, whether voluntary
or involuntary, as the case may be, in preference or priority
to the holders of shares of such class or classes.
Notwithstanding any other provision of this Section M or of
Section L, the Series D Preferred Stock shall rank on a parity (within the
meaning of paragraph 6(b) of this Section M) with the Corporation's 8.125%
Cumulative Preferred Stock, Series A, 5.50% Convertible Preferred Stock,
Series B, $45,000 Cumulative Redeemable Preferred Stock, Series Z and
Series C Preferred Stock as to dividends and distributions of assets.
N. $45,000 CUMULATIVE REDEEMABLE PREFERRED STOCK, SERIES Z
1. Designation and Number of Shares. The designation of such
series shall be $45,000 Cumulative Redeemable Preferred Stock, Series Z
(the "Series Z Preferred Stock"), and the number of shares constituting
such series shall be 4,444. Shares of the Series Z Preferred Stock shall
have a par value of $1.00 per share and the amount of $45,000 shall be the
"liquidation value" of each share of the Series Z Preferred Stock. The
number of authorized shares of Series Z Preferred Stock may be reduced (but
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not below the number of shares thereof then outstanding) by further
resolution duly adopted by the Board of Directors or the Executive
Committee and by the filing of a certificate pursuant to the provisions of
the General Corporation Law of the State of Delaware stating that such
reduction has been so authorized, but the number of authorized shares of
Series Z Preferred Stock shall not be increased.
2. Dividends. (a) Dividends on each share of Series Z
Preferred Stock shall be payable with respect to each quarter
ending on February 15, May 15, August 15 and November 15 of
each year ("Quarterly Dividend Period"), in arrears, payable
commencing on March 1, 1993 and on each June 1, September 1,
December 1 and March 1 thereafter ("Dividend Payment Dates")
with respect to the quarter then ended, at a rate per annum
equal to the Applicable Rate (as defined in paragraph (b) of
this Section 2) in effect during the Quarterly Dividend Period
to which such dividend relates, multiplied by the liquidation
value ($45,000) of each such share. Such dividends shall be
cumulative from December 16, 1992 and shall be payable, when
and as declared by the Board of Directors, out of assets
legally available for such purpose, on each Dividend Payment
Date as set forth above. Each such dividend shall be paid to
the holders of record of shares of the Series Z Preferred Stock
as they appear on the books of the Corporation on such record
date, not exceeding 30 days preceding the payment date thereof,
as shall be fixed in advance by the Board of Directors of the
Corporation. Dividends in arrears for any past Quarterly
Dividend Periods may be declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of
record on such date, not exceeding 45 days preceding the
payment date thereof, as may be fixed by the Board of Directors
of the Corporation.
(b) Except as provided below in this paragraph, the
"Applicable Rate" for any Quarterly Dividend Period shall be
85% of the daily average of the Dealer Offer Rates for 30-day
Commercial Paper placed by dealers whose firm's bond ratings
are AA or equivalent, as reported in the Federal Reserve Board
statistical release designated H-15 and converted to a 360-day
yield basis and rounded to two decimal places. The daily
average shall be calculated by the treasurer of the
Corporation, whose calculation shall be final and conclusive,
by dividing (i) the sum of (A) for each day in the Quarterly
Dividend Period for which such rate is so published, the Dealer
Offered Rate for such date, and (B) for each day in the
Quarterly Dividend Period for which such rate is not so
published, the Dealer Offered Rate for the most recent date for
which such rate was so published, by (ii) the number of days in
the Quarterly Dividend Period. Dividends payable on the
Series Z Preferred Stock for any period shall be computed on
the basis of the actual number of days elapsed in the period
for which such dividends are payable (whether a full or partial
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Quarterly Dividend Period) and based upon a year of 360 days.
If the Corporation determines in good faith that for any reason
the Applicable Rate cannot be determined for any Quarterly
Dividend Period, then the Applicable Rate in effect for the
preceding Quarterly Dividend Period shall be continued for such
Quarterly Dividend Period.
3. Redemption. (a) The Corporation, at its sole option, out
of funds legally available therefor, may redeem shares of the
Series Z Preferred Stock, as a whole or in part, at any time or
from time to time, at a redemption price of $45,000 per share,
plus, in each case, an amount equal to accrued and unpaid
dividends thereon to the date fixed for redemption (the
"Redemption Price").
(b) In the event that fewer than all the outstanding
shares of the Series Z Preferred Stock are to be redeemed, the
shares to be redeemed from each holder of record shall be
determined by lot or pro rata as may be determined by the Board
of Directors or by any other method as may be determined by the
Board of Directors in its sole discretion to be equitable.
(c) In the event the Corporation shall redeem shares of
the Series Z Preferred Stock, written notice of such redemption
shall be given by first class mail, postage prepaid, mailed not
less than 30 days prior to the redemption date, to each holder
of record of the shares to be redeemed, at such holder's
address as the same appears on the books of the Corporation.
Each such notice shall state: (i) the redemption date; (ii) the
number of shares of the Series Z Preferred Stock to be redeemed
and, in the case of a partial redemption pursuant to Section
3(b) hereof, the identification (by the number of the
certificate or otherwise) and the number of shares of Series Z
Preferred Stock evidenced thereby to be redeemed; (iii) the
Redemption Price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of the
Redemption Price; and (v) that dividends on the shares to be
redeemed will cease to accrue on such redemption date.
(d) If notice of redemption shall have been duly given,
and if, on or before the redemption date specified therein, all
funds necessary for such redemption shall have been set aside
by the Corporation, separate and apart from its other funds, in
trust for the pro rata benefit of the holders of the shares
called for redemption, so as to be and continue to be available
therefor, then, notwithstanding that any certificate for shares
so called for redemption shall not have been surrendered for
cancellation, all shares so called for redemption shall no
longer be deemed outstanding on and after such redemption date,
and all rights with respect to such shares shall forthwith on
such redemption date cease and terminate, except only the right
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of the holders thereof to receive the amount payable on
redemption thereof, without interest.
If such notice of redemption shall have been duly given
or if the Corporation shall have given to the bank or trust
company hereinafter referred to irrevocable authorization
promptly to give such notice, and if on or before the
redemption date specified therein the funds necessary for such
redemption shall have been deposited by the Corporation with
such bank or trust company in trust for the pro rata benefit of
the holders of the shares called for redemption, then,
notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation,
from and after the time of such deposit, all shares so called
for redemption shall no longer be deemed to be outstanding and
all rights with respect to such shares shall forthwith cease
and terminate, except only the right of the holders thereof to
receive from such bank or trust company at any time after the
time of such deposit the funds so deposited, without interest.
The aforesaid bank or trust company shall be a bank or trust
company organized and in good standing under the laws of the
United States of America or of the State of New York, doing
business in the Borough of Manhattan, The City of New York,
having capital surplus and undivided profits aggregating at
least $50,000,000 according to its latest published statement
of condition, and shall be identified in the notice of
redemption. Any interest accrued on such funds shall be for
the benefit of the Corporation. Any funds so set aside or
deposited, as the case may be, and unclaimed at the end of one
year from such redemption date shall, to the extent permitted
by law, be released or repaid to the Corporation, after which
repayment the holders of the shares so called for redemption
shall look only to the Corporation for payment thereof.
(e) Any shares of the Series Z Preferred Stock that
shall at any time have been redeemed shall, after such
redemption, have the status of authorized but unissued shares
of Preferred Stock, without designation as to series until such
shares are once again designated as part of a particular series
by the Board of Directors.
(f) Notwithstanding the foregoing provisions of this
Section 3, unless the full cumulative dividends on all
outstanding shares of the Series Z Preferred Stock shall have
been paid or contemporaneously are declared and paid for all
past Quarterly Dividend Periods, no shares of the Series Z
Preferred Stock shall be redeemed unless all outstanding shares
of the Series Z Preferred Stock are simultaneously redeemed,
and neither the Corporation nor a subsidiary of the Corporation
shall purchase or otherwise acquire for valuable consideration
any shares of the Series Z Preferred Stock, provided, however,
that the foregoing shall not prevent the purchase or
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acquisition of shares of the Series Z Preferred Stock pursuant
to a purchase or exchange offer made on the same terms to
holders of all the outstanding shares of the Series Z Preferred
Stock and mailed to the holders of record of all such
outstanding shares at such holders' addresses as the same
appear on the books of the Corporation and provided further
that if some, but less than all, of the shares of the Series Z
Preferred Stock are to be purchased or otherwise acquired
pursuant to such purchase or exchange offer and the number of
shares so tendered exceeds the number of shares so to be
purchased or otherwise acquired by the Corporation, the shares
of the Series Z Preferred Stock so tendered will be purchased
or otherwise acquired by the Corporation on a pro rata basis
according to the number of such shares duly tendered by each
holder so tendering shares of the Series Z Preferred Stock for
such purchase or exchange.
(g) If all the outstanding shares of the Series Z
Preferred Stock shall not have been redeemed on or prior to
September 15, 1998, each holder of the shares of the Series Z
Preferred Stock remaining outstanding shall have the right to
require that the Corporation repurchase such holder's shares,
in whole, at a purchase price (the "Purchase Price") in cash
equal to 100% of the liquidation value of such share, together
with all accrued and unpaid dividends on such shares to the
date of such repurchase (the "Repurchase Date"), in accordance
with the procedures set forth below.
Within 30 days prior to September 15, 1998, the Corporation
shall send by first-class mail, postage prepaid, to each holder
of the shares of the Series Z Preferred Stock, at its address
as the same appears on the books of the Corporation, a notice
stating the Repurchase Date, which shall be no earlier than 45
days nor later than 60 days from the date such notice is
mailed, and the instructions a holder must follow in order to
have his shares of the Series Z Preferred Stock repurchased in
accordance with this Section 3. Holders electing to have
shares of the Series Z Preferred Stock repurchased will be
required to surrender the certificate or certificates
representing such shares to the Corporation at the address
specified in the notice at least five business days prior to
the Repurchase Date.
4. Conversion or Exchange; Sinking Fund. The holders of
shares of the Series Z Preferred Stock shall not have any rights herein to
convert such shares into, or exchange such shares for, shares of any other
class or classes or of any other series of any class or classes of capital
stock of the Corporation; nor shall the holders of shares of the Series Z
Preferred Stock be entitled to the benefits of a sinking fund in respect of
their shares of the Series Z Preferred Stock.
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5. Voting. (a) Except as otherwise provided in this
Section 5 or as otherwise required by law, the Series Z
Preferred Stock shall have no voting rights.
(b) If six quarterly dividends (whether or not
consecutive) payable on shares of Series Z Preferred Stock are
in arrears at the time of the record date to determine
stockholders for any annual meeting of stockholders of the
Corporation, the number of directors of the Corporation shall
be increased by two, and the holders of shares of Series Z
Preferred Stock (voting separately as a class with the holders
of shares of any one or more other series of Preferred Stock
upon which like voting rights have been conferred and are
exercisable) shall be entitled at such annual meeting of
stockholders to elect two directors of the Corporation, with
the remaining directors of the Corporation to be elected by the
holders of shares of any other class or classes or series of
stock entitled to vote therefor. In any such election, holders
of shares of Series Z Preferred Stock shall have one vote for
each share held.
At all meetings of stockholders at which holders of Preferred
Stock shall be entitled to vote for Directors as a single
class, the holders of a majority of the outstanding shares of
all classes and series of capital stock of the Corporation
having the right to vote as a single class shall be necessary
to constitute a quorum, whether present in person or by proxy,
for the election by such single class of its designated
Directors. In any election of Directors by stockholders voting
as a class, such Directors shall be elected by the vote of at
least a plurality of shares held by such stockholders present
or represented at the meeting. At any such meeting, the
election of Directors by stockholders voting as a class shall
be valid notwithstanding that a quorum of other stockholders
voting as one or more classes may not be present or represented
at such meeting.
(c) Any director who has been elected by the holders of
shares of Series Z Preferred Stock (voting separately as a
class with the holders of shares of any one or more other
series of Preferred Stock upon which like voting rights have
been conferred and are exercisable) may be removed at any time,
with or without cause, only by the affirmative vote of the
holders of the shares at the time entitled to cast a majority
of the votes entitled to be cast for the election of any such
director at a special meeting of such holders called for that
purpose, and any vacancy thereby created may be filled by the
vote of such holders. If a vacancy occurs among the Directors
elected by such stockholders voting as a class, other than by
removal from office as set forth in the preceding sentence,
such vacancy may be filled by the remaining Director so
elected, or his or her successor then in office, and the
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Director so elected to fill such vacancy shall serve until the
next meeting of stockholders for the election of Directors.
(d) The voting rights of the holders of Series Z
Preferred Stock to elect Directors as set forth above shall
continue until all dividend arrearages on the Series Z
Preferred Stock have been paid or declared and set apart for
payment. Upon the termination of such voting rights, the terms
of office of all persons who may have been elected pursuant to
such voting rights shall immediately terminate, and the number
of directors of the Corporation shall be decreased by two.
(e) Without the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to
be cast by the holders of the total number of shares of
Preferred Stock then outstanding, voting separately as a class
without regard to series, with the holders of shares of
Series Z Preferred Stock being entitled to cast one vote per
share, the Corporation may not:
(i) create any class of stock that shall have
preference as to dividends or distributions of assets
over the Series Z Preferred Stock; or
(ii) alter or change the provisions of the
Certificate of Incorporation (including any Certificate
of Amendment or Certificate of Designation relating to
the Series Z Preferred Stock) so as to adversely affect
the powers, preferences or rights of the holders of
shares of Series Z Preferred Stock; provided, however,
that if such creation or such alteration or change
would adversely affect the powers, preferences or
rights of one or more, but not all, series of Preferred
Stock at the time outstanding, such alteration or
change shall require consent of the holders of shares
entitled to cast at least two-thirds of the votes
entitled to be cast by the holders of all of the shares
of all such series so affected, voting as a class.
6. Liquidation Rights. (a) Upon the dissolution, liquidation
or winding up of the Corporation, the holders of the shares of
the Series Z Preferred Stock shall be entitled to receive out
of the assets of the Corporation available for distribution to
stockholders, before any payment or distribution shall be made
on the Common Stock or on any other class or series of stock
ranking junior to shares of the Series Z Preferred Stock as to
amounts distributable on dissolution, liquidation or winding
up, $45,000 per share, plus an amount equal to all dividends
(whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
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(b) Neither the merger or consolidation of the
Corporation into or with any other corporation nor the merger
or consolidation of any other corporation into or with the
Corporation, shall be deemed to be a dissolution, liquidation
or winding up, voluntary or involuntary, of the Corporation for
the purpose of this Section 6.
(c) After the payment to the holders of the shares of
the Series Z Preferred Stock of the full preferential amounts
provided for in this Section 6, the holders of the Series Z
Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.
(d) In the event the assets of the Corporation
available for distribution to the holders of shares of the
Series Z Preferred Stock upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts
to which such holders are entitled pursuant to paragraph (a) of
this Section 6, the holders of shares of the Series Z Preferred
Stock and of any shares of Preferred Stock of any series or any
other stock of the Corporation ranking, as to the amounts
distributable upon dissolution, liquidation or winding up, on a
parity with the Series Z Preferred Stock, shall share ratably
in any distribution in proportion to the full respective
preferential amounts to which they are entitled.
7. Ranking of Stock of the Corporation. In respect of the
Series Z Preferred Stock, any stock of any class or classes of the
Corporation shall be deemed to rank:
(a) prior to the shares of the Series Z Preferred Stock
or prior to the Series Z Preferred Stock, either as to
dividends or upon liquidation, if the holders of such stock
shall be entitled to either the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding
up of the Corporation, whether voluntary or involuntary, as the
case may be, in preference or priority to the holders of shares
of the Series Z Preferred Stock;
(b) on a parity with shares of the Series Z Preferred
Stock or on a parity with the Series Z Preferred Stock, either
as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates, redemption amounts per
share or liquidation values per share or sinking fund
provisions, if any, are different from those of the Series Z
Preferred Stock, if the holders of such stock shall be entitled
to either the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, as the case may be, in
proportion to their respective dividend rates or liquidation
values, without preference or priority, one over the other, as
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between the holders of such stock and the holders of shares of
the Series Z Preferred Stock, provided in any such case such
stock does not rank prior to the Series Z Preferred Stock; and
(c) junior to shares of the Series Z Preferred Stock or
junior to the Series Z Preferred Stock, as to dividends and
upon liquidation, if such stock shall be Common Stock or if the
holders of shares of the Series Z Preferred Stock shall be
entitled to receipt of dividends and of amounts distributable
upon dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, as the case may be, in
preference or priority to the holders of such stock.
The Series Z Preferred Stock is on a parity with the 8.125%
Cumulative Preferred Stock, Series A, of the Corporation, heretofore
authorized for issuance by the Corporation.
8. Definition. When used herein, the term "subsidiary" shall
mean any corporation a majority of whose voting stock ordinarily entitled
to elect directors is owned, directly or indirectly, by the Corporation.
9. Limitation on Dividends on Junior Stock. So long as any
Series Z Preferred Stock shall be outstanding, without the consent of the
holders of two-thirds of the shares of the Series Z Preferred Stock then
outstanding the Corporation shall not declare any dividends on the Common
Stock or any other stock of the Corporation ranking as to dividends or
distributions of assets junior to the Series Z Preferred Stock (the Common
Stock and any such other stock being herein referred to as "Junior Stock"),
or make any payment on account of, or set apart money for, a sinking fund
or other similar fund or agreement for the purchase, redemption or other
retirement of any shares of Junior Stock, or make any distribution in
respect thereof, whether in cash or property or in obligations or stock of
the Corporation, other than a distribution of Junior Stock (such dividends,
payments, setting apart and distributions being herein called "Junior Stock
Payments"), unless the following conditions shall be satisfied at the date
of such declaration in the case of any such dividend, or the date of such
setting apart in the case of any such fund, or the date of such payment or
distribution in the case of any other Junior Stock Payment:
(a) full cumulative dividends shall have been paid or
declared and set apart for payment on all outstanding shares of
Preferred Stock other than Junior Stock; and
(b) the Corporation shall not be in default or in
arrears with respect to any sinking fund or other similar fund
or agreement for the purchase, redemption or other retirement
of any shares of Preferred Stock other than Junior Stock;
provided, however, that any funds theretofore deposited in any sinking fund
or other similar fund with respect to any Preferred Stock in compliance
with the provisions of such sinking fund or other similar fund may
thereafter be applied to the purchase or redemption of such Preferred Stock
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in accordance with the terms of such sinking fund or other similar fund
regardless of whether at the time of such application full cumulative
dividends upon shares of Series Z Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set apart for
payment by the Corporation.
10. Waiver, Modification and Amendment. Notwithstanding
any other provisions relating to the Series Z Preferred Stock, any of the
rights or benefits of the holders of the Series Z Preferred Stock may be
waived, modified or amended with the consent of the holders of all of the
then outstanding shares of Series Z Preferred Stock. Any such waiver,
modification or amendment shall be deemed to have the same effect as
satisfaction in full of any such right or benefit as though actually
received by such holders.
FIFTH: The Directors need not be elected by written ballot
unless and to the extent the By-Laws so require.
SIXTH: The books and records of the Corporation may be kept
(subject to any mandatory requirement of law) outside the State of Delaware
at such place or places as may be determined from time to time by or
pursuant to authority granted by the Board of Directors or by the By-Laws.
SEVENTH: (A) The business and affairs of the Corporation shall be
managed by or under the direction of a Board of Directors, the exact number
of directors to be determined from time to time by resolution adopted by
affirmative vote of a majority of the entire Board of Directors. The
directors shall be divided into three classes, designated Class I, Class II
and Class III. Each class shall consist, as nearly as may be possible, of
one-third of the total number of directors constituting the entire Board of
Directors. Class I directors shall be elected initially for a one-year
term, Class II directors initially for a two-year term and Class III
directors initially for a three-year term. At each succeeding annual
meeting of stockholders beginning in 1989, successors to the class of
directors whose term expires at that annual meeting shall be elected for a
three-year term. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as possible, and any
additional director of any class elected to fill a vacancy resulting from
an increase in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in
the number of directors shorten the term of any incumbent director. A
director shall hold office until the annual meeting for the year in which
his term expires and until his successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Any vacancy on the Board of
Directors that results from an increase in the number of directors may be
filled by a majority of the Board of Directors then in office, provided
that a quorum is present, and any other vacancy occurring in the Board of
Directors may be filled by a majority of the directors then in office, even
if less than a quorum, or a sole remaining director. Any director elected
to fill a vacancy not resulting from an increase in the number of directors
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shall have the same remaining term as that of his predecessor.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have
the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be
governed by the terms of this Certificate of Incorporation applicable
thereto, and such directors so elected shall not be divided into classes
pursuant to this Article SEVENTH unless expressly provided by such terms.
B. Notwithstanding any other provision of this Certificate of
Incorporation, the affirmative vote of the holders of at least seventy-five
percent (75%) of the voting power of the shares entitled to vote at an
election of directors shall be required to amend, alter, change or repeal,
or to adopt any provision as part of this Certificate of Incorporation
inconsistent with the purpose and intent of, this Article SEVENTH.
EIGHTH: A. In addition to any affirmative vote required by law
or this Certificate of Incorporation or the By-Laws of the Corporation, and
except as otherwise expressly provided in Section B of this Article EIGHTH,
a Business Combination (as hereinafter defined) shall require the
affirmative vote of not less than sixty-six and two-thirds percent (66 2/3%)
of the votes entitled to be cast by the holders of all the then outstanding
shares of Voting Stock (as hereinafter defined), voting together as a
single class, excluding from such number of outstanding shares and from
such required vote, Voting Stock beneficially owned by any Interested
Stockholder (as hereinafter defined). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a
lesser percentage or separate class vote may be specified, by law or in any
agreement with any national securities exchange or otherwise.
B. The provisions of Section A of this Article EIGHTH shall
not be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote, if any, as is
required by law or by any other provision of this Certificate of
Incorporation or the By-Laws of the Corporation or otherwise, if all of the
conditions specified in either of the following Paragraphs 1 or 2 are met;
provided, however, that in the case of a Business Combination that does not
involve the payment of consideration to the holders of the Corporation's
outstanding Capital Stock (as hereinafter defined), then the provisions of
Section A of this Article EIGHTH must be satisfied unless the conditions
specified in the following Paragraph 1 are met:
1. The Business Combination shall have been approved (and such
approval not subsequently rescinded) by a majority of the Continuing
Directors (as hereinafter defined), either specifically or as a transaction
which is within an approved category of transactions with an Interested
Stockholder. Such approval may be given prior to or subsequent to the
acquisition of, or announcement or public disclosure of the intention to
acquire, beneficial ownership of the Voting Stock that caused the
Interested Stockholder to become an Interested Stockholder; provided,
however, that approval shall be effective for the purposes of this
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Paragraph 1 only if obtained at a meeting at which a Continuing Director
Quorum (as hereinafter defined) was present; and provided further, that
such approval may be rescinded by a majority of the Continuing Directors at
any meeting at which a Continuing Director Quorum is present and which is
held prior to consummation of the proposed Business Combination.
2. All of the following conditions, if applicable, shall have
been met:
The aggregate amount of cash and the Fair Market Value (as
hereinafter defined), as of the date of the consummation of the Business
Combination (the "Consummation Date"), of consideration other than cash to
be received per share by holders of shares of any class or series of
outstanding Capital Stock in such Business Combination shall be at least
equal to the amount determined, as applicable, under Paragraph 2(a) or 2(b)
below:
(a) if the Fair Market Value per share of such class or
series of Capital Stock on the date of the first public
announcement of the proposed Business Combination (the
"Announcement Date") is less than the Fair Market Value per
share of such class or series of Capital Stock on the date on
which the Interested Stockholder became an Interested
Stockholder (the "Determination Date"), an amount (the "Premium
Capital Stock Price") equal to the sum of (i) the Fair Market
Value per share of such class or series of Capital Stock on the
Announcement Date plus (ii) the product of the Fair Market
Value per share of such class or series of Capital Stock on the
Announcement Date multiplied by the highest percentage premium
over the closing sale price per share of such class or series
of Capital Stock paid on any day by or on behalf of the
Interested Stockholder for any share of such class or series of
Capital Stock in connection with the acquisition by the
Interested Stockholder of beneficial ownership of shares of
such class or series of Capital Stock within the two-year
period immediately prior to the Announcement Date or in the
transaction in which it became an Interested Stockholder;
provided, however, that if the Premium Capital Stock Price as
determined above is greater than the highest per share price
paid by or on behalf of the Interested Stockholder for any
share of such class or series of Capital Stock in connection
with the acquisition by the Interested Stockholder of
beneficial ownership of shares of such class or series of
Capital Stock within the two-year period immediately prior to
the Announcement Date, the amount required under this Paragraph
2(a) shall be the higher of (A) such highest price paid by or
on behalf of the Interested Stockholder, and (B) the Fair
Market Value per share of such class or series of Capital Stock
on the Announcement Date (the Fair Market Value and other
prices per share of such class or series of Capital Stock
referred to in this Paragraph 2(a) shall be in each case
appropriately adjusted for any subsequent stock split, stock
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dividend, subdivision or reclassification with respect to such
class or series of Capital Stock); or
(b) if the Fair Market Value per share of such class or
series of Capital Stock on the Announcement Date is greater
than or equal to the Fair Market Value per share of such class
or series of Capital Stock on the Determination Date, in each
case as appropriately adjusted for any subsequent stock split,
stock dividend, subdivision or reclassification with respect to
such class or series of Capital Stock, a price per share equal
to the Fair Market Value per share of such class or series of
Capital Stock on the Announcement Date.
The provisions of this Paragraph 2 shall be required to be met
with respect to every class or series of outstanding Capital Stock which is
the subject of the Business Combination whether or not the Interested
Stockholder has previously acquired beneficial ownership of any shares of a
particular class or series of Capital Stock.
(c) After the Determination Date and prior to the
Consummation Date of such Business Combination: (i) except as
approved by a majority of the Continuing Directors at a meeting
at which a Continuing Director Quorum is present, there shall
have been no failure to declare and pay at the regular date
therefor any full quarterly dividends (whether or not
cumulative) payable in accordance with the terms of any
outstanding Capital Stock; (ii) there shall have been an
increase in the annual rate of dividends paid on the Common
Stock as necessary to reflect any reclassification (including
any reverse stock split), recapitalization, reorganization or
any similar transaction that has the effect of reducing the
number of outstanding shares of Common Stock, unless the
failure so to increase such annual rate is approved by a
majority of the Continuing Directors at a meeting at which a
Continuing Director Quorum is present; and (iii) such
Interested Stockholder shall not have become the beneficial
owner of any additional shares of Capital Stock except as part
of the transaction that results in such Interested Stockholders
becoming an Interested Stockholder and except in a transaction
that, after giving effect thereto, would not result in any
increase in the Interested Stockholder's percentage beneficial
ownership of any class or series of Capital Stock.
(d) After the Determination Date, such Interested
Stockholder shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder of the
Corporation), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in anticipation
of or in connection with such Business Combination or
otherwise.
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(e) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (the "Act") (or any subsequent
provisions replacing such Act, rules or regulations), shall be
mailed to all stockholders of the Corporation at least 30 days
prior to the consummation of such Business Combination (whether
or not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions). The
proxy or information statement shall contain on the first page
thereof, in a prominent place, any statement as to the
advisability (or inadvisability) of the Business Combination
that the Continuing Directors, or any of them, may choose to
make and, if deemed advisable by a majority of the Continuing
Directors, the opinion of an investment banking firm selected
by a majority of the Continuing Directors as to the fairness
(or not) of the terms of the Business Combination from a
financial point of view to the holders of the outstanding
shares of Capital Stock other than the Interested Stockholder
and its Affiliates or Associates (as hereinafter defined), such
investment banking firm to be paid a reasonable fee for its
services by the Corporation.
(f) Such Interested Stockholder shall not have made any
major change in the Corporation's business or equity capital
structure without the approval of at least a majority of the
Continuing Directors.
C. The following definitions shall apply with respect to this
Article EIGHTH:
1. The term "Business Combination" shall mean:
(a) any merger or consolidation of the Corporation or
any Major Subsidiary (as hereinafter defined) with, or any
sale, lease, exchange, transfer or other disposition of
substantially all the assets or outstanding shares of capital
stock of the Corporation or any Major Subsidiary with or for
the benefit of, (i) any Interested Stockholder or (ii) any
other company (whether or not itself an Interested Stockholder)
which is or after such merger, consolidation or sale, lease,
exchange, transfer or other disposition would be an Affiliate
or Associate of an Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition or security arrangement,
investment, loan, advance, guarantee, agreement to purchase,
agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a
series of transactions) with or for the benefit of any
Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder involving any assets, securities or
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commitments of the Corporation, any Major Subsidiary or any
Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder having an aggregate Fair Market Value
and/or involving aggregate commitments of Twenty-Five Million
dollars ($25,000,000) or more; or
(c) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries (as hereinafter defined) or any other
transaction (whether or not with or otherwise involving an
Interested Stockholder) that has the effect, directly or
indirectly, of increasing the proportionate share of any class
or series of Capital Stock, or any securities convertible into
Capital Stock or into equity securities of any Subsidiary, that
is beneficially owned by any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder; or
(d) any agreement, contract or other arrangement
providing for any one or more of the actions specified in the
foregoing clauses (a) to (d);
provided, however, that no such aforementioned transaction shall be deemed
to be a Business Combination subject to this Article EIGHTH if the
Announcement Date of such transaction occurs more than eighteen months
after the Determination Date with respect to such Interested Stockholder.
2. The term "Capital Stock" shall mean all capital stock of
the Corporation authorized to be issued from time to time under Article
FOURTH of this Certificate of Incorporation, including, without limitation,
the Common Stock, and the term "Voting Stock" shall mean all Capital Stock
which by its terms may be voted on all matters submitted to stockholders of
the Corporation generally.
3. The term "person" shall mean any individual, firm, company
or other entity and shall include any group comprised of any person and any
other person with whom such person or any Affiliate or Associate of such
person has any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting or disposing of
Capital Stock.
4. The term "Interested Stockholder" shall mean any person
(other than the Corporation or any Subsidiary and other than any profit-
sharing, employee stock ownership or other employee benefit plan of the
Corporation or any trustee of or fiduciary with respect to any such plan
when acting in such capacity) who (a) is, or has announced or publicly
disclosed a plan or intention to become, the beneficial owner of Voting
Stock representing twenty-five percent (25%) or more of the votes entitled
to be cast by the holders of all then outstanding shares of Voting Stock;
or (b) is an Affiliate or Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the beneficial owner of Voting Stock representing twenty-five percent (25%)
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or more of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock.
5. A person shall be a "beneficial owner" of any Capital Stock
(a) which such person or any of its Affiliates or Associates beneficially
owns directly or indirectly; (b) which such person or any of its Affiliates
or Associates has, directly or indirectly, (i) the right to acquire
(whether such right is exercisable immediately or subject only to the
passage of time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding; or (c) which is beneficially owned, directly
or indirectly, by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares of
Capital Stock. For the purposes of determining whether a person is an
Interested Stockholder pursuant to Paragraph 4 of this Section C, the
number of shares of Capital Stock deemed to be outstanding shall include
shares deemed beneficially owned by such person through application of this
Paragraph 5 of Section C, but shall not include any other shares of Capital
Stock that may be reserved for issuance or issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
6. The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 under the Act as
in effect on the date that this Article EIGHTH is approved and adopted by
the Sole Incorporator (the term "registrant" in said Rule 12b-2 meaning in
this case the Corporation); provided, however, that the terms "Affiliate"
and "Associate" shall not include any profit-sharing, employee stock
ownership or other employee benefit plan of the Corporation or any trustee
of or fiduciary with respect to any such plan when acting in such capacity.
7. The term "Subsidiary" means any company of which a majority
of any class of equity security is beneficially owned by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in Paragraph 4 of this Section C, the term
"Subsidiary" shall mean only a company of which a majority of each class of
equity security is beneficially owned by the Corporation.
8. The term "Major Subsidiary" means a Subsidiary having
assets of twenty-five million dollars ($25,000,000) or more as reflected in
the most recent fiscal year-end audited, or if unavailable, unaudited,
consolidated balance sheet, prepared in accordance with applicable state
insurance law with respect to Subsidiaries engaged in an insurance
business, and in accordance with generally accepted accounting principles
with respect to Subsidiaries engaged in a business other than an insurance
business.
9. The term "Continuing Director" means any member of the
Board of Directors of the Corporation, while such person is a member of the
Board of Directors, who is not an Affiliate or Associate or representative
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of the Interested Stockholder and who was a member of the Board of
Directors prior to the time that the Interested Stockholder became an
Interested Stockholder, and any successor of a Continuing Director while
such successor is a member of the Board of Directors, who is not an
Affiliate or Associate or representative of the Interested Stockholder and
who is recommended or elected to succeed the Continuing Director by a
majority of the Continuing Directors; provided, however, that the term
"Continuing Director" shall not include any officer of the Corporation or
of any Affiliate or Associate of the Corporation.
10. The term "Fair Market Value" means (a) in the case of
cash, the amount of such cash; (b) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date
in question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States securities exchange
registered under the Act on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any similar system then in use, or if no
such quotations are available, the fair market value on the date in
question of a share of such stock as determined by a majority of the
Continuing Directors in good faith; and (c) in the case of property other
than cash or stock, the fair market value of such property on the date in
question as determined in good faith by a majority of the Continuing
Directors.
11. The term "Continuing Director Quorum" means at least
two (2) Continuing Directors capable of exercising the power conferred upon
them under the provisions of the Certificate of Incorporation and By-Laws
of the Corporation.
12. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in Paragraph 2 of Section B of this Article EIGHTH shall
include the shares of Common Stock and/or the shares of any other class or
series of Capital Stock retained by the holders of such shares.
D. A majority of the Continuing Directors at a meeting at
which a Continuing Director Quorum is present shall have the power and duty
to determine the purposes of this Article EIGHTH, on the basis of
information known to them after reasonable inquiry, and to determine all
questions arising under this Article EIGHTH, including, without limitation,
(a) whether a person is an Interested Stockholder, (b) the number of shares
of Capital Stock or other securities beneficially owned by any person, (c)
whether a person is an Affiliate or Associate of another, (d) whether the
assets that are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of securities by
the Corporation or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of twenty-five million dollars ($25,000,000) or
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more as provided in Paragraph 1(b) of Section C of this Article EIGHTH and
(e) whether a Subsidiary is a Major Subsidiary. Any such determination
made in good faith shall be binding and conclusive on all parties. In the
event a Continuing Director Quorum cannot be attained at such meeting, all
such determinations shall be made by the Delaware Court of Chancery.
E. Nothing contained in this Article EIGHTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation imposed
by law.
F. The fact that any Business Combination complies with the
provisions of Section B of this Article EIGHTH shall not be construed to
impose any fiduciary duty, obligation or responsibility on the Board of
Directors, or any member thereof, to approve such Business Combination or
recommend its adoption or approval to the stockholders of the Corporation,
nor shall such compliance limit, prohibit or otherwise restrict in any
manner the Board of Directors, or any member thereof, with respect to
evaluations of or actions and responses taken with respect to such Business
Combination.
G. Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that a lesser percentage or separate class vote may be specified by
law, this Certificate of Incorporation or the By-Laws of the Corporation),
the affirmative vote of the holders of not less than sixty-six and two-
thirds percent (66 2/3%) of the votes entitled to be cast by the holders of
all the then outstanding shares of Voting Stock, voting together as a
single class, excluding Voting Stock beneficially owned by any Interested
Stockholder, shall be required to amend, alter, change or repeal, or adopt
any provision as part of this Certificate of Incorporation inconsistent
with the purpose and intent of, this Article EIGHTH; provided, however,
that this Section G shall not apply to, and such sixty-six and two-thirds
percent (66 2/3%) vote shall not be required for, any amendment, repeal or
adoption recommended by the affirmative vote of at least seventy-five
percent (75%) of the entire Board of Directors if all of such directors
voting for such recommendation are persons who would be eligible to serve
as Continuing Directors within the meaning of Section C, Paragraph 9 of
this Article EIGHTH.
NINTH: In furtherance and not in limitation of the powers
conferred upon it by the laws of the State of Delaware, the Board of
Directors shall have the power to adopt, amend, alter or repeal the
Corporation's By-Laws. The affirmative vote of at least sixty-six and two-
thirds percent (66 2/3%) of the entire Board of Directors shall be required to
adopt, amend, alter or repeal the Corporation's By-Laws. Notwithstanding
any other provisions of this Certificate of Incorporation or the By-Laws of
the Corporation (and notwithstanding the fact that a lesser percentage or
separate class vote may be specified by law, this Certificate of
Incorporation or the By-Laws of the Corporation), the affirmative vote of
the holders of at least seventy-five percent (75%) of the voting power of
the shares entitled to vote at an election of directors shall be required
to adopt, amend, alter or repeal, or adopt any provision as part of this
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Certificate of Incorporation inconsistent with the purpose and intent of,
this Article NINTH.
TENTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (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
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.
ELEVENTH: Except as provided in Articles FOURTH, SEVENTH, EIGHTH
and NINTH of this Certificate of Incorporation, the Corporation reserves
the right to amend and repeal any provision contained in this Certificate
of Incorporation in the manner prescribed by the laws of the State of
Delaware, and all rights of stockholders shall be subject to this
reservation.
THE UNDERSIGNED, being a Senior Vice President of the
Corporation, does hereby certify that the Corporation has restated its
Certificate of Incorporation as set forth above, does hereby certify that
such restatement has been duly adopted by the Board of Directors of the
Corporation in accordance with the applicable provisions of Section 245 of
the General Corporation Law of the State of Delaware, and does hereby make
and file this Restated Certificate of Incorporation.
Dated: March 29, 1994
/s/ Charles O. Prince, III
-------------------------------
Charles O. Prince, III
Senior Vice President
ATTEST:
/s/ Mark J. Amrhein
- - ----------------------------
Mark J. Amrhein
Assistant Secretary
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Certificate of Designation
of
Cumulative Adjustable Rate Preferred Stock, Series Y
of
The Travelers Inc.
______________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________
The Travelers Inc., a Delaware corporation (the
"Corporation"), hereby certifies that:
1. The Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation") fixes the
total number of shares of all classes of capital stock that
the Corporation shall have the authority to issue at five
hundred million (500,000,000) shares of common stock, par
value $.01 per share ("Common Stock"), and thirty million
(30,000,000) shares of preferred stock, par value $1.00 per
share ("Preferred Stock").
2. The Certificate of Incorporation expressly
grants to the Board of Directors of the Corporation (the
"Board of Directors") authority to provide for the issuance of
the shares of Preferred Stock in series, and to establish from
time to time the number of shares to be included in each such
series and to fix the designation, powers, preferences and
rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
3. Pursuant to the authority conferred upon the
Board of Directors by the Certificate of Incorporation, the
Board of Directors, by action duly taken on March 23, 1994,
adopted resolutions providing for the Cumulative Adjustable
Rate Preferred Stock, Series Y (the "Series Y Preferred
Stock") as follows:
RESOLVED, that an issue of a series of
Preferred Stock is hereby provided for, and the number of
shares to be included in such series is established, and
the designation, powers, preference and rights, and
qualifications, limitations or restrictions of such
series are fixed hereby as follows:
CUMULATIVE ADJUSTABLE RATE PREFERRED STOCK, SERIES Y
1. Designation and Number of Shares. The
designation of such series shall be Cumulative
Adjustable Rate Preferred Stock, Series Y (the "Series Y
Preferred Stock"), and the number of shares constituting
such series shall be 5,000. Shares of the Series Y
Preferred Stock shall have a par value of $1.00 per
share, and the amount of $100,000 shall be the
"liquidation value" of each share of the Series Y
Preferred Stock.
<PAGE>
The number of authorized shares of Series Y Preferred Stock
may be reduced (but not below the number of shares thereof
then outstanding) by further resolution duly adopted by the
Board of Directors or the Executive Committee and by the
filing of a certificate pursuant to the provisions of the
General Corporation Law of the State of Delaware stating that
such reduction has been so authorized, but the number of
authorized shares of Series Y Preferred Stock shall not be
increased.
2. Dividends. (a) Dividends on each share
of Series Y Preferred Stock shall be payable with respect
to each quarter beginning on the last day of March, June,
September and December of each year and ending on the day
immediately prior to the first day of the next succeeding
period ("Quarterly Dividend Period"), in arrears, payable
commencing on June 30, 1994, and on each September 30,
December 31, March 31 and June 30 thereafter with respect
to the quarter then ended, provided that if such day is
not a Business Day (as hereinafter defined), such
dividend shall be paid on the next succeeding Business
Day (each a "Dividend Payment Date"), at a rate per annum
equal to the Applicable Rate (as determined in accordance
with paragraph (b) or (c) of this Section 2, as
applicable) in effect for the Quarterly Dividend Period
to which such dividend relates, multiplied by the
liquidation value of each such share. Such dividends
shall be cumulative from March 31, 1994, and shall be
payable, when and as declared by the Board of Directors,
out of assets legally available for such purpose, on each
Dividend Payment Date as set forth above. Each such
dividend shall be paid to the holders of record of shares
of the Series Y Preferred Stock as they appear on the
books of the Corporation on such record date, not
exceeding 30 days preceding the payment date thereof, as
shall be fixed in advance by the Board of Directors of
the Corporation. Dividends in arrears for any past
Quarterly Dividend Periods may be declared and paid at
any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as
may be fixed by the Board of Directors of the
Corporation.
(b) The Applicable Rate for each Quarterly
Dividend Period commencing prior to December 31, 1995
shall be 4.85%.
(c) The Applicable Rate for each Quarterly
Dividend Period commencing on or after December 31, 1995,
shall be equal to the greater of (i) the Short Term Rate
(as hereinafter defined) on the Business Day immediately
preceding the Dividend Payment Date for the immediately
preceding Quarterly Dividend Period (the "Dividend Reset
Date"), and (ii) 4.85%.
(d) "Short Term Rate" shall mean a rate equal
to (i) 85% of the Commercial Paper Rate (as hereinafter
defined) if on the Dividend Reset Date either (x) the
rating for the Preferred Stock of the Corporation
published by Moody's Investors Service Inc. ("Moody's")
is "A2" or lower or the rating for the Preferred Stock of
the Corporation published by Standard & Poor's
Corporation ("S&P") is "A" or lower, or (y) the Preferred
Stock of the Corporation is not rated by both Moody's and
S&P, and (ii) 78% of the Commercial Paper Rate if the
rating for the Preferred Stock of the
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Corporation published by Moody's is "Aa2" or higher and the
rating for the Preferred Stock of the Corporation published by
S&P is "AA" or higher.
(e) "Commercial Paper Rate" shall mean, on any
Dividend Reset Date, a rate equal to the Money Market
Yield (calculated as described below) of the 90-day rate
for commercial paper, as made available and subsequently
published in H.15(519) under the heading "Commercial
Paper" for such date. In the event that such rate is not
made available by 3:00 P.M., New York City time, on such
Dividend Reset Date, then the Commercial Paper Rate shall
be the Money Market Yield of the 90-day rate on such
Dividend Reset Date for commercial paper as made
available and subsequently published in Composite Quota-
tions under the heading "Commercial Paper." If by 3:00
P.M., New York City time, on such Dividend Reset Date
such rate has not yet been made available in either
H.15(519) or Composite Quotations, the Commercial Paper
Rate for such Dividend Reset Date shall be the Money
Market Yield of the arithmetic mean of the offered rates
as of 11:00 A.M., New York City time, on such Dividend
Reset Date of three leading dealers of commercial paper
in the city of New York selected by the Corporation for
90-day commercial paper placed for an industrial issuer
whose senior unsecured bond rating is "AA" or the equiva-
lent from a nationally recognized securities rating
agency; provided, however, that if the dealers selected
as aforesaid are not quoting as mentioned in this
sentence, the Commercial Paper Rate with respect to such
Dividend Reset Date will be the Commercial Paper Rate in
effect on the immediately preceding Dividend Reset Date.
(f) "Money Market Yield" shall be a yield
(expressed as a percentage) calculated in accordance with
the following formula:
x
Money Market Yield = ----------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for the commercial
paper quoted on a bank discount basis and expressed as a
decimal; and "M" refers to the actual number of days in
the interest period for which interest is being calcu-
lated.
(g) "Business Day" means any day that is not a
Saturday, Sunday or a legal holiday in the State of New
York.
(h) Dividends payable on the Series Y
Preferred Stock for any Quarterly Dividend Period ending
prior to December 31, 1995 shall be computed on the basis
of one-fourth of the Applicable Rate. Dividends payable
on the Series Y Preferred Stock for any Quarterly
Dividend Period beginning on or after December 31, 1995
shall be computed on the basis of the actual number of
days elapsed in the period for which such dividends are
payable (whether a full or partial Quarterly Dividend
Period) and based upon a year of 360 days. If the
Corporation determines in good faith that for any reason
the Applicable Rate cannot be determined for any
Quarterly Dividend Period, then the
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<PAGE>
Applicable Rate in effect for the preceding Quarterly Dividend
Period shall be continued for such Quarterly Dividend Period.
3. Optional Redemption. (a) The
Corporation, at its sole option, out of funds legally
available therefor, may redeem shares of the Series Y
Preferred Stock, in whole or in part, on any Dividend
Payment Date on or after December 31, 1995, at a
redemption price of $100,000 per share, plus, in each
case, an amount equal to accrued and unpaid dividends
thereon to the date fixed for redemption (the "Redemption
Price").
(b) In the event that fewer than all the
outstanding shares of the Series Y Preferred Stock are to
be redeemed, the shares to be redeemed from each holder
of record shall be determined by lot or pro rata as may
be determined by the Board of Directors or by any other
method as may be determined by the Board of Directors in
its sole discretion to be equitable.
(c) In the event the Corporation shall redeem
shares of the Series Y Preferred Stock, written notice of
such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days prior to
the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the
same appears on the books of the Corporation. Each such
notice shall state: (i) the redemption date; (ii) the
number of shares of the Series Y Preferred Stock to be
redeemed and, in the case of a partial redemption
pursuant to Section 3(b) hereof, the identification (by
the number of the certificate or otherwise) of the shares
of Series Y Preferred Stock to be redeemed; (iii) the
Redemption Price; (iv) the place or places where
certificates for such shares are to be surrendered for
payment of the Redemption Price; and (v) that dividends
on the shares to be redeemed will cease to accrue on such
redemption date.
(d) If notice of redemption shall have been
duly given, and if, on or before the redemption date
specified therein, all funds necessary for such
redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the
pro rata benefit of the holders of the shares called for
redemption, so as to be and continue to be available
therefor, then, notwithstanding that any certificate for
shares so called for redemption shall not have been
surrendered for cancellation, all shares so called for
redemption shall no longer be deemed outstanding on and
after such redemption date, and all rights with respect
to such shares shall forthwith on such redemption date
cease and terminate, except only the right of the holders
thereof to receive the amount payable on redemption
thereof, without interest.
If such notice of redemption shall have been
duly given or if the Corporation shall have given to the
bank or trust company hereinafter referred to irrevocable
authorization promptly to give such notice, and if on or
before the redemption date specified therein the funds
necessary for such redemption shall have been deposited
by the Corporation with such bank or trust company in
trust for the pro rata benefit of the holders of the
shares called for redemption, then, notwithstanding that
any certificate for shares so called for redemption shall
not have been surrendered for cancellation, from and
after the time of such deposit, all shares so called for
redemption shall no longer be
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<PAGE>
deemed to be outstanding and all rights with respect to such
shares shall forthwith cease and terminate, except only the
right of the holders thereof to receive from such bank or
trust company at any time after the time of such deposit the
funds so deposited, without interest. The aforesaid bank or
trust company shall be a bank or trust company organized and
in good standing under the laws of the United States of
America or of the State of New York, doing business in the
Borough of Manhattan, The city of New York, having capital
surplus and undivided profits aggregating at least $50,000,000
according to its latest published statement of condition, and
shall be identified in the notice of redemption. Any interest
accrued on such funds shall be for the benefit of the
Corporation. Any funds so set aside or deposited, as the case
may be, and unclaimed at the end of one year from such
redemption date shall, to the extent permitted by law, be
released or repaid to the Corporation, after which repayment
the holders of the shares so called for redemption shall look
only to the Corporation for payment thereof.
(e) Notwithstanding the foregoing provisions
of this Section 3, unless the full cumulative dividends
on all outstanding shares of the Series Y Preferred Stock
shall have been paid or contemporaneously are declared
and paid for all past Quarterly Dividend Periods, no
shares of the Series Y Preferred Stock shall be redeemed
unless all outstanding shares of the Series Y Preferred
Stock are simultaneously redeemed, and neither the
Corporation nor a subsidiary of the Corporation shall
purchase or otherwise acquire for valuable consideration
any shares of the Series Y Preferred Stock, provided,
however, that the foregoing shall not prevent the
purchase or acquisition of shares of the Series Y
Preferred Stock pursuant to a purchase or exchange offer
made on the same terms to holders of all the outstanding
shares of the Series Y Preferred Stock and mailed to the
holders of record of all such outstanding shares at such
holders' addresses as the same appear on the books of the
Corporation and provided further that if some, but less
than all, of the shares of the Series Y Preferred Stock
are to be purchased or otherwise acquired pursuant to
such purchase or exchange offer and the number of shares
so tendered exceeds the number of shares so to be
purchased or otherwise acquired by the Corporation, the
shares of the Series Y Preferred Stock so tendered will
be purchased or otherwise acquired by the Corporation on
a pro rata basis according to the number of such shares
duly tendered by each holder so tendering shares of the
Series Y Preferred Stock for such purchase or exchange.
(f) If all the outstanding shares of the
Series Y Preferred Stock shall not have been redeemed on
or prior to March 30, 1999, each holder of the shares of
the Series Y Preferred Stock remaining outstanding shall
have the right to require that the Corporation
repurchase, on the Business Day next following such date
or on the Business Day next following each fifth
anniversary of such date thereafter (the "Repurchase
Date"), all but not less than all of such holder's then
outstanding shares at a purchase price (the "Purchase
Price") in cash equal to 100% of the aggregate
liquidation value of such shares, together with all
accrued and unpaid dividends on such shares to but not
including the Repurchase Date, in accordance with the
procedures set forth below.
(g) Not less than 30 or more than 60 days
prior to the Repurchase Date any holder who desires to
cause the Corporation to repurchase such holder's shares
of
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<PAGE>
Series Y Preferred Stock shall send by first-class mail,
postage prepaid, to the Corporation at its principal executive
offices, a notice stating (i) that such holder desires to
cause the Corporation to repurchase such holder's shares of
Series Y Preferred Stock, (ii) the number of shares to be
repurchased, and (iii) the Repurchase Date. Holders electing
to have shares of the Series Y Preferred Stock repurchased
will be required to surrender the certificate or certificates
representing such shares to the Corporation at least five
business days prior to the Repurchase Date, and on the
Repurchase Date the Corporation shall pay to such holder the
Purchase Price.
(h) Any shares of the Series Y Preferred Stock
that shall at any time have been redeemed or repurchased
shall, after such redemption or repurchase, have the
status of authorized but unissued shares of Preferred
Stock, without designation as to series until such shares
are once again designated as part of a particular series
by the Board of Directors.
4. Conversion or Exchange; Sinking Fund. The
holders of shares of the Series Y Preferred Stock shall
not have any rights herein to convert such shares into,
or exchange such shares for, shares of any other class or
classes or of any other series of any class or classes of
capital stock of the Corporation; nor shall the holders
of shares of the Series Y Preferred Stock be entitled to
the benefits of a sinking fund in respect of their shares
of the Series Y Preferred Stock.
5. Voting. (a) Except as otherwise provided
in this Section 5 or as otherwise required by law, the
Series Y Preferred Stock shall have no voting rights.
(b) If six quarterly dividends (whether or not
consecutive) payable on shares of Series Y Preferred
Stock are in arrears at the time of the record date to
determine stockholders for any annual meeting of
stockholders of the Corporation, the number of directors
of the Corporation shall be increased by two, and the
holders of shares of Series Y Preferred Stock (voting
separately as a class with the holders of shares of any
one or more other series of Preferred Stock upon which
like voting rights have been conferred and are
exercisable) shall be entitled at such annual meeting of
stockholders to elect two directors of the Corporation,
with the remaining directors of the Corporation to be
elected by the holders of shares of any other class or
classes or series of stock entitled to vote therefor. In
any such election, holders of shares of Series Y
Preferred Stock shall have one vote for each share held.
At all meetings of stockholders at which
holders of Preferred Stock shall be entitled to vote for
Directors as a single class, the holders of a majority of
the outstanding shares of all classes and series of
capital stock of the Corporation having the right to vote
as a single class shall be necessary to constitute a
quorum, whether present in person or by proxy, for the
election by such single class of its designated
Directors. In any election of Directors by stockholders
voting as a class, such Directors shall be elected by the
vote of at least a plurality of shares held by such
stockholders present or represented at the meeting. At
any such meeting, the election of Directors by
stockholders voting as a class shall be valid
notwithstanding that a quorum of other
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stockholders voting as one or more classes may not be present
or represented at such meeting.
(c) Any director who has been elected by the
holders of shares of Series Y Preferred Stock (voting
separately as a class with the holders of shares of any
one or more other series of Preferred Stock upon which
like voting rights have been conferred and are
exercisable) may be removed at any time, with or without
cause, only by the affirmative vote of the holders of the
shares at the time entitled to cast a majority of the
votes entitled to be cast for the election of any such
director at a special meeting of such holders called for
that purpose, and any vacancy thereby created may be
filled by the vote of such holders. If a vacancy occurs
among the Directors elected by such stockholders voting
as a class, other than by removal from office as set
forth in the preceding sentence, such vacancy may be
filled by the remaining Director so elected, or his or
her successor then in office, and the Director so elected
to fill such vacancy shall serve until the next meeting
of stockholders for the election of Directors.
(d) The voting rights of the holders of Series
Y Preferred Stock to elect Directors as set forth above
shall continue until all dividend arrearages on the
Series Y Preferred Stock have been paid or declared and
set apart for payment. Upon the termination of such
voting rights, the terms of office of all persons who may
have been elected pursuant to such voting rights shall
immediately terminate, and the number of directors of the
Corporation shall be decreased by two.
(e) Without the consent of the holders of
shares entitled to cast at least two-thirds of the votes
entitled to be cast by the holders of the total number of
shares of Preferred Stock then outstanding, voting
separately as a class without regard to series, with the
holders of shares of Series Y Preferred Stock being
entitled to cast one vote per share, the Corporation may
not:
(i) create any class of stock that shall
have preference as to dividends or distributions of
assets over the Series Y Preferred Stock; or
(ii) alter or change the provisions of the
Certificate of Incorporation (including any
Certificate of Amendment or Certificate of
Designation relating to the Series Y Preferred
Stock) so as to adversely affect the powers,
preferences or rights of the holders of shares of
Series Y Preferred Stock; provided, however, that if
such creation or such alteration or change would
adversely affect the powers, preferences or rights
of one or more, but not all, series of Preferred
Stock at the time outstanding, such alteration or
change shall require consent of the holders of
shares entitled to cast at least two-thirds of the
votes entitled to be cast by the holders of all of
the shares of all such series so affected, voting as
a class.
6. Liquidation Rights. (a) Upon the
dissolution, liquidation or winding up of the
Corporation, the holders of the shares of the Series Y
Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution
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to stockholders, before any payment or distribution shall be
made on the Common Stock or on any other class or series of
stock ranking junior to shares of the Series Y Preferred Stock
as to amounts distributable on dissolution, liquidation or
winding up, $100,000 per share, plus an amount equal to all
dividends (whether or not earned or declared) on such shares
accrued and unpaid thereon to the date of final distribution.
(b) Neither the merger or consolidation of the
Corporation into or with any other corporation nor the
merger or consolidation of any other corporation into or
with the Corporation, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or
involuntary, of the Corporation for the purpose of this
Section 6.
(c) After the payment to the holders of the
shares of the Series Y Preferred Stock of the full
preferential amounts provided for in this Section 6, the
holders of the Series Y Preferred Stock as such shall
have no right or claim to any of the remaining assets of
the Corporation.
(d) In the event the assets of the Corporation
available for distribution to the holders of shares of
the Series Y Preferred Stock upon any dissolution,
liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in
full all amounts to which such holders are entitled
pursuant to paragraph (a) of this Section 6, the holders
of shares of the Series Y Preferred Stock and of any
shares of Preferred Stock of any series or any other
stock of the Corporation ranking, as to the amounts
distributable upon dissolution, liquidation or winding
up, on a parity with the Series Y Preferred Stock, shall
share ratably in any distribution in proportion to the
full respective preferential amounts to which they are
entitled.
7. Ranking of Stock of the Corporation. In
respect of the Series Y Preferred Stock, any stock of any
class or classes of the Corporation shall be deemed to
rank:
(a) prior to the shares of Series Y Preferred
Stock, either as to dividends or upon liquidation, if the
holders of such stock shall be entitled to either the
receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, as the
case may be, in preference or priority to the holders of
shares of the Series Y Preferred Stock;
(b) on a parity with shares of the Series Y
Preferred Stock, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend
payment dates, redemption amounts per share or
liquidation values per share or sinking fund provisions,
if any, are different from those of the Series Y
Preferred Stock, if the holders of such stock shall be
entitled to either the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, as
the case may be, in proportion to their respective
dividend rates or liquidation values, without preference
or priority, one over the other, as between the holders
of such stock and the holders of shares of the Series Y
Preferred Stock, provided in any such case such stock
does not rank prior to the Series Y Preferred Stock; and
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<PAGE>
(c) junior to shares of the Series Y Preferred
Stock, as to dividends and upon liquidation, if such
stock shall be Common Stock or if the holders of shares
of the Series Y Preferred Stock shall be entitled to
receipt of dividends and of amounts distributable upon
dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, as the
case may be, in preference or priority to the holders of
such stock.
The Series Y Preferred Stock is on a parity
with the 8.125% Cumulative Preferred Stock, Series A; the
5.50% Convertible Preferred Stock, Series B; the $4.53
ESOP Convertible Preferred Stock, Series C; the 9.25%
Preferred Stock, Series D; and the $45,000 Cumulative
Redeemable Preferred Stock, Series Z, of the Corporation
heretofore authorized for issuance by the Corporation.
8. Definition. When used herein, the term
"subsidiary" shall mean any corporation a majority of
whose voting stock ordinarily entitled to elect directors
is owned, directly or indirectly, by the Corporation.
9. Limitation on Dividends on Junior Stock.
So long as any shares of Series Y Preferred Stock shall
be outstanding, without the consent of the holders of
two-thirds of the shares of the Series Y Preferred Stock
then outstanding the Corporation shall not declare any
dividends on the Common Stock or any other stock of the
Corporation ranking as to dividends or distributions of
assets junior to the Series Y Preferred Stock (the Common
Stock and any such other stock being herein referred to
as "Junior Stock"), or make any payment on account of, or
set apart money for, a sinking fund or other similar fund
or agreement for the purchase, redemption or other
retirement of any shares of Junior Stock, or make any
distribution in respect thereof, whether in cash or
property or in obligations or stock of the Corporation,
other than a distribution of Junior Stock (such
dividends, payments, setting apart and distributions
being herein called "Junior Stock Payments"), unless the
following conditions shall be satisfied at the date of
such declaration in the case of any such dividend, or the
date of such setting apart in the case of any such fund,
or the date of such payment or distribution in the case
of any other Junior Stock Payment:
(a) full cumulative dividends shall have been
paid or declared and set apart for payment on all
outstanding shares of Preferred Stock other than Junior
Stock; and
(b) the Corporation shall not be in default or
in arrears with respect to any sinking fund or other
similar fund or agreement for the purchase, redemption or
other retirement of any shares of Preferred Stock other
than Junior Stock;
provided, however, that any funds theretofore deposited
in any sinking fund or other similar fund with respect to
any Preferred Stock in compliance with the provisions of
such sinking fund or other similar fund may thereafter be
applied to the purchase or redemption of such Preferred
Stock in accordance with the terms of such sinking fund
or other similar fund regardless of whether at the time
of such application full cumulative dividends upon
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<PAGE>
shares of Series Y Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set
apart for payment by the Corporation.
10. Waiver, Modification and Amendment.
notwithstanding any other provisions relating to the
Series Y Preferred Stock, any of the rights or benefits
of the holders of the Series Y Preferred Stock may be
waived, modified or amended with the consent of the
holders of all of the then outstanding shares of Series Y
Preferred Stock. Any such waiver, modification or
amendment shall be deemed to have the same effect as
satisfaction in full of any such right or benefit as
though actually received by such holders.
The Travelers Inc. has caused this Certificate
to be duly executed by its Senior Vice President, and attested
by its Assistant Secretary this 30th day of March, 1994.
THE TRAVELERS INC.
/s/ Charles O. Prince, III
By ______________________________
Charles O. Prince, III
Senior Vice President
Attest:
/s/ Mark J. Amrhein
______________________________
Mark J. Amrhein
Assistant Secretary
10
EXHIBIT 3.02
BY-LAWS
OF
THE TRAVELERS INC.
ARTICLE I
LOCATION
SECTION 1. The location of the registered office of
the Company in Delaware shall be in the City of Wilmington,
County of New Castle, State of Delaware.
SECTION 2. The Company shall, in addition to the
registered office in the State of Delaware, establish and
maintain an office within or without the State of Delaware or
offices in such other places as the Board of Directors may from
time to time find necessary or desirable.
ARTICLE II
CORPORATE SEAL
SECTION 1. The corporate seal of the Company shall
have inscribed thereon the name of the Company and the year of
its creation (1988) and the words "Incorporated Delaware."
ARTICLE III
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders, or
any special meeting thereof, shall be held either in the City of
Baltimore, State of Maryland, or at such other place as may be
designated by the Board of Directors or by the Executive
Committee, or by the officer or group of Directors calling any
special meeting.
SECTION 2. Stockholders entitled to vote may vote at
all meetings either in person or by proxy in writing. All
proxies shall be filed with the Secretary of the meeting before
being voted upon.
<PAGE>
SECTION 3. A majority in amount of the stock issued,
outstanding and entitled to vote represented by the holders in
person or by proxy shall be requisite at all meetings to
constitute a quorum for the election of Directors or for the
transaction of other business except as otherwise provided by
law, by the Certificate of Incorporation or by these By-laws. If
at any annual or special meeting of the stockholders, a quorum
shall fail to attend, a majority in interest attending in person
or by proxy may adjourn the meeting from time to time, not
exceeding sixty days in all, without notice other than by
announcement at the meeting (except as otherwise provided herein)
until a quorum shall attend and thereupon any business may be
transacted which might have been transacted at the meeting
originally called had the same been held at the time so called.
If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 4. The annual meeting of the stockholders
shall be held on such date and at such time as the Board of
Directors or the Executive Committee may determine by resolution.
Except as otherwise set forth in the Certificate of Incorporation
of the Company, each holder of voting stock shall be entitled to
one vote for each share of such stock standing registered in his
or her name. All annual meetings shall be general meetings.
SECTION 5. The business to be transacted at the annual
meeting shall include the election of Directors, consideration
and action upon the reports of officers and Directors, the acts,
contracts, transactions and proceedings of the officers,
Directors, Executive Committee, and all other Committees of the
Board and any other matters within the power of the Company which
may be brought before the meeting.
SECTION 6. Notice of the annual meeting shall be
mailed by the Secretary to each stockholder entitled to vote, at
his or her last known post office address, at least ten days but
not more than sixty days prior to the meeting.
SECTION 7. Special meetings of the stockholders may be
called by the Chairman of the Board. A special meeting shall be
called at the request, in writing, of a majority of the Board of
Directors or of the Executive Committee, or by the vote of the
Board of Directors or of the Executive Committee, or at the
request, in writing, of the holders of Twenty Percent (20%) of
the stock of the Company issued, outstanding and entitled to
vote.
SECTION 8. Notice of each special meeting, indicating
briefly the object or objects thereof, shall be mailed by the
Secretary to each stockholder entitled to vote at his or her last
known post office address, at least ten days but not more than
sixty days prior to the meeting.
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SECTION 9. If the entire Board of Directors becomes
vacant, any stockholder may call a special meeting in the same
manner that the Chairman of the Board may call such meeting, and
Directors for the unexpired term may be elected at said special
meeting in the manner provided for their election at annual
meetings.
ARTICLE IV
DIRECTORS
SECTION 1. The affairs, property and business of the
Company shall be managed and controlled by a Board of Directors,
with the exact number of directors to be determined from time to
time by resolution adopted by affirmative vote of a majority of
the entire Board of Directors. The directors shall be divided
into three classes, designated Class I, Class II and Class III,
as provided in the Certificate of Incorporation of the Company.
The election and term of directors shall be as provided in the
Certificate of Incorporation, as amended, from time to time.
SECTION 2. Vacancies in the Board of Directors shall
be filled as provided in the Certificate of Incorporation of the
Company, as amended from time to time.
ARTICLE V
POWERS OF THE DIRECTORS
SECTION 1. The Board of Directors shall have the
management of the business of the Company, and, in addition to
the powers and authorities by these By-laws expressly conferred
upon them, may exercise all such powers and do all such acts and
things, as may be exercised or done by the Company, but subject,
nevertheless, to the provisions of the laws of the State of
Delaware, of the Certificate of Incorporation and of these By-
laws.
SECTION 2. The Directors and members of the Executive
Committee and other committees appointed by the Board of
Directors or by the Executive Committee as such shall not receive
any stated salary for their services except where authorized by
the Board of Directors, but, by resolution of the Board, a fixed
sum and reasonable expenses may be allowed for attendance at each
regular or special meeting, provided nothing herein contained
shall be construed to preclude a Director or member of a
committee from serving in any other capacity and receiving
compensation therefor, but if he shall serve as an officer or
employee of the Company or of any subsidiary company, receiving a
salary, he shall be paid the actual expenses for attending
meetings, but no other sums, except by the express order of the
Board of Directors.
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<PAGE>
SECTION 3. The Company shall indemnify, to the fullest
extent permissible under the General Corporation Law of the State
of Delaware, or the indemnification provisions of any successor
statute, any person, and the heirs and personal representatives
of such person, against any and all judgments, fines, amounts
paid in settlement and costs and expenses, including attorneys'
fees, actually and reasonably incurred by or imposed upon such
person in connection with, or resulting from any claim, action,
suit or proceeding (civil, criminal, administrative or
investigative) in which such person is a party or is threatened
to be made a party by reason of such person being or having been
a director, officer or employee of the Company, or of another
corporation, joint venture, trust or other organization in which
such person serves as a director, officer, employee or agent at
the request of the Company, or by reason of such person being or
having been an administrator or a member of any board or
committee of this Company or of any such other organization,
including, but not limited to, any administrator, board or
committee related to any employee benefit plan.
The Company may advance expenses incurred in defending
a civil or criminal action, suit or proceeding to any such
director, officer, employee or agent upon receipt of an
undertaking by or on behalf of the director, officer, employee or
agent to repay such amount, if it shall ultimately be determined
that such person is not entitled to indemnification by the
Company.
The foregoing right of indemnification and advancement
of expenses shall in no way be exclusive of any other rights of
indemnification to which any such person may be entitled, under
any by-law, agreement, vote of shareholders or disinterested
directors or otherwise, and shall inure to the benefit of the
heirs and personal representatives of such person.
SECTION 4. Each Director and officer and each member
of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in
good faith upon the books of account or other records of the
Company or of any of its subsidiaries, or upon reports made to
the Company or any of its subsidiaries by any officer of the
Company or of a subsidiary or by an independent certified public
accountant or by an appraiser selected with reasonable care by
the Board of Directors or by any such committee.
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<PAGE>
ARTICLE VI
MEETINGS OF THE DIRECTORS
SECTION 1. The Board of Directors shall meet as soon
as convenient after the annual meeting of stockholders in the
City of Baltimore, State of Maryland, or at such other place as
may be designated by the Board of Directors or the Executive
Committee, for the purpose of organization and the transaction of
any other business which may properly come before the meeting.
SECTION 2. Regular meetings of the Directors may be
held without notice at such time and place as may be determined
from time to time by resolution of the Board.
SECTION 3. One-third of the total number of Directors
shall constitute a quorum except when the Board of Directors
consists of one Director, then one Director shall constitute a
quorum for the transaction of business, but the Directors
present, though fewer than a quorum, may adjourn the meeting to
another day. The vote of the majority of the Directors present
at a meeting at which a quorum is present shall be the act of the
Board of Directors.
SECTION 4. Special meetings of the Board may be called
by the Board, the Executive Committee or the Chairman of the
Board , on one day's notice, or other reasonable notice, to each
Director, either personally, by mail or by wire, and may be held
at such time as the Board of Directors, the Executive Committee
or the officer calling said meeting may determine. Special
meetings may be called in like manner on the request in writing
of three Directors. If the Board of Directors or the Executive
Committee so determine, such special meetings may be held at some
place other than at the office of the Company in the City of
Baltimore.
SECTION 5. In the absence of both the Secretary and an
Assistant Secretary, the Board of Directors shall appoint a
secretary to record all votes and the minutes of its proceedings.
SECTION 6. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if a written
consent to such action be signed by all of the members of the
Board of Directors or committee as the case may be, and such
written consent be filed with the minutes of the proceedings of
the Board of Directors or such committee.
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ARTICLE VII
STANDING COMMITTEES
SECTION 1. The Board of Directors may designate from
their number standing committees and may invest them with all
their own powers, except as otherwise provided in the General
Corporation Law of the State of Delaware, subject to such
conditions as they may prescribe, and all committees so appointed
shall keep regular minutes of their transactions and shall cause
them to be recorded in books kept for that purpose in the office
of the Company, and shall report the same to the Board of
Directors at their regular meeting.
ARTICLE VIII
EXECUTIVE COMMITTEE
SECTION 1. The Board of Directors may designate an
Executive Committee of not more than ten nor fewer than two
persons from among their own number. One-third of the members of
the Executive Committee shall constitute a quorum except when the
Executive Committee consists of two, then one member shall
constitute a quorum. Any vacancy on the Executive Committee
shall be filled by the Board of Directors.
SECTION 2. The Executive Committee shall exercise all
powers of the Board of Directors between the meetings of said
Board except as otherwise provided in the General Corporation Law
of the State of Delaware. No action of the Executive Committee
shall become operative unless it has the affirmative vote of at
least a majority of the members of the Executive Committee
present and voting.
SECTION 3. Regular meetings of the Executive Committee
shall be held without notice at such time and place as may be
determined from time to time by resolution of the Executive
Committee. Special meetings of the Executive Committee may be
called at any time upon one day's notice, or other reasonable
notice, either personally, by mail or by wire, by the Chairman of
the Board, the Chairman of the Executive Committee, or by any two
members of the Executive Committee.
SECTION 4. In the absence of both the Secretary and an
Assistant Secretary, the Executive Committee shall appoint a
secretary who shall keep regular minutes of the actions of the
said Committee and report the same to the Board of Directors,
which thereupon shall take action thereon.
SECTION 5. The Board of Directors may designate from
the members of the Executive Committee a Chairman of the
Executive Committee. If the Board of Directors should not make
such designation, the Executive Committee may designate a
Chairman of the Executive Committee.
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ARTICLE IX
OFFICERS OF THE COMPANY
SECTION 1. The officers of the Company shall consist
of a Chairman of the Board of Directors, a President, one or more
Vice Presidents, a Controller, a Secretary and a Treasurer.
There also may be such other officers and assistant officers as,
from time to time, may be elected or appointed by the Board of
Directors or by the Executive Committee.
ARTICLE X
OFFICERS - HOW CHOSEN
SECTION 1. At the first meeting after the annual
meeting of stockholders, the Directors shall elect annually from
among their own number a Chairman of the Board and a President.
They shall also elect the several Vice Presidents, a Controller,
a Secretary and a Treasurer, to hold office for one year or until
others are elected and qualify in their stead or until their
earlier resignation or removal.
SECTION 2. The Directors or the Executive Committee
shall also elect or appoint such other officers and assistant
officers as from time to time they may determine, and who shall
hold office during the pleasure of the Board or of the Executive
Committee.
ARTICLE XI
CHAIRMAN OF THE BOARD
SECTION 1. The Chairman of the Board shall be the
Chief Executive Officer of the Company, and shall have general
supervision and direction over the business and policies of the
Company, and over all the other officers of the Company and shall
see that their duties are properly performed. He shall have all
the powers conferred upon the President by these By-laws, except
such as by the laws of the State of Delaware can be exercised
only by the President or a Vice President.
SECTION 2. He shall be ex-officio a member of all
standing committees, shall have the general powers and duties of
the direction, supervision and management usually vested in the
Chief Executive Officer of a corporation, and shall preside at
all meetings of the Board of Directors. He shall see that all
orders and resolutions of the Board of Directors and Executive
Committee are carried into effect.
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SECTION 3. He shall submit reports of the current
operations of the Company to the Board of Directors and Executive
Committee at their regular meetings, and annual reports to the
stockholders.
ARTICLE XII
PRESIDENT
SECTION 1. The President shall be the Chief Operating
Officer of the Company, and, if the President shall not also be
the Chairman of the Board, shall be subordinate to the Chairman
of the Board, shall have general supervision and direction over
the business and policies of the Company, and over all the other
officers of the Company, and shall see that their duties are
properly performed.
SECTION 2. The President shall preside at all meetings
of the Board of Directors in the absence of the Chairman of the
Board.
SECTION 3. The President shall be ex-officio a member
of all standing committees, and, in the absence of the Chairman
of the Board, shall have the general powers and duties of the
Chairman of the Board and of the supervision, direction and
management usually vested in the office of a president or chief
executive officer of a corporation.
ARTICLE XIII
VICE PRESIDENTS
SECTION 1. Each Vice President shall have such powers
and perform such duties as may be assigned to him by the Board of
Directors or Executive Committee, or, subject to Section 2 of
Article XVII, by the Chairman of the Board or the President. The
Board of Directors may add to the title of any Vice President
such distinguishing designation as may be deemed desirable, which
designation may reflect seniority, duties, or responsibilities of
such Vice President. In the absence of the President, any Vice
President designated by the Chairman of the Board may perform the
duties and exercise the powers of the President.
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ARTICLE XIV
CONTROLLER
SECTION 1. The Controller shall have charge of and
supervise all accounting matters, the preparation of all
accounting reports and statistics of the Company and its
subsidiaries, and shall perform the duties usually incident to
the office of the Controller. He shall submit such reports and
records to the Board of Directors or the Executive Committee as
may be requested by them, or by the Chairman of the Board or by
the President.
ARTICLE XV
SECRETARY
SECTION 1. The Secretary shall attend all sessions of
the Board of Directors and of the Executive Committee, and act as
clerk thereof and record all votes and the minutes of all
proceedings in a book to be kept for that purpose, and shall
perform like duties for the Standing Committees when required.
SECTION 2. He shall see that proper notice is given of
all meetings of the stockholders of the Company, of the Board of
Directors and of the Executive Committee. In his absence, or in
case of his failure or inability to act, an Assistant Secretary
or a secretary pro-tempore shall perform his duties and such
other duties as may be prescribed by the Board of Directors.
SECTION 3. He shall keep account of certificates of
stock or other receipts and securities representing an interest
in or to the capital of the Company, transferred and registered
in such form and manner and under such regulations as the Board
of Directors may prescribe.
SECTION 4. He shall keep in safe custody the
contracts, books and such corporate records as are not otherwise
provided for, and the seal of the Company. He shall affix the
seal to any instrument requiring the same and the seal, when so
affixed, shall be attested by the signature of the Secretary, an
Assistant Secretary, Treasurer or an Assistant Treasurer.
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<PAGE>
ARTICLE XVI
TREASURER
SECTION 1. The Treasurer shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Company and shall deposit all money in the name of, for the
account of or to the credit of the Company in such depositories
as may be designated by the Board of Directors or by the
Executive Committee, and shall keep all securities and other
valuable effects in a safe place designated by the Board of
Directors or the Executive Committee.
SECTION 2. He shall perform such other duties as the
Board of Directors or the Executive Committee may from time to
time prescribe or require.
ARTICLE XVII
DUTIES OF OFFICERS
SECTION 1. In addition to the duties specifically
enumerated in the By-laws, all officers and assistant officers of
the Company shall perform such other duties as may be assigned to
them from time to time by the Board of Directors, the Executive
Committee, or by their superior officers.
SECTION 2. The Board of Directors or Executive
Committee may change the powers or duties of any officer or
assistant officer, or delegate the same to any other officer,
assistant officer or person.
SECTION 3. Every officer and assistant officer of the
Company shall from time to time report to the Board of Directors,
the Executive Committee or to his superior officers all matters
within his knowledge which the interests of the Company may
require to be brought to their notice.
ARTICLE XVIII
CERTIFICATES OF STOCK, SECURITIES, NOTES, ETC.
SECTION 1. Certificates of stock, or other receipts
and securities representing an interest in or to the capital of
the Company, shall bear the signature of the Chairman of the
Board, the President or any Vice President and bear the
countersignature of the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer.
- 10 -
<PAGE>
SECTION 2. Nothing in this Article XVIII shall be
construed to limit the right of the Company, by resolution of its
Board of Directors or Executive Committee, to authorize, under
such conditions as such Board or Committee may determine, the
facsimile signature by any properly authorized officer of any
instrument or document that said Board of Directors or Executive
Committee may determine.
SECTION 3. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature
shall have been used on any certificates of stock, notes or
securities shall cease to be such officer, transfer agent or
registrar of this Company, whether because of death, resignation
or otherwise, before the same shall have been issued by this
Company, such certificates of stock, notes and securities may
nevertheless be adopted by this Company and be issued and
delivered as though the person or persons who signed the same or
whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer, transfer agent or
registrar of this Company, and such adoption of said certificates
of stock, notes and securities shall be evidenced by a resolution
of the Board of Directors or Executive Committee to that effect.
SECTION 4. All transfers of the stock of the Company
shall be made upon the books of the Company by the owners of the
shares in person or by their legal representatives.
SECTION 5. Certificates of stock shall be surrendered
and canceled at the time of transfer.
SECTION 6. The Company shall be entitled to treat the
holder of record of any share or shares of stock as the holder in
fact thereof, and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided by
the laws of the State of Delaware.
SECTION 7. In the case of a loss or the destruction of
a certificate of stock, another may be issued in its place upon
satisfactory proof of such loss or destruction and the giving of
a bond of indemnity, unless waived, approved by the Board of
Directors or by the Executive Committee.
- 11 -
<PAGE>
ARTICLE XIX
CHECKS, LOANS, COMMERCIAL PAPER, CONTRACTS, ETC.
SECTION 1. Any two of the following officers who are
authorized by the Board of Directors or Executive Committee, to
wit, the Chairman of the Board, the President, the Vice
Presidents, the Secretary or the Treasurer, not being the same
person, or any of them together with an Assistant Vice President,
an Assistant Secretary or an Assistant Treasurer, shall have the
authority to sign and execute on behalf of the Company as maker,
drawer, acceptor, guarantor, endorser, assignor or otherwise, all
notes, collateral trust notes, debentures, drafts, bills of
exchange, acceptances, securities and commercial paper of all
kinds.
SECTION 2. The Chairman of the Board, the President,
any Vice President, the Secretary, the Treasurer or any other
person, when such officer or other person is authorized by the
Board of Directors or Executive Committee, shall have authority,
on behalf of and for the account of the Company, (a) to borrow
money against duly executed obligations of the Company; (b) to
sell, discount or otherwise dispose of notes, collateral trust
notes, debentures, drafts, bills of exchange, acceptances,
securities, obligations of the Company and commercial paper of
all kinds; (c) to sign orders for the transfer of money to
affiliated or subsidiary companies, and (d) to execute contracts.
SECTION 3. The Board of Directors or the Executive
Committee may either in the absence of any of said officers or
persons, or for any other reason, appoint some other officer or
some other person to exercise the powers and discharge the duties
of such officer or person under this Article, and the officer or
person so appointed shall have all the power and authority hereby
conferred upon the officer for whom he may be appointed so to
act.
SECTION 4. Commercial paper, in the form of short term
promissory notes, of the Company issued by arrangement with a
bank duly authorized by the Board of Directors or Executive
Committee of this Company shall be issued under the manual
signature of one of the officers of the Company and manually co-
signed on behalf of the Company by an employee of the bank
approved by the Company; provided however, that the Board of
Directors or Executive Committee may, by resolution, provide,
with such protective measures as they may prescribe, that, in
lieu of the manual signature of an officer of this Company on any
such commercial paper of the Company issued by an authorized bank
as aforesaid, the facsimile signature of an officer of this
Company may be used thereon, and said facsimile signature, when
placed thereon, shall have the same effect as though said
commercial paper had been manually signed by an officer of this
Company.
- 12 -
<PAGE>
ARTICLE XX
FISCAL YEAR
SECTION 1. The fiscal year of the Company shall begin
the first day of January and terminate on the thirty-first day of
December in each year.
ARTICLE XXI
NOTICE
SECTION 1. Whenever under the provisions of the laws
of the State of Delaware or these By-laws notice is required to
be given to any Director, member of the Executive Committee,
officer or stockholder, it shall not be construed to mean
personal notice, but such notice may be given by wire or in
writing by depositing the same in the post office or letter box
in a post paid, sealed wrapper, addressed to such Director,
member of the Executive Committee, officer or stockholder at his
or her address as the same appears in the books of the Company;
and the time when the same shall be mailed shall be deemed to be
the time of the giving of such notice.
ARTICLE XXII
WAIVER OF NOTICE
SECTION 1. Any stockholder, Director or member of the
Executive Committee may waive in writing any notice required to
be given under these By-laws.
ARTICLE XXIII
AMENDMENT OF BY-LAWS
SECTION 1. The Board of Directors, at any meeting, may
alter or amend these By-laws, and any alteration or amendments so
made may be repealed by the Board of Directors or by the
stockholders at any meeting duly called.
- 13 -
Exhibit 10.17.2
AMENDMENT TO EMPLOYMENT AGREEMENT
Amendment dated as of March 29, 1994 (the "Amendment")
to the Employment Agreement dated June 23, 1993 (the "Employment
Agreement") by and among Smith Barney Shearson Inc., a Delaware
corporation, formerly known as Smith Barney, Harris Upham & Co.
Incorporated (the "Company"), The Travelers Inc., a Delaware
corporation formerly known as Primerica Corporation and the sole
common stockholder of the Company ("The Travelers"), and Robert
F. Greenhill (the "Executive").
WHEREAS, the parties hereto have previously entered
into the Employment Agreement; and
WHEREAS, the parties hereto desire to amend such
Employment Agreement in light of recent changes to the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, the parties hereto, each intending to
be legally bound, do hereby agree as follows:
1. Effective upon the mailing of the definitive proxy
statement (the "Proxy Statement") for the 1994 Annual Meeting of
Stockholders (the "Annual Meeting") of The Travelers (which
mailing is expected to occur on or about March 29, 1994),
Paragraphs 5(a) and 5(b) of the Employment Agreement are deleted.
2. Immediately upon approval by the stockholders at
the Annual Meeting of The Travelers Inc. Executive Performance
Compensation Plan, such Paragraphs 5(a) and 5(b) shall be
replaced with new Paragraphs 5(a) and 5(b), as described in
Article V of Annex B to the Proxy Statement and as set forth in
Attachment A hereto, with an effective date of January 1, 1994.
3. In the event that such stockholder approval is not
obtained, the Company and Executive shall enter into good faith
negotiations to enter into a mutually satisfactory replacement
for such Paragraphs 5(a) and 5(b).
4. Except as expressly modified by this Amendment, all
terms of the Employment Agreement in effect on the date hereof
shall remain in full force and effect.
5. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Amendment as of the date first above written.
SMITH BARNEY SHEARSON INC.
By: /s/ Barry L. Mannes
------------------------------
Name: Barry L. Mannes
Title: Executive Vice President
THE TRAVELERS INC.
By: /s/ James Dimon
------------------------------
Name: James Dimon
Title: President, Chief Financial
Officer and Chief
Operating Officer
/s/ Robert F. Greenhill
---------------------------------
Robert F. Greenhill
- 2 -
<PAGE>
ATTACHMENT A
to Amendment to
Employment Agreement
dated as of March 29, 1994
(a) Compensation. During the Term, the Company
------------
shall pay or cause to be paid to the Executive (x) an
annual base salary of $995,000 plus (y) a bonus
(together, the "Compensation") for each fiscal year of
the Company equal to the sum of (i) 2% of the After-Tax
Earnings (as hereinafter defined) for such fiscal year
from $49,750,000 up to and including $750,000,000 of
such After-Tax Earnings, (ii) 1.5% of the After-Tax
Earnings in excess of $750,000,000 up to but not
exceeding $1 billion and (iii) 1% of the After-Tax
Earnings in excess of $1 billion provided that if the
--------
After-Tax Earnings for such fiscal year does not exceed
$100 million, then Executive shall not be entitled to a
bonus. The Compensation shall be subject to increases
from time to time at the sole discretion of the Board
of Directors of the Company. For purposes of this
Agreement, "After-Tax Earnings" for any fiscal year
shall mean the aggregate of (i) the consolidated after-
tax net income of Smith Barney Shearson Holdings Inc.
("SBSH") and its subsidiaries, (ii) for so long as
Greenwich Street Capital Partners Inc. ("GSCP") shall
be a subsidiary of The Travelers and the Executive is
employed by the Company, the after-tax net income of
GSCP, and (iii) the after-tax net income of any other
affiliate of The Travelers with which the Executive has
a relationship similar to that with GSCP with respect
to corporate organization, hiring of employees, setting
of policies or operating guidelines (GSCP and such
other entities referred to collectively as "The
Travelers Entities"), after deduction of the base
salary but prior to deducting the portion of
Compensation in excess of base salary and (except as
otherwise provided in the next sentence with respect to
the years 1993 and 2000) in each case as reflected on
its audited financial statements for such fiscal year
prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied
and certified by independent public accountants
(provided that, if any of The Travelers Entities shall
--------
not otherwise cause to be prepared audited financial
statements, the financial statements of any such Entity
included in the financial statements of The Travelers
filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), shall be used for these
purposes. The Company shall pay or cause to be paid
to the Executive the base salary and that portion of
Compensation based upon the After-Tax Earnings of SBSH
and its subsidiaries, and
A-1
<PAGE>
The Travelers shall pay or cause to be paid to the
Executive that portion of Compensation based upon the
After-Tax Earnings of The Travelers Entities. With
respect to the period from the Commencement Date to
December 31, 1993 (the "1993 Stub Period") and the
period from January 1, 2000 to the last day of the Term
(the "2000 Stub Period"), the Compensation payable to
the Executive for such periods shall be equal to one-
half of the Compensation determined in accordance with
the formula set forth in the first sentence of this
Paragraph 5(a). For this purpose, After-Tax Earnings
in such formula shall be deemed to be equal to the
product of two (2) multiplied by the After-Tax Earnings
for the fiscal quarters ended September 30, 1993 and
December 31, 1993 (in the case of the 1993 Stub Period)
and the After-Tax Earnings for the fiscal quarters
ended March 31, 2000 and June 30, 2000 (in the case of
the 2000 Stub Period), in each case as reflected in the
interim financial statements of the relevant entities
for such fiscal quarters prepared in accordance with
GAAP consistently applied. For any partial fiscal year
(whether preceding or following the Date of Termination
(as defined in Paragraph 9(f)), the Compensation for
such partial fiscal year shall be calculated by
multiplying the Compensation otherwise calculated for
the full fiscal year by a fraction, the numerator of
which is the number of calendar months in such partial
fiscal year (including, in the case of the partial
fiscal year preceding the Date of Termination, the
month in which the Date of Termination occurs) and the
denominator of which is 12.
(b) Time of Payment. The Compensation shall be paid
----------------
to the Executive as follows:
(i) The Company shall pay to the Executive the
base salary in monthly or more frequent installments in
accordance with the payroll practices for senior
executives of the Company in effect at the time of
payment; and
(ii) Promptly after the relevant audited
financial statements are completed (but in no event
later than the 90th day following the end of each year
or in the case of the 1993 Stub Period and the 2000
Stub Period the applicable Stub Period, as the case may
be) and following the certification by the Nominations
and Compensation Committee of The Travelers Board of
Directors that the applicable performance goals have
been met as required by Section 162(m) of the Internal
Revenue Code of 1986, as amended, the Company shall pay
or cause to be paid to the Executive an amount equal to
A-2
<PAGE>
the bonus for such year calculated pursuant to
Paragraph 5(a).
The parties agree that, with regard to the portion of
the Compensation based upon the earnings of SBSH and its
subsidiaries, the financial statements included in SBSH's
periodic filings under the Exchange Act shall be used for
determining the Compensation under this Agreement. With
regard to the portion of the Compensation based upon the
After-Tax Earnings of The Travelers Entities, and in the
event that SBSH ceases to be a reporting company during the
Term, the financial statements of The Travelers Entities and
SBSH and its subsidiaries included in The Travelers'
financial statements filed under the Exchange Act shall be
used for determining the respective portion or portions
of such Compensation unless the parties agree on an
alternate arrangement for providing periodic financial
statements for purposes of this Paragraph.
A-3
<TABLE> <CAPTION>
Exhibit 11.01
The Travelers Inc. and Subsidiaries
Computation of Earnings Per Share
(In millions, except for per share amounts)
Three Months Ended March 31
---------------------------
1994 1993
---- ----
<S> <C> <C>
Earnings:
Net Income $340 $172
Preferred dividends:
8.125% Cumulative Preferred Stock - Series A (6) (6)
5.5% Convertible Preferred Stock - Series B (2) -
$4.53 Convertible Preferred Stock - Series C (4) -
9 1/4% Preferred Stock - Series D (9) -
---- ----
Income applicable to common stock $319 $166
==== ===
Average shares:
Common 320 218
Common stock warrants - -
Assumed exercise of dilutive stock options 4 4
Incremental shares - Capital Accumulation Plan 3 3
--- ---
327 225
=== ===
Earnings Per Share $0.98 $0.74
==== ====
Earnings per common share is based on the weighted average number of common shares outstanding during the period
after consideration of the dilutive effect of common stock warrants and stock options and the incremental shares
assumed issued under the Capital Accumulation Plan. Fully diluted earnings per common share, assuming conversion
of all outstanding convertible preferred stock (in 1994 only), the maximum dilutive effect of common stock
equivalents and the assumed conversion of convertible debentures (in 1993 only) have not been presented because
the effects are not material. The fully diluted earnings per common share computation for the three months ended
March 31, 1994 and 1993, would entail adding the number of shares issuable on conversion of preferred stock and
other debentures (7 and 4 million shares, respectively) and the additional common stock equivalents (1 million
shares in 1993 only) to the number of shares included in the earnings per common share calculation (resulting in
a total of 334 and 230 million shares, respectively) and eliminating the preferred stock dividend requirement in
1994 and the after-tax interest expense related to the conversion of other debentures in 1993 ($6 and $2 million,
respectively).
</TABLE>
<TABLE> <CAPTION>
EXHIBIT 12.01
The Travelers Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(In million of dollars, except for ratio)
Three months ended March 31,
-------------------------------
1994 1993
---- ----
<S> <C> <C>
Income before income taxes, minority interest and cumulative
effect of changes in accounting principle $538 $334
Elimination of undistributed equity earnings - (28)
Pre-tax minority interest - (12)
Interest expense 223 158
Portion of rentals deemed to be interest 33 10
--- ---
Earnings available for fixed charges $794 $462
=== ===
Fixed charges
-------------
Interest incurred $223 $158
Portion of rentals deemed to be interest 33 10
--- ---
Fixed charges $256 $168
=== ===
Ratio of earnings to fixed charges 3.10x 2.75x
==== =====
</TABLE>
EXHIBIT NO. 99.01
COMPANY'S FORM 10-K
December 31, 1989
Page 31
Item 3. LEGAL PROCEEDINGS
Other Litigation
On or about January 9, 1989, Primerica Holdings, Inc., as
successor in interest to old Primerica, notified the salaried
retirees of old Primerica of certain changes in their
retirement benefits. On December 19, 1989, a purported class
action was filed by two salaried retirees in United States
District Court, District of New Jersey, under the caption
Alexander, et al, v. Primerica Holdings, Inc., et al.
--------------------------------------------------------------
Plaintiffs allege that their retirement benefits are not
subject to material alteration, and that the 1989 revisions
are improper. The complaint alleges causes of action against
Primerica Holdings and its directors on various theories
including promissory estoppel, breach of contract, breach of
fiduciary duties, fraud, and federal ERISA violations.
Plaintiffs seek permanent injunctive relief prohibiting
changes in their benefits, as well as compensatory and
punitive damages.
<PAGE>
COMPANY'S FORM 10-K
December 31, 1991
Page 26
Item 3. LEGAL PROCEEDINGS
Other Litigation and Legal Proceedings
For information concerning a purported class action
against Primerica Holdings and others in connection with
certain changes in the retirement benefits of old Primerica
retirees, see the description that appears in the fourth
paragraph of page 31 of the Company's filing on Form 10-K for
the year ended December 31, 1989, which description is
incorporated by reference herein. A copy of the pertinent
paragraph of such filing is included as an exhibit to this
Form 10-K. The class was certified in May 1991, and on June
25, 1991, the United States District Court for the District of
New Jersey granted summary judgment in favor of Primerica
Holdings and the other defendants in the class action.
Plaintiffs have appealed the decision.
